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Posts Tagged ‘consent decree’

The anticipated State-Federal jurisdictional battle over Sable’s Las Flores Canyon Pipeline is on! See the attached letter from the Pipeline and Hazardous Materials Safety Administration (PHMSA) declaring that the pipeline is under Federal jurisdiction.

The major hurdle for PHMSA/Sable is the court approved Consent Decree that was executed following the 2015 Refugio pipeline spill. The Decree, which designates the California Fire Marshal as the sole regulator for the pipeline, is not mentioned in the PHMSA letter. Needless to say, another major legal battle looms.

Excerpt from the PHMSA letter:

PHMSA’s evaluation of the Las Flores Pipeline confirms that it transports crude oil from the OCS to an onshore processing facility at Las Flores Canyon and continues the transportation of crude oil from Las Flores Canyon to Pentland, California. Consistent with Appendix A, the Las Flores Pipeline is an interstate pipeline. As portions of the Las Flores Pipeline were previously considered to be intrastate and regulated by OSFM, PHMSA is notifying OSFM that the Las Flores Pipeline is subject to the regulatory oversight of PHMSA.

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Sable Offshore is attempting to restart the same pipeline that caused the Refugio Oil Spill in 2015. | Credit: Paul Wellman File Photo

Sable Offshore oil believes the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) , not the California Fire Marshal, should have jurisdiction over the company’s onshore pipeline.

I once had the same opinion as Sable. Their pipeline is, by definition, an interstate line because it carries OCS production. Then I read Appendix D of the court approved Consent Decree that was executed following the 2015 Refugio pipeline spill. That Decree is quite clear regarding regulatory jurisdiction, and would have to be overturned to transfer authority to PHMSA.

The full Consent Decree is attached. Pasted below is an excerpt from Appendix D:

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Taylor Energy’s Mississippi Canyon Block 20 “A” platform was destroyed by a massive mudslide during Hurricane Ivan in 2004 (see illustrations below). Per Naval Research Laboratory sensors, “Ivan the Terrible” generated freak waves as high as 91 feet, and NRL computer models suggest that wave heights may have exceeded 130 feet. The changes in pressure resulting from the motion of the huge waves triggered the flow of the unstable Mississippi delta sediments. The platform was swept 500 feet downslope and the wells were severed and buried under a deep layer of sediment. That was essentially the end for Taylor Energy, as the company would spend the next 17 years locating and plugging wells, decommissioning piping, collecting seepage, and mitigating pollution. Since 2008, when Taylor sold its remaining oil and gas assets, the company has been solely engaged in the MC-20 response.

Illustration of the collapsed well jacket and damaged pipes from Taylor Energy’s Mississippi Canyon 20 Platform in the Gulf of Mexico.
NOAA illustration

Last week, Taylor and the Justice Department signed a consent degree that transfers the company’s remaining assets and control of the decommissioning trust fund to the Federal government. Questions remain as to whether the platform and wells could have been better designed to withstand the mudslide (note that the platform was installed and operated by BP prior to being sold to Taylor), and whether more should have been done to mitigate the seepage. Taylor does a good job of making its case at their response website.

Few offshore operators would argue that what happened to Taylor couldn’t happen to them. That would be brash and foolish. Hopefully, the companies that remain have absorbed the lessons of MC-20 and are applying them to their operations and management programs.

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