Taylor Energy Co. In Settlement Talks Over Money For 13-Year Oil Leak

BATON ROUGE (AP) — A company that has failed to stop an oil leak that began nearly 13 years ago in the Gulf of Mexico is negotiating a possible court settlement that could allow it to recover millions of dollars it set aside for work to end the leak.

         A federal judge agreed Wednesday to give Taylor Energy Co. more time for settlement talks with Justice Department attorneys.

         Taylor Energy sued the federal government in January 2016, accusing regulators of violating a 2008 agreement requiring the company to deposit approximately $666 million in a trust to pay for leak response work. The New Orleans-based company argued the government must return the remaining $432 million.

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         The leak began off Louisiana's coast after a Taylor Energy-owned oil platform toppled during Hurricane Ivan in 2004. Waves whipped up by Ivan triggered an underwater mudslide that buried a cluster of oil wells under treacherous mounds of sediment, preventing the company from using conventional techniques to plug its wells.

         Taylor Energy has claimed nothing can be done to completely eliminate chronic sheens at the site. Regulators have warned that the leak could last a century or more if left unchecked.

         Taylor Energy has lobbied for years to recover at least a portion of the money remaining in the trust. But federal authorities rebuffed the company's settlement overtures in 2015 and ordered it to perform more work at the site.

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         Taylor Energy said in its lawsuit that it had spent more than $480 million on its efforts to stop the leak, with $234 million of that money coming from the trust.

         A court filing Monday says attorneys for the company and federal government met April 19 to discuss a "settlement framework" to resolve the suit that Taylor Energy filed in the U.S. Court of Federal Claims.

         "This framework contemplated certain actions to take place over the next few months that should be concluded by late summer," the lawyers wrote in a joint request for the case to be "stayed," or suspended, until Oct. 30.

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         The attorneys didn't specify what those "actions" could be, but said the stay will allow them to "focus their full attention on achieving an amicable resolution undistracted by deadlines in this litigation."

         A 2015 investigation by The Associated Press revealed evidence that the leak is worse than the company, or government, have publicly reported during their secretive response. Presented with AP's findings that year, the Coast Guard provided a new leak estimate that was about 20 times larger than one cited by the company in a 2014 court filing.

         Using satellite images and Coast Guard pollution reports, West Virginia-based watchdog group SkyTruth estimated in 2015 that between 300,000 gallons (1.1 million liters) and 1.4 million gallons (5.3 million liters) of oil had spilled from the site since 2004. The group is still monitoring Taylor's leak: On its website, SkyTruth posted an April 27 satellite image of a slick that it said contained at least 12,000 gallons (4.5 million liters) of oil.

         SkyTruth president John Amos said he hasn't seen any signs that the leak rate is subsiding.

         "If anything, we may actually be concerned it's slowly increasing," he added Wednesday.

         Ian MacDonald, a Florida State University oceanography professor who was an expert witness for environmental groups that sued Taylor Energy, has flown over the leak site roughly 20 times in the past five years. MacDonald maintains Taylor Energy and the Coast Guard are trying to minimize the problem by using the term "sheen" to describe the oil visible on the water's surface.

         "These are oil slicks," MacDonald said. "On a calm day, it's mousse. It produces genuinely thick oil that nobody would mistake for sheen."

         – by AP Reporter Michael Kunzelman


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