Settlement Reached on Taylor Energy Oil Spill - the Largest Oil Spill You Never Heard of

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On March 17, 2022, the U.S Department of Justice announced completion of a settlement agreement with Taylor Energy, the company responsible for an oil spill that began in 2004. The settlement comes after the Department of Justice drafted a Consent Decree—a 60-page document that spells out the terms of the settlement—and provided a 40-day public comment.  

The Taylor Energy oil spill began when a hurricane-induced mudslide caused the collapse of an oil production platform of the coast of Louisiana in the Gulf of Mexico. While a containment system installed in 2018 is capturing most of the oil currently leaking from damaged seafloor wells, oil continues to discharge into the open ocean, making this the longest-running oil spill in U.S. history. 

Under the

resolving federal claims, Taylor Energy will transfer more than $432 million to the U.S. Department of the Interior Bureau of Ocean and Energy Management (BOEM) to plug the remaining seafloor oil wells. 

Taylor Energy will also pay approximately $44.3 million—all of the company’s available remaining assets—to the federal government, allocating  

• $12.8 million to the U.S. Coast Guard to reimburse past costs,  
• $15 million to a Clean Water Act civil penalty, and 
• $16.5 million to Natural Resource Damages (NRD) to help compensate the public for losses to natural resources caused by the spill. 

The $16.5 million allocated to NRD was obtained as a result of a claim crafted in-part by the U.S. Fish and Wildlife Service (USFWS) Southeast Region. The USFWS used information gathered from work on the Deepwater Horizon oil spill to contribute to the claim, providing data on bird distribution in the open waters of the Gulf of Mexico and related potential impacts of the Taylor Energy spill. The $16.5 million to NRD will be used for natural resource restoration projects yet to be determined by Federal and State of Louisiana trustees.