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Taylor Energy Disputes Source of Recovered Oil at MC20 Well

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Diver works to install the containment system at the MC20 site, 2018 (USCG)

By The Maritime Executive 06-17-2020 09:56:00

The former oil company Taylor Energy is suing the U.S. Coast Guard to block a bill for $43 million in removal costs related to an oil discharge at a former Taylor production site off the coast of Louisiana.

The leak at the site has been active since 2004, when Taylor Energy's MC20 platform was destroyed by Hurricane Ivan: storm surge from the hurricane set off an underwater mudslide that destroyed the platform and buried its subsea infrasructure under 100 feet of sediment. In 2007, the Bureau of Safety and Environmental Enforcement (BSEE) directed Taylor Energy to remove the platform deck and  sub-sea debris, decommission the oil pipeline, attempt to contain the leaking oil and plug the wells that were deemed highest risk. Taylor completed the ordered scope of work in 2010. 

In 2015, an investigation by SkyTruth and the Associated Press determined that the ongoing rate of leakage at the site was higher than previously estimated. The Coast Guard  revisited its own analysis of the scope of the pollution from MC20, and it revised its own estimate upwards by a significant margin. In October 2018, the federal on scene coordinator (FOSC) issued an order requiring Taylor Energy to install a containment system to address the ongoing leakage. One month later, the FOSC took over partial authority for containing the spill and contracted its own salvage team. The contractor installed a subsurface oil containment system at the site in April 2019 and began recovering more than 1,000 gallons of oil per day. 

To date, the cost of the project has come to about $43 million and is expected to rise as containment operations continue. In a letter sent June 2, the Justice Department and the Coast Guard indicated an intent to sue Taylor Energy to recover this expense and to impose civil penalties. 

In its new suit, Taylor asserts that the Coast Guard has overstepped its authority "in direct violation of the United States Constitution," and the firm is petitioning the court to release it from any obligation to pay the cost. Taylor maintains that the oil removal project was unnecessary and that "any oil that has been collected at the MC20 Site by the Coast Guard [or its contractor] is not oil sourced to the Taylor Energy wells at MC20." It also contends that the Coast Guard's contractor caused damage at the well site, resulting in "significant increases in sheens on the Gulf’s surface."

Taylor Energy is headed by Phyllis M. Taylor, a prominent philanthropist who chairs the Patrick F. Taylor Foundation. The firm ceased oil and gas drilling operations in 2008, and according to its website, "it exists today solely to respond to the MC-20 incident."