Taylor Energy Co. to pay more than US$432 million after oil spill
MEXICO – Taylor Energy Company LLC (Taylor Energy) has agreed to turn over all of its remaining assets to the United States upon liquidation to resolve its liability for the oil spill at its former offshore input production facility in the Gulf of Mexico, the Department of Justice (DOJ) has disclosed.
Under the proposed consent decree, Taylor Energy will transfer to the Department of the Interior (DOI) a $432 million trust fund intended to plug the offshore oil wells, permanently decommission the facility and remediate the contaminated soil.
The consent decree also requires Taylor Energy to pay more than $43 million in civil penalties, removal costs and natural resource damages (NRD).
Moreover, it reported that the State of Louisiana is a co-trustee of the natural resources affected by the spill and the NRD money is a joint recovery from the federal and state trustees.
The United States filed a civil lawsuit against the company in District Court in New Orleans on October 23, 2020, seeking removal costs, civil penalties and NRD under the Oil and Clean Water Pollution Acts arising from the discharge of such fuel from the company’s former production facility.
Between 2016 and 2020, Taylor Energy filed several lawsuits against the United States, including challenging the Coast Guard’s decision to install a spill containment system, in addition to claiming reimbursement for spill costs of $353 million.
Under the agreement, the company will pay more than $43 million – all of the company’s remaining available assets – broken down as follows: $15 million in civil penalty, $16.5 million in NRD and more than $12 million for Coast Guard removal costs.
In addition, the company will transfer to DOI’s Bureau of Ocean and Energy Management (BOEM) $432 million currently held in trust for the decommissioning of the Mississippi Canyon (MC)-20 site, and the company will be prohibited from interfering in any way with decommissioning work by the Bureau of Safety and Environmental Enforcement (BSEE).
It also may not interfere in any way with Coast Guard oil containment and removal actions. Taylor Energy will turn over to DOI and the Coast Guard all documents (including data, studies, reports, etc.) related to the site to assist in decommissioning and response efforts. When the company is liquidated following court approval of the settlement, it will make a final payment to the United States for the value of its remaining assets.
The settlement also obligates the company to dismiss three lawsuits it filed against the United States, including two cases in the Eastern District of Louisiana, and a case pending in the District Court for the District of Columbia.
The spill began in 2004, when a Taylor Energy production platform located in the Gulf of Mexico about 10 miles off the Louisiana coast collapsed during Hurricane Ivan, a spill that continues to this day.
The DOJ reported that since April 2019, the vast majority of oil leaks have been successfully captured by a containment system installed and operated by the U.S. Coast Guard through a contractor.
Source: MEXICO-NOW Staff