Federal regulators seek record fine over Louisiana offshore oil spill

BATON ROUGE, La. (WAFB) – The U.S. Department of Transportation under President Donald Trump is seeking a record $9.6 million civil penalty against a pipeline operator over a massive offshore oil spill that sent more than 1 million gallons of crude into waters off Louisiana.

Transportation Secretary Sean P. Duffy and the Pipeline and Hazardous Materials Safety Administration, known as PHMSA, announced the proposed penalty against Panther Operating Company for violations tied to the November 2023 failure of the Main Pass Oil Gathering pipeline system.

PHMSA said the $9,622,054 penalty is the largest civil fine ever proposed in a pipeline safety enforcement action.

Federal investigators concluded the spill released about 1.1 million gallons of crude oil into the Gulf after a subsea pipeline connector failed and operators did not shut the system down for hours.

“Safety drives everything we do,” Duffy said in a statement. “When companies fail to abide by the rules, we won’t hesitate to act decisively.”

According to PHMSA, the violations involved failures in integrity management, operations and maintenance, leak detection, emergency response and protections for high-consequence areas.

The agency also proposed a compliance order requiring Panther to overhaul how it evaluates geological and geotechnical risks affecting the pipeline system.

The spill occurred along the 67-mile Main Pass Oil Gathering system, which transports crude oil from offshore production areas south of New Orleans. Oil was first spotted roughly 19 miles off the Mississippi River Delta, near Plaquemines Parish.

Federal investigators later determined the pipeline was not shut down for nearly 13 hours after pressure data first suggested a problem. Regulators said quicker action could have significantly reduced the volume released.

The National Transportation Safety Board said underwater landslides and storm-related seabed movement contributed to the failure and that the operator did not adequately account for known geohazards common in the Gulf.

PHMSA said Panther must now develop a plan to protect the pipeline against future external forces such as seabed instability, erosion and storm impacts. The company has 30 days to respond to the notice of probable violation and proposed penalty.

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