STEVE INSKEEP, host:

This is the day that President Bush signs the last piece of major legislation to make it through the Republican Congress. It's a wide-ranging bill that deals with taxes, trade and energy. And among the provisions is a big trade-off for the Gulf Coast. It expands oil and gas drilling in the Gulf of Mexico and directs the royalties into restoring the region's wetlands, which were severely damaged by Hurricane Katrina.

NPR's Adam Hockberg reports.

ADAM HOCKBERG: Along the shores of Lake Catherine, Louisiana, about 40 miles from downtown New Orleans, Katrina's scars have been slow to heal. You can see some of them from the lakeside highway - empty foundations where houses used to stand, and overturned cars that still rest where Katrina left them. Other remnants of the storm are more easily viewed from the water.

(Soundbite of water)

Mr. MARK FORD (Ecologist, Coalition to Restore Coastal Louisiana): Start it here.

(Soundbite of boat motor starting)

HOCKBERG: Ecologist Mark Ford, of the Coalition to Restore Coastal Louisiana, is well acquainted with this shallow lake, and he's seen a change alarmingly fast. As he launches his motorboat, he heads about 200 feet offshore to a spot where there used to be a small island.

Mr. FORD: Now this was all land. See this? This area was half the size - this open water - before the storm.

HOCKBERG: So where there were islands we now just have water.

Mr. FORD: Open water.

HOCKBERG: Lake Catherine's disappearing islands are one small symptom of a much larger erosion problem along the Gulf Coast. Some 2,000 square miles of islands and marshes have worn away. Katrina accelerated the loss, but Ford says it's been happening for generations, as both nature and man destroyed wetlands that once harbored wildlife, supported fisheries, and buffered cities from storms.

Mr. FORD: The area south of New Orleans is the highest wetland loss rates in the world. It's almost vanishing before your eyes. So it's a serious problem, and we either gotta make up our minds to fix it, or decide that we're abandoning all of southern Louisiana, and start the withdrawal soon.

HOCKBERG: With the situation so critical, Ford applauds the new legislation. Over the next decade it could provide as much as $50 million a year for wetlands restoration in Louisiana, Mississippi, and Texas. The money could start coming as soon as next year, but for environmentalists, it comes with a catch. It's tied to royalties from expanding oil and gas drilling in the Gulf. Of course, conservationists rarely welcome drilling, but Ford says it's not the threat it used to be.

Mr. FORD: People are worried about tar balls washing up on their beach, and that just doesn't happen that much anymore. The impacts are minimal.

HOCKBERG: And the benefits from this can offset that.

Mr. FORD: Yeah. This will give us a steady stream of funding to restore marsh and land out here.

HOCKBERG: Not everybody in the conservation community agrees. At Tulane University, Environmental Law Professor Oliver Houck says the oil and gas industry caused much of the damage in the first place, by building canals and pipelines through marshes. And, he says, expanding energy production will make things worse.

Professor OLIVER HOUCK (Environmental Law, Tulane University): The fact is, there will be more drilling, there will be more marsh loss. And whether the amount of money will make up for that loss is a good question, because money isn't marsh. Translating that money into something that actually rebuilds south Louisiana is something we have yet to be able to do.

HOCKBERG: Indeed, reversing decades of wetlands loss, is just as difficult as it sounds. Louisiana officials have unveiled a massive plan that includes piping in sediment, diverting water flow, and altering the region's levees. But it faces significant engineering and political challenges, and at best, will take 20 years to complete - bringing little comfort to people whose homes are threatened.

Ms. WANDA JENSEN(ph) (Resident, Lake Catherine, Louisiana): I just want to show you - out through the back bedroom here - this is something that we've got…

HOCKBERG: Wanda Jensen(ph) lives on a narrow strip of land between Lake Catherine and Lake Pontchartrain. Her house, elevated high off the ground, was one of the few in the neighborhood that survived Katrina. But as the land around her erodes away, she's scared about the next storm.

Ms. JENSEN: Lake Pontchartrain is almost in our backyard. From here, you couldn't see it because we had all of the marshland out there. And now, it's practically here.

HOCKBERG: Jensen and her neighbors are lukewarm about the new legislation. They say it's better than nothing, but complain that relying on future oil and gas royalties doesn't protect their homes now.

Leo Richardson heads the Lake Catherine Civic Association.

Mr. LEO RICHARDSON (Lake Catherine Civic Association): The revenues that are projected are going to come from an area that's never been drilled, so everything that we are basing our hopes on are all projections, and not existing things. We have a problem now, and we need the money now.

HOCKBERG: In all, Louisiana officials say it would take more than $14 billion to restore the wetlands in their state alone, far more than they'll have, even when the drilling revenue starts to flow, and Louisiana loses about 25 square miles of land with each passing year.

Adam Hockberg, NPR News.

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