US: $ 475 million settlement proposed for long-term oil spill | Oil and Gas News

A New Orleans-based oil company decided to pay a $ 432 million bailout fund and add $ 43 million to settle the federal lawsuit.

A New Orleans-based oil company has agreed to return a $ 432 million clean-up bond fund and pay an additional $ 43 million to settle a federal lawsuit to clean up abandoned wells since 2004, federal prosecutors said Wednesday.

“This settlement represents a significant payment to address the lasting impact of the oil spill in U.S. history,” Nicole LeBoeuf, director of the National Oceanic and Atmospheric Agency at the U.S. Department of Justice, said in a press release. .

Attorneys at Taylor Oil Co., which approved the removal of the three lawsuits that challenged government clearance orders and measures, did not immediately respond to an email requesting comments. As is usual in such agreements, the proposed agreement stated that Taylor does not accept any liability.

U.S. District Judge Greg Gerard Guidry will decide whether to approve the proposed consent decree after a 40-day public comment period.

Sixteen wells in Louisiana have been leaking since September 2004 when a submarine mudslide caused by Hurricane Ivan knocked down a Taylor production platform, dragging and breaking a set of pipes. Taylor said he covered nine wells, but said he could not cover the rest.

The solution requires Taylor to suspend his other lawsuits. In June, a federal appellate court agreed that a district judge had reason to dismiss a lawsuit against a federal contractor who created a system to capture most of the oil.

The system has been seizing and removing more than 800,000 gallons (3 million gallons) of oil since April 2019, Coast Guard Captain Will Watson, New Orleans Sector Commander, said in a news release.

“Despite being a catalyst for beneficial environmental technological innovation, the damage caused to our ecosystem by this 17-year oil spill is unacceptable,” said Duane A Evans, a U.S. attorney for the East District of Louisiana.

Taylor’s website says it sold all of its active oil and gas in 2008 and now only exists in response to the overturned platform. The company has agreed to return all remaining assets after liquidation, the government said.

The bond fund was created to cover wells, permanently shut down facilities and clean up contaminated soil. One of Taylor’s lawsuits, filed in 2016, sought to recover the remaining money, saying regulators had violated an agreement that required them to put up $ 666 million.

The company also filed a lawsuit alleging that the Coast Guard denied its claim for $ 353 million in cleaning costs.

The trust will be transferred to the Department of the Interior in accordance with the settlement. An additional $ 43 million – all other assets of the company – are for civil penalties, removal costs and damage to natural resources, the news reports.

It includes $ 15 million for a civil penalty, $ 16.5 million for natural resource damage and more than $ 12 million for the costs of removing the Coast Guard.

The Company may not interfere with the decommissioning of the Office of Safety and Environmental Observation or the possession and removal of Coast Guard oil, and shall return all studies, reports and other documents relating to the site.