1. Proposed Legislation: Lifting the Oyster Lease Moratorium Governor's Advisory Commission on Coastal Protection, Restoration and Conservation February 26, 2013 ________________________________________

2. Oyster Lease Moratorium Precludes issuance of new oyster leases Promulgated by Wildlife & Fisheries Commission, effective March 7, 2002 Response to Caernarvon damage awards Subsequent protections for coastal protection: Supreme Court decision in Avenal R.S. 56:423(A), 427.1, and 432.1, and R.S. 49:214.6.10 However, the moratorium is still in effect 2

3. 2008 Acts 798 Requires WFC to promulgate rules to lift the moratorium Requires rules to be developed in conjunction with a moratorium-lifting committee Composed of representatives from DWF, DNR, OTF, LLA, LOGA, and LMOGA To resolve competing interests in the water bottoms Grants right of first refusal to lessees under involuntarily-nonrenewed leases Authorizes lease expansions 3

4. Committee Recommendations Committee delivered recommendations in 2009 Most can be implemented by rule: Biological assessments in conjunction with CUP applications (DNR & DWF) 90-day landowner contest period for new leases (WFC & SLO) 90-day lease application withdrawal period (WFC) Rent-delinquent leases become new leases (WFC) 500’ expansion of existing leases (WFC) Lottery system for new leases, after lifting (WFC) 4

5. Committee Recommendations cont’d Two require legislation: Liability exemption for pre-existing oil and gas activity Reevaluation of State ownership of leased water bottoms prior to lease renewal All recommendations should be enacted before moratorium is lifted All were assigned equal weight by the committee All members approved all recommendations Recommendations as a whole are the result of compromise 5

6. Rationale for Lifting Moratorium Availability of new leases enables: Expansion of oyster industry and oyster supply Accommodation of natural salinity fluctuations Accommodation of salinity changes associated with coastal protection – particularly diversions Avenal, statutory changes, and new lease forms protect the State from Caernarvon-type claims Oil & gas and landowners are less protected, but participated in the moratorium-lifting committee and obtained protective concessions 6

7. Prior Legislative Efforts SB 240, 2011 Reg. Session Included both recommendations requiring legislation A compromise revision was negotiated with oyster, oil & gas, and landowner stakeholders Added a right of first refusal for voluntarily- nonrenewed leases Opposed by attorneys representing oyster claimants in Deepwater Horizon litigation Concern was potential impact on DWH claims Did not reach committee vote 7

8. Prior Legislative Efforts cont’d HB 1057, 2012 Reg. Session Original bill required reestablishment of oyster leases impacted by coastal protection Substitute bill was negotiated with oyster, oil & gas, and landowner stakeholders Substitute bill contained the two committee recommendations requiring legislation And RFR for voluntarily-nonrenewed leases Added 500’ lease expansions, boundary- straightening, one-time lottery for new leases 8

9. Prior Legislative Efforts cont’d HB 1057, 2012 Reg. Session cont’d Same opposition by attorneys representing oyster claimants in Deepwater Horizon litigation Same concern regarding potential impact on DWH claims Substitute bill was not introduced, and the bill did not reach committee vote 9

10. Present Proposed Legislation Identical language to 2011 substitute bill: Protects oil & gas permittees from claims based on activities permitted before oyster lease issued Requires reevaluation of State ownership of leased water bottoms before lease renewal Grants RFR for voluntarily-nonrenewed leases Authorizes boundary-line straightening Authorizes 500’ lease expansions Requires lottery for one round of new leases Reiterates hold harmless for coastal protection 10

11. Present Proposed Legislation cont’d Two new provisions: Voluntary right of entry in lieu of lease acquisition, for coastal protection projects Requested by oyster interests (they can retain the lease) and CPRA (faster and costs less) Full and complete release required Provides for treatment of leases split by acquisitions for coastal protection projects The remainders are treated as a single lease, identically to the original lease 11

12. Questions? 12