Company sues to block order to contain 14-year-old oil leak

The company that has failed to end a 14-year-old oil leak in the Gulf of Mexico is suing to challenge a Coast Guard official's order to design and install a new containment system to capture and remove the crude before it forms slicks that often stretch for miles.

The federal lawsuit that Taylor Energy Co. filed Thursday in New Orleans asks the court to throw out Coast Guard Capt. Kristi Luttrell's Oct. 23 administrative order. The company faces daily civil penalties of up to $40,000 if it fails to comply with the order.

Luttrell issued it one day after the Washington Post published a front-page story about the leak off Louisiana's coast. The story included a new estimate that approximately 10,500 to 29,400 gallons (39,747 to 111,291 liters) of oil is leaking daily from the site where a Taylor Energy-owned platform toppled during Hurricane Ivan in 2004.

That estimate, contained in a report that the federal government commissioned from a Florida State University researcher, is much higher than previous government estimates and dwarfs the company's own assessment of the leak's volume.

"The Coast Guard's actions were an abrupt departure from the well-verified scientific conclusions in the record and were taken in response to adverse publicity, rather than in response to any imminent and substantial threat to the public health or welfare," the suit says.

A Coast Guard public affairs official, Chief Petty Officer Lauren Jorgensen, released a statement saying, "The Coast Guard is aware of the complaint Taylor Energy Corporation filed today and will respond accordingly. Our immediate focus remains on swift containment of the ongoing oil discharge, and we are continuing on with our plans."

The New Orleans-based company's suit claims Luttrell has "repeatedly engaged in actions that are arbitrary, capricious, an abuse of discretion and contrary to law."

"Indeed, Taylor Energy fears that her actions may cause an environmental catastrophe," it adds.

Taylor Energy has argued that performing more work out at the leak site could be dangerous and cause more environmental harm than good. The underwater mudslide that wrecked Taylor Energy's platform during Hurricane Ivan also buried a cluster of oil wells under mounds of treacherous sediment, preventing the company from employing traditional techniques to plug them.

Taylor Energy plugged nine wells, leaving 16 unplugged. Federal regulators believe oil and gas is leaking from at least one unplugged well. They have warned that the leak could last a century or longer if left unchecked.

The company has insisted there is no evidence any wells are still leaking. It claims residual oil is oozing from sediment on the seafloor. And, in a court filing several years ago, Taylor Energy said experts concluded in 2014 that the sheens contained an average volume of less than 4 gallons per day.

But a 2015 investigation by The Associated Press revealed evidence that the leak is worse than the company, or government, had 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 the company's estimate.

Taylor Energy filed three separate federal lawsuits on Thursday in the Eastern District of Louisiana. One challenges an Oct. 30 decision by the Interior Board of Land Appeals, a federal regulatory agency that refused to excuse the company from requirements to permanently plug oil wells that could be the source of the leak.

Taylor Energy also sued Couvillion Group LLC, the Louisiana-based company contracted by the Coast Guard to design and construct the new containment system. Taylor Energy claims Couvillion Group isn't qualified to perform the work and is unfamiliar with the "lengthy and complex history" at the leak site.

"Taylor Energy also placed Couvillion on notice that it will hold Couvillion responsible for any damages, environmental or otherwise, that might arise out of Couvillion's reckless and grossly negligent activities at the (leak) site," the suit says.

Taylor Energy sued the federal government in 2016 to recover millions of dollars it set aside for leak-related work. The suit claims regulators violated a 2008 agreement requiring the company to deposit approximately $666 million in a trust to pay for leak response work. The company argued the government must return the remaining $432 million.

During a hearing in September, a government lawyer asked a federal judge to dismiss that suit. The judge hasn't ruled yet.