Friday, October 17, 2014

Cost for Concealing Discharge of Pollution from Oil and Gas Platform as US Agencies Toughen Up

One Penalty Settled but There May be More to Come
Shipping News Feature

US – We have written before about cargo vessels which transgressed pollution regulations by discharging oil into the ocean whilst concealing the fact, and foretold more and tougher penalties for such offences and this week, in a first joint judicial enforcement action involving both the US Environmental Protection Agency (EPA) and the Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE), a claim alleging violations to the Clean Water Act and the Outer Continental Shelf Lands Act (OCSLA), saw the operators of an oil and gas production platform, ATP Infrastructure Partners, LP (ATP-IP), receive a $1 million civil penalty.

Working together with the Department of Justice the EPA and BSEE filed a complaint in February 2013 alleging oil and an unauthorised chemical dispersant were discharged into the Gulf of Mexico from ATP-IP’s oil and gas production platform known as the ATP Innovator. A BSEE inspection of the ATP Innovator in 2012 revealed alleged unlawful discharges of oil and a piping configuration that routed an unpermitted chemical dispersant into the facility’s wastewater discharge pipe to mask excess oil being discharged into the ocean.

At the time of the discovery, ATP Oil & Gas Corporation (ATP), which filed for Chapter 11 bankruptcy protection in 2012, was the operator of the facility, and ATP-IP was, and remains, the owner. The ATP Innovator was operating in the Mississippi Canyon, approximately 45 nautical miles offshore of south eastern Louisiana. Now, under a settlement agreement with the United States, ATP-IP will pay the $1 million civil penalty and perform corrective measures to resolve any future problems.

The United States filed suit against ATP and ATP-IP seeking Clean Water Act penalties and corrective measures under the Clean Water Act and OCSLA. ATP-IP’s motion to dismiss the claims against it and a related motion for appeal were both denied by the court in 2013. In addition to the penalty and corrective measures, ATP-IP will conduct enhanced reporting to address safety and environmental concerns. The Clean Water Act and OCSLA claims against ATP are not part of this settlement with ATP-IP and remain pending before the district court for future resolution.

Under the Clean Water Act it is illegal to discharge oil or hazardous substances into or upon waters of the contiguous zone or in connection with activities under OCSLA in quantities that may be harmful to the environment or public health or welfare. The penalty paid for these violations will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Fund Center.

The Oil Spill Liability Trust Fund is used to pay for federal response activities and to compensate for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances. Although ATP-IP took the Innovator out of operation earlier this year, it must perform corrective measures to ensure safe and lawful future operations. In particular, ATP-IP must remove and seal the connection on the wastewater discharge outfall pipe that was used to inject chemical dispersants, thereby permanently eliminating the access point for improperly injecting dispersants into the wastewater discharge pipe.

The authorities also issued the company with a list of conditions it must meet before the ATP Innovator can be used for exploration, development or production activities in US waters and, as a further safeguard, ATP-IP will be required to have the ATP Innovator’s wastewater treatment operations and surface production-safety systems independently audited for Clean Water Act and OCSLA compliance if the facility is used or leased in the future by ATP-IP or a related entity.

Photo: Any mention of oil spilt in the Gulf of Mexico touches a nerve with those locally who recall the BP Deepwater Horizon tragedy of 2010.