17 years of a leak and finally some restitution. This leak goes back to pre-Katrina, to Hurricane Ivan.
Taylor Energy Co. has agreed to pay $475 million to settle litigation with the federal government over the 17-year leak of crude oil – the longest in U.S. history – from its hurricane-destroyed production platform 20 miles off the mouth of the Mississippi River. According to a proposed consent decree filed Wednesday in U.S. District Court in New Orleans, the company will transfer to the Interior Department a $432.5 million trust fund that it set up to pay for capping and plugging the 28 wells, decommissioning what’s left of the platform and cleaning up any soils contaminated by the leak. The company has also agreed to pay more than $43 million in civil penalties, federal costs for removing the platform and wells and expenses for restoring or replacing natural resources such as wildlife, fisheries or wetlands contaminated by oil. Louisiana is a co-trustee with the federal government in overseeing the money to restore natural resources. The proposed settlement signals the end of Taylor Energy, a company founded in 1979 by Patrick Taylor, the independent oil executive known for his efforts to create the now state-funded Taylor Opportunity Program for Students, or TOPS. The program provides college scholarships to thousands of Louisiana students.nola.com
This is an unusual case but it shows how hard it is to get to a company for a n offshore leak.
The drawn-out compliance process illustrates not only the difficulty of stopping underwater oil leaks but also the determination of an independent oil company with deep pockets and the shifting priorities of a federal government that changed parties three times in 17 years. Taylor died in 2004, only a few weeks after Hurricane Ivan destroyed the platform in the Gulf of Mexico. In the ensuing years, his company sold its other oil and gas assets, retaining only the failed wells and the cleanup response trust fund. The company is controlled by Taylor’s widow, renowned New Orleans philanthropist Phyllis Taylor. Phyllis Taylor company representatives did not respond Wednesday to a request for comment on the settlement.
The settlement does all for public comment.
The settlement, which is subject to public comment for 40 days, requires Taylor Energy to drop its lawsuits against the federal government, including a challenge to the Coast Guard’s decision to install a spill containment system over the well site. The containment system collects oil that continues to leak from some unplugged wells. It also requires the company to drop its challenge to the Coast Guard’s denial of Taylor’s request for $353 million, which would have been reimbursement for the company’s spending on fighting the leak and plugging the wells. Further, the settlement resolves all federal claims on the company. And when Taylor Energy sells its remaining assets after the settlement, the proceeds will go to the federal government, according to the Justice Department. The company will be allowed to hold onto enough money to pay for operations until the liquidation is complete.
There will still be money in the company so for them this is just what should have been done earlier.
According to the consent decree, the remaining company assets after paying the fines could equal $16 million. “Offshore operators cannot allow oil to spill into our nation’s waters,” said Assistant Attorney General Todd Kim, of the Justice Department’s Environment and Natural Resources Division, which has been overseeing federal litigation against Taylor. “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.” “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 Capt. Will Watson, commander of the Coast Guard’s New Orleans Sector. “Containment and removal operations continue to this day.”
While the cause was Ivan, it was a mud slide that damaged the oil towers causing the leak.
The company’s platform, known as MC-20 Saratoga, was destroyed when Hurricane Ivan triggered an underwater mudslide that severed the legs of the 550-foot-tall structure and buried many of the wells it served. Over the years, Taylor plugged some wells and installed three containment domes. In 2008, Taylor set aside $666.3 million in the trust fund, which, with Interior Department approval, reimbursed the company for some of its expenses in plugging nine of the wells. But miles-long oil slicks and sheens were sighted almost daily on the surface of the water around the platform site. The Coast Guard took control of the site in 2019, after a government study estimated it was still spewing as much as 29,000 gallons of oil every day. The Coast Guard hired Belle Chasse marine contractor Couvillion Group to oversee cleanup, and the company has been trying to eliminate the oil flow since then. Couvillion designed and installed a containment system for the remains of the platform. It captures the oil, which is then taken to shore to be processed and sold at a discounted rate.
Taylor litigated this leak to all involved.
Taylor sued Couvillion, too, alleging the contractor was unqualified for the job and was given too much leeway by the Coast Guard to charge more than $40 million for the work. In July, a federal judge in New Orleans dismissed that suit. “Now that Taylor has stopped their ‘intimidation by litigation’ and the government is in control, this calamity will soon come to an end!!,” Timmy Couvillion, chief executive of Couvillion Group, said Wednesday. According to the consent decree, if money remains from the trust or fines after the cleanup and natural resource improvements are completed, it will be turned over to the federal Oil Spill Liability Trust Fund. And Taylor and its affiliated entities will not be liable for any costs beyond the money listed in the settlement.
Litigation, why admit guilt when the lawyers can make a more money and cost the litigants more.