Tag: Hurricane Katrina

Hurricane Isaac and Louisiana

Hurricane Isaac is heading for Louisiana, and everyone is hoping that individuals and government agencies are ready for the onslaught. Seven years ago, Hurricane Katrina caused huge damage, but to a large extent ”it wasn’t a natural disaster. It was a man-made disaster, created by lousy engineering, misplaced priorities, and pork-barrel politics,” noted journalist Michael Grunwald. Grunwald pointed his finger particularly at failures of the Army Corps of Engineers, as have others.

I’ve described the long troubled history of the Army Corps in this essay, including its Katrina failures. Hopefully, the Corps’ facilities will do a better job this time around, but ultimately I think citizens would be better served if the Corps’ activities were privatized or off-loaded to the states.

Here are five ways that the Army Corps magnified the damage done to people and property from Hurricane Katrina:

First, there were fundamental design flaws in Army Corps’ infrastructure around New Orleans. The levees failed in numerous places because of engineering and construction defects, such as the use of unstable soils in levee structures. Most of the flooding was due to water breaching the levees at weak points.

Second, the Corps’ extensive levee and floodwall structures throughout the New Orleans area encouraged development in dangerous, low-lying areas. After Hurricane Betsy in 1965, the Corps was charged with improving the city’s flood protection, but “rather than focusing its full efforts on protecting the existing city, the Corps decided to spend millions of dollars to extend levees into the virgin wetlands of New Orleans East specifically for the purpose of spurring development.” That turned out to be a very bad idea: “Some of the areas in New Orleans where Katrina wreaked the greatest damage were intensively developed only recently as a result of the U.S. Army Corps of Engineers’ flood-control projects.”

Third, the Corps’ focus on building economic development infrastructure, such as ship channels, reduced available funds for hurricane protection. Louisiana had received $1.9 billion for Corps’ projects in the five years before Katrina, but only a small share was spent on protecting central New Orleans from possible hurricanes. Grunwald notes: “Before Katrina, the Corps was spending more in Louisiana than in any other state, but much of it was going to wasteful and destructive pork.”

Fourth, Corps’ infrastructure helped to deplete wetlands around New Orleans, which had provided a natural defense against hurricanes. The Corps’ navigation and flood control structures have caused silt from the Mississippi to disperse into the Gulf over the decades, rather than being naturally used to rebuild the wetlands. As writer John McPhee noted, “sediments are being kept within the mainline levees and shot into the Gulf … like peas through a peashooter, and lost to the abyssal plain.” As a result, the wetlands have shrunk decade after decade.

Fifth, the Corps’ Mississippi River Gulf Outlet (MRGO) shipping channel acted to funnel Hurricane Katrina into the heart of New Orleans. The 76-mile MRGO was built in 1965 at great expense based on optimistic projections of ship traffic, but the traffic never materialized. Constructing MRGO destroyed thousands of acres of protective wetlands, and it acted to channel salt water inland, which killed fresh water marshes and cypress forests. During Katrina, the channel is thought to have intensified the storm surge as it headed toward the city.

For more, see www.downsizinggovernment.org/usace

Put Federal Flood Insurance Out of Its Misery

The House of Representatives is scheduled this week, as early as today, to consider an extension and “reform” of the National Flood Insurance Program (NFIP), administered by FEMA. Since Hurricane Katrina in 2005, the NFIP has been about $18 billion in the hole. And this is from a program that only collects around $2 billion a year in premiums, which barely covers losses and expenses in a normal year. So make no mistake, the NFIP is still on course to cost the taxpayer billions more in the future.

Even before Katrina, the Congressional Budget Office estimated that the NFIP was receiving a subsidy of close to a billion dollars a year. Under CBO’s optimistic projections, the House’s reform bill would increase NFIP revenues by about $4 billion over the next ten years, making only a small dent in the program’s current deficit.

The projected cost savings could potentially be lost by the expansion of the NFIP in the House bill. Yes, you read that correctly. Despite being deep in debt, the House is proposing to expand the coverage, and hence the risk, underwritten by the NFIP. For instance, the reform bill adds coverage for living expenses and “business interruption expenses,” as well as increasing the coverage limit from $350,000 (250k for structure and 100k for contents) to about $520,000 per home.

Such a massive expansion of coverage would likely drive out the existing providers of excess flood insurance coverage. And yes, you also read that correctly: there are a handful of insurers that offer private flood insurance. There is absolutely no reason that the private market could not offer flood insurance. Yes, rates might go up for the highest risk properties, but they would likely go down for others (and clearly reduce costs to the taxpayer). And given the high administrative costs of the NFIP (about 30 percent of premiums go directly to private insurance companies to help run it), it is likely that a completely private system of flood insurance would be cheaper.

In the aftermath of the housing bubble and its extreme costs to the taxpayer, we should eliminate the vast array of subsidies for housing construction, including the NFIP. If there’s one thing we should have learned, the underpricing of risk can have disastrous results.

Next Move: Suing the Sun for Unseasonably Cool Weather

The New Orleans-based Fifth Circuit, the federal court of appeals where I once clerked, has allowed a class action lawsuit by Hurricane Katrina victims to proceed against a motley crew of energy, oil, and chemical companies.  Their claim: that the defendants’ greenhouse gas emissions raised air and water temperatures on the Gulf Coast, contributing to Katrina’s strength and causing property damage.  Mass tort litigation specialist Russell Jackson calls the plaintiffs’ claims “the litigator’s equivalent to the game ‘Six Degrees of Kevin Bacon.’”

In Comer v. Murphy Oil USA, the plaintiffs assert a variety of theories under Mississippi common law, but the main issue at this stage was whether the plaintiffs had standing, or whether they could demonstrate that their injuries were “fairly traceable” to the defendant’s actions.  The court dismissed several claims but held that plaintiffs indeed could allege public and private nuisance, trespass and negligence.  The court also held that these latter claims do not present a so-called “political question” that the court doesn’t have the authority to resolve.  You can read about the Court’s ruling in more detail at the WSJ Law Blog and Jackson’s Consumer Class Actions and Mass Torts Blog.

This is actually the second federal appeals court to rule this way; last month, the Second Circuit (based in New York) held that states, municipalities and certain private organizations had standing to bring federal common law nuisance claims to impose caps on certain companies’ greenhouse gas emissions.  Here’s the opinion in that case, Connecticut v. American Electric Power Company, and you can read a pretty good summary and analysis here.

Both of these cases, which herald a flood of global warming-related litigation, so to speak, owe their continuing vitality to the Supreme Court’s misbegotten 2007 decision in Massachusetts v. EPA.  The 2006-2007 Cato Supreme Court Review covered that case in an insightful article by Andrew Morriss of the University of Illinois.  (To get your copy of the latest (2008-2009) Review, go here.)

I should note from my own experience at the Fifth Circuit that the panel here consisted of the two worst judges on the court – Clinton appointees Carl Stewart and James Dennis – and one of Reagan’s weakest federal appellate appointments, Eugene Davis.  Even Davis, however, wrote separately to note that while he agreed on the standing issue, he would have affirmed the district court’s dismissal of the suit on a different ground (that pesky proximate cause issue).

I predict that the full (16-judge) Fifth Circuit will review this case en banc –and if not that the Supreme Court will eventually take it up (if the district court on remand doesn’t again dispose of the case on causation grounds).