Dec 23, 2021 - Energy & Environment

Louisiana firm to pay $475M over longest-running U.S. oil leak

A Louisiana-based oil company will pay $43 million in civil penalties and damages and $432 million to a clean-up trust fund over a spill in the Gulf of Mexico, the Justice Department announced Wednesday.

Why it matters: Taylor Energy's former Gulf of Mexico offshore oil production facility is the source of the longest-running oil spill in U.S. history, ongoing since 2004, per a Department of Justice statement.

  • Nicole LeBoeuf, director of NOAA's National Ocean Service, said in a statement the proposed settlement "represents an important down payment to address impacts" of the spill — which began when a Taylor Energy production platform some 10 miles off Louisiana's coast collapsed during Hurricane Ivan.
  • The resulting oil discharge "continues to this day," the DOJ noted.

Details: Under the settlement agreement that's subject to final court approval, Taylor must dismiss three existing lawsuits it filed against the federal government. But it does not admit any liability.

The big picture: Ivan triggered a mudslide, causing the Taylor production platform to collapse, with 16 of the 25 damaged undersea wells leaking since then, per the New York Times.

  • Taylor managed to cap the others but said it couldn't do so with the rest because they were "buried under so much mud and debris," per the NYT.
  • U.S. Coast Guard Capt. Will Watson, sector commander in New Orleans, noted in a statement that for the past three years teams had removed more than 800,000 gallons of oil that had been discharging into the Gulf of Mexico.

What they're saying: "Despite being a catalyst for beneficial environmental technological innovation, the damage to our ecosystem caused by this 17-year-old oil spill is unacceptable," said Duane Evans, U.S. attorney for the Eastern District of Louisiana.

For the record: Taylor "sold its oil and gas assets in 2008 and ceased all drilling and production operations," according to a website statement. It now exists today solely to respond to the spill.

The other side: Taylor couldn't immediately be reached for comment.

  • The company said in a statement to CBS' "60 Minutes" when the show covered the spill last month that Taylor "has retained and relied upon the world's foremost experts to study and then recommend a plan of action ... We continue to advocate for a response driven by science."

What's next: The U.S. District Court will decide whether to approve the settlement's proposed consent decree at a date to be scheduled.

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