Taylor Energy Company LLC, a Louisiana oil and gas company, has agreed to turn over all its remaining assets to the United States upon liquidation to resolve its liability for the 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.
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Under the proposed consent decree, Taylor Energy will transfer to the Department of the Interior (DOI) a $432 million trust fund dedicated to plugging the subsea oil wells, permanently decommissioning the facility, and remediating contaminated soil.
The consent decree further requires Taylor Energy to pay over $43 million for civil penalties, removal costs and natural resource damages (NRD). The State of Louisiana is a co-trustee for natural resources impacted by the spill and the NRD money is a joint recovery by the federal and state trustees.
The United States filed a civil complaint against Taylor Energy in the U.S. District Court in New Orleans on Oct. 23, 2020 United States v. Taylor Energy Company LLC seeking removal costs, civil penalties and NRD under the Oil Pollution and Clean Water Acts arising from the discharge of oil from the company’s former oil 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 and appealing the Coast Guard’s denial of Taylor Energy’s $353 million spill cost reimbursement claim submitted to the U.S. Oil Spill Liability Trust Fund.
The settlement resolves the United States’ environmental enforcement claims against Taylor Energy and requires the company to drop its remaining lawsuits against the United States.
Under the 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 a case pending in the District Court for the District of Columbia, Taylor Energy Co. LLC v. United States.
The spill began in 2004, when a Taylor Energy 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.
The designated federal trustees for the natural resources impacted by Taylor Energy’s oil spill are the U.S. Department of Commerce through the NOAA and DOI through the U.S. Fish and Wildlife Service.
The designated state trustees are the Louisiana Oil Spill Coordinator’s Office, Department of Public Safety and Corrections; Louisiana Department of Natural Resources; Louisiana Department of Environmental Quality; Louisiana Department of Wildlife and Fisheries; and the Louisiana Coastal Protection and Restoration Authority. ■