Louisiana Company Agrees to Pay $43 Million, Hand Over $432 Million Trust Fund for Longest-Running Oil Spill

By Katabella Roberts
Katabella Roberts
Katabella Roberts
Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.
December 23, 2021 Updated: December 23, 2021

A Louisiana oil and gas company has agreed to turn over a $432 million trust fund to the United States and pay $43 million to resolve its liability for an oil spill at its former Gulf of Mexico offshore oil production facility, the Department of Justice (DOJ) said Wednesday.

Taylor Energy’s former production facility is the source of the longest-running oil spill in U.S. history, and has been ongoing since 2004, the DOJ said.

Under a proposed settlement agreement that is subject to final court approval, Taylor Energy will transfer a $432 million trust fund to the Department of the Interior’s Bureau of Ocean and Energy Management (BOEM).

The trust fund is dedicated to “plugging the subsea oil wells, permanently decommissioning the facility, and remediating contaminated soil,” the department said.

The company will also pay a further $43 million—all of its available remaining assets—for civil penalties, removal costs, and natural resource damages (NRD). Of the $43 million, $15 million will be paid as a civil penalty, $16.5 million for NRD, and over $12 million for Coast Guard removal costs.

It will also be banned from “interfering in any way with the Bureau of Safety and Environmental Enforcement’s (BSEE’s) decommissioning work” and from interfering with the Coast Guard’s oil containment and removal actions, and must hand over all of its documents relating to the site to the DOI and the Coast Guard to assist in the decommissioning and response efforts.

The oil spill at the former Gulf of Mexico offshore oil production facility began in 2004, when a platform collapsed, triggered by Hurricane Ivan. This resulted in 16 of the 25 damaged undersea wells leaking to this day, per the New York Times.

Since April 2019, the vast majority of the leaking oil has been successfully contained by a containment system installed and operated by the U.S. Coast Guard through a contractor.

Meanwhile, Taylor Energy Company sold its oil and gas assets in 2008 and ceased all drilling and production operations. The company now exists solely to respond to the oil spill incident.

The settlement comes after the United States filed a civil complaint against the oil and gas company in the U.S. District Court in New Orleans on Oct. 23, 2020, seeking removal costs, civil penalties, and NRD under the Oil Pollution and Clean Water Acts.

Taylor Energy filed several lawsuits against the U.S. between 2016 and 2020, including challenges to the Coast Guard’s decision to install a spill containment system. The company also appealed the Coast Guard’s denial of its $353 million spill-cost reimbursement claim which it submitted to the U.S. Oil Spill Liability Trust Fund.

As per the new settlement, Taylor Energy must now drop its remaining lawsuits against the United States.

The Epoch Times could not immediately reach Taylor Energy for comment.

“Offshore operators cannot allow oil to spill into our nation’s waters,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division. “If an oil spill occurs, the responsible party must cooperate with the government to timely address the problem and pay for the cleanup. Holding offshore operators to account is vital to protecting our environment and ensuring a level industry playing field.”

U.S. Attorney Duane A. Evans for the Eastern District of Louisiana added that “the damage to our ecosystem caused by this 17-year-old oil spill is unacceptable.”

“This settlement represents an important down payment to address impacts from the longest-running oil spill in U.S. history,” said Nicole LeBoeuf, Director of NOAA’s National Ocean Service. “Millions of Americans along the Gulf Coast depend on healthy coastal ecosystems. NOAA and our co-trustees look forward to working in partnership with the National Pollution Funds Center to ensure the region and the ecosystem can recover from this ongoing tragedy.”

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.