Offshore operator agrees settlement in GoM oil spill case

Oil slick in water viewed from the air at the Taylor MC20 site. [NOAA photo]

The U.S. Department of Justice reports that Taylor Energy Company LLC. a Louisiana oil and gas company, has agreed to liquidate and turn over all its remaining assets to the United States to resolve its liability for an oil spill at its former Gulf of Mexico offshore oil production facility — the source of the longest-running oil spill in U.S. history, ongoing since 2004.

The spill began in 2004, when Taylor Energy’s Mississippi Canyon (MC) 20 oil production platform production platform located in the Gulf of Mexico about 10 miles off the coast of Louisiana collapsed during Hurricane Ivan, resulting in an ongoing oil discharge that continues to this day. Since April 2019, the vast majority of the leaking oil has been successfully captured by a containment system installed and operated by the U.S. Coast Guard through a contractor.

SETTLEMENT TERMS

Under the proposed settlement, Taylor Energy will pay over $43 million — all of the company’s available remaining assets — allocated as follows: $15 million as a civil penalty, $16.5 million for NRD, and over $12 million for Coast Guard removal costs. Taylor Energy also will transfer to DOI’s Bureau of Ocean and Energy Management (BOEM) $432 million currently held in a trust for decommissioning the Mississippi Canyon (MC) 20 site, and the company will be barred from interfering in any way with the Bureau of Safety and Environmental Enforcement’s (BSEE’s) decommissioning work. Likewise, Taylor Energy may not interfere in any way with the Coast Guard’s oil containment and removal actions. Taylor Energy will turn over to DOI and the Coast Guard all documents (including data, studies, reports, etc.) relating to the site to assist in the decommissioning and response efforts. When Taylor Energy liquidates after court approval of the settlement, it will make a final payment to the United States of the value of its remaining assets.

The settlement also requires the company to dismiss three lawsuits it filed against the United States, including two cases in the Eastern District of Louisiana—Taylor Energy Co. LLC v. Captain Kristi M. Luttrell, in her official capacity as Federal On-Scene Coordinator for the MC20 Unified Command and Taylor Energy Co. LLC v. U.S. Department of the Interior — and a case pending in the District Court for the District of Columbia, Taylor Energy Co. LLC v. United States.

IMPORTANT DOWN PAYMENT

“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.”

“For the last three years, the Coast Guard, along with our federal partners, have committed to the challenging mission of containing and removing more than 800,000 gallons of oil discharging into the Gulf of Mexico,” said Captain Will Watson, Sector Commander of the Coast Guard New Orleans. “Containment and removal operations continue to this day. This settlement will provide significant financial resources for the Bureau of Safety and Environmental Enforcement, Bureau of Ocean Energy Management, National Oceanic and Atmospheric Administration (NOAA) and the Coast Guard to permanently secure the wells, protect the marine environment, preserve marine resources and ensure compliance with the Oil Pollution Act of 1990.”

The settlement was filed as a proposed consent decree and is subject to a 40-day public comment period and court review and approval.

Download the proposed consent decree