The New York Times: There’s Money in Oil, Oystermen Find

(Lee Celano for The New York Times: Oystermen like John Tesvich share offshore Louisiana with energy interests. At right, gas tanks.)

Oystermen often collect lucrative payments in damages from oil companies, a study says, even when their acreage has no oysters to damage.
 
By ADAM NOSSITER
Published: August 15, 2007

HOPEDALE, La. — The brave little oyster boats chug out daily from the dock here, but their richest harvest may actually be sitting in the office towers of downtown New Orleans, 60 miles west of this remote spot where marsh, sky and water converge.

In an arrangement that is a Louisiana seafood specialty, though one that can’t be fried or covered in sauce, an oysterman here in the nation’s top oyster-producing state can make as much, if not more, collecting damage settlements from oil companies as from harvesting the bivalves themselves, according to a recent study by two Louisiana State University economists.

Such payments often flow to an oysterman even in cases where there are no oysters to be damaged, said the report, which has infuriated the oyster community here, eliciting complaints that the conclusions are simply lies.

The authors say that while the number of oysters per acre has been in decline over the last four decades — a trend that they attribute to a vast increase in the acreage harvested — revenue from the oil companies that grudgingly share the rich bottomlands with the oystermen is increasing, thanks to a peculiar accommodation that coastal Louisiana has whispered about for years but nobody had quantified until now.

This uneasy pay-and-let-live has its origins in an extraordinary cultural-geologic juxtaposition.

On one hand there is a hallowed Louisiana institution, the oyster lease, established early in the 20th century in homage to the fat shellfish off the state’s shores and granted in virtual perpetuity to anybody who was willing to pay $2 per acre a year for coastal bottomland. While legal disputes have led the state to place a moratorium on granting new oyster leases, existing ones are often passed down from father to son, thousands of acres staying in a family through generations, whether they produce oysters or not. In all, some 400,000 acres are now under lease.

On the other hand there is the black gold beneath the oyster beds — explored for and then piped and shipped from the murky edges of Louisiana for nearly a century now. The leases give the oystermen virtual ownership of these valuable water bottoms. So when an oil company moves a rig across the waters, or puts down a pipe, or simply lays out plans to do so, an oysterman can claim that his harvest is being damaged. Negotiations frequently result in payment, with or without the threat of a suit.

Don Briggs, president of the Louisiana Oil and Gas Association, an industry group representing offshore drillers, said, “A little oyster guy comes up and wants $50,000, we’ll pay it to him, just to get him out of the way.”

“Nobody ever admits to extortion,” Mr. Briggs added.

And it does not seem to matter whether there are oysters under the surface. A floor with no oysters can be an absolute bonanza worth millions a year, say the L.S.U. scholars, Walter R. Keithly Jr. and Richard F. Kazmierczak.

“On average,” they wrote, “oyster leases generate a majority of their net income from non-oyster-producing activities.” Money “appears to flow to leases irrespective of their ability to produce marketable oysters.”

So lucrative is the potential payoff from the oil companies that there is almost certainly a lively trade among oystermen in the “speculative” leasing of otherwise unproductive water bottoms, Dr. Keithly and Dr. Kazmierczak concluded.

Indeed, speaking on condition of anonymity, one of the major “landmen” — middlemen who negotiate between oystermen and oil companies — agreed that some fishermen deliberately leased bottoms in harm’s way, in order to collect from the companies.

These are conclusions the oystermen are far from accepting.

“An outright lie,” said one, Mike Voisin, chairman of the Louisiana Oyster Task Force, created by the state to represent the industry’s interests. “Outright fallacy. Absolutely not the truth. We’re very upset.”

Dennis Pixton, a genial oysterman on the dock here at Bayou La Loutre, called the findings “a blatant lie.” Both he and Mr. Voisin said their income from oysters dwarfed what they received from oil companies.

But Robert Conklin, an oyster boat captain, shirtless and bronzed from days at sea, commented knowingly about a colleague grown suddenly rich with the help of few oysters. “He makes 20, 30 sacks a day, and he’s a millionaire,” said Mr. Conklin, adding that he himself could fill 250 of the sacks on a good day.

In all, Dr. Keithly and Dr. Kazmierczak wrote, oystermen gross $10.1 million to $14.79 million a year from oil and gas “activities.” The total annual value of the state’s oyster production is about $12 million.

Not everybody in the Louisiana oyster business harvests revenue from the companies. But even those who do not pursue it nurse a little-guy feeling of grievance, suggesting that only their pugnacity stands between them and ruin at the hands of the powerful energy interests they live with. Less than a mile from the oyster dock here, the towers of a sprawling natural gas processing plant loom over the two-lane blacktop. In the coastal channels, oil barges and oyster boats are constantly passing each other.

“For decades,” said John Tesvich, an oysterman like generations of his family before him, “the oil industry has moved equipment indiscriminately, and the state’s turned a blind eye. The only impediment they had was the oysterman. It’s damage to his crop; it’s damage to his lease.”

“Whether it’s oystermen stealing oysters or oil service barges running on your lease,” Mr. Tesvich added, “you’ve got to protect yourself.”

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