Taylor Energy Company LLC (Taylor Energy) is a Louisiana-based oil and gas company that has agreed to liquidate to release its assets to the United States to settle its liability for the Gulf of Mexico oil spillage. This oil spillage was the worst in American history and has been ongoing since 2004.
Under the consent decree, Taylor Energy will transfer the $432 millions trust fund to the Department of the Interior. This trust fund is dedicated to plugging the subsea wells and permanently decommissioning the facility. It also helps to remediate 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 co-trustee of Taylor Energy for natural resources affected by the spillage. The NRD money is a joint recovery of the federal trustees 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, 2020, Taylor Energy brought several lawsuits against the United States. They challenged the Coast Guard’s decision to install a spill control system and appealed the Coast Guard’s refusal to reimburse Taylor Energy’s $353million spill-cost reimbursement claim submitted by the U.S. Oil Spill Liability Trust Fund. The settlement settles all United States environmental enforcement claims against Taylor Energy. It also requires Taylor Energy to cease any remaining lawsuits against the United States.
Offshore operators must not allow oil to leak into our waters,” stated Assistant Attorney General Todd Kim from the Justice Department’s Environment and Natural Resources Division. “If there is an oil spillage, the responsible party must work with the government to promptly address the issue and pay for cleanup. Holding offshore operators to account is vital to protecting our environment and ensuring a level industry playing field.”
“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 U.S. Attorney Duane A. Evans for the Eastern District of Louisiana. “The federal government will hold accountable businesses that violate our Nation’s environmental laws and ensure that any oil and gas company operating within our District meets their professional and legal responsibilities.”
“We are proud of and grateful to the outstanding interagency team of technical and legal experts from the Departments of the Interior and Justice, the U.S. Coast Guard and other agencies who have worked tirelessly for more than a decade to mitigate environmental impacts to the Gulf of Mexico ecosystem, hold the company accountable, and protect the American taxpayer,” said Deputy Secretary of the Interior Tommy Beaudreau.
“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 operations and removal 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.”
“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. Healthy coastal ecosystems are vital for millions of Americans living along the Gulf Coast. 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.”
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. Taylor Energy will not be allowed to interfere with the Coast Guard’s oil removal and containment actions. Taylor Energy will give all documents, including data, studies, and reports, to the Coast Guard. To assist with the decommissioning of the site and the response efforts, Taylor Energy will turn over all documents (including data, studies, reports, etc.) to DOI and the Coast Guard. After the settlement is approved by the court, Taylor Energy will pay the United States a final amount for the 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. The vast majority of the oil that was leaking has been captured and managed by the U.S. Coast Guard via a contractor since April 2019,. The Justice Department filed today’s settlement on behalf of Coast Guard, DOI, and federal and state trustees natural resources. The U.S. Department of Commerce via the NOAA, and the U.S. Department of Commerce via the DOI are the federal trustees of natural resources affected by Taylor Energy’s crude oil spillage. Fish and Wildlife Service. The Louisiana Oil Spill Coordinator’s office, Department of Public Safety & 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 are the designated state trustees.
The settlement was filed as a proposed consent decree and is subject to a 40-day public comment period and court review and approval. A copy of the consent decree is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.
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