U.S. V. ATP Oil & Gas Corp., Et Al. (E.D. La.)

A view of the Blue Ridge Mountains as seen from Skyland drive.  Courtesy of Jeff Bank (DOJ/ENRD/EO)

EES | Cases by Practice Area

History

ATP Oil & Gas Corp.The Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) inspected the ATP Innovator, a floating oil production platform in the Gulf of Mexico, in 2012 and discovered alleged unlawful discharges of oil and a hidden piping configuration that routed unpermitted “sheen-buster” 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) was the operator of the ATP Innovator, and a related entity, ATP Infrastructure Partners, LP (ATP-IP), was, and remains, the owner.  The ATP Innovator was operating at Lease Block 711 of Mississippi Canyon, approximately 45 nautical miles offshore of southeastern Louisiana. 

On the ATP Innovator, BSEE inspectors found a metal tube hidden in the rafters that was connected to the EPA-permitted outfall pipe used for overboard discharge of wastewater.  The inspectors determined that the tubing was connected to a 550-gallon tank of an amide surfactant chemical blended with methanol that acts to break apart oil molecules into smaller, dispersed droplets. 

Enforcement Action

The facility was cited for several violations by BSEE following the inspection, and the case was referred to the Department of Justice by BSEE and EPA.  Under the Clean Water Act (CWA) it is illegal to discharge oil or hazardous substances into or upon waters of the contiguous zone or in connection with activities under the Outer Continental Shelf Lands Act (OCSLA) in quantities that may be harmful to the environment or public health or welfare.  The United States’ Complaint, filed on behalf of EPA and BSEE in February 2013 in the U.S. District Court for the Eastern District of Louisiana, alleged that oil and an unauthorized chemical dispersant were discharged into the Gulf of Mexico from the ATP Innovator.  The United States in the Complaint sought civil penalties under the CWA and injunctive relief under the CWA and OCSLA.  This was the first joint judicial enforcement action involving BSEE and EPA claims in response to alleged violations of both the CWA and OCSLA.  The joint enforcement action demonstrates the government’s resolve to hold operators of oil production facilities and owners of such facilities accountable for unlawful discharges and other misconduct.

Outcome

In 2013, ATP-IP’s motion to dismiss the claims against it and a related motion for appeal were both denied by the Court.  In 2014, the ATP Innovator was removed from the deepwater production site and towed to port in Corpus Christi, Texas.  The United States subsequently reached a settlement with ATP-IP, which was pending the Court’s approval as of February 2015. Under the settlement agreement, ATP-IP, as the non-operating owner of the facility, will pay a $1 million civil penalty and perform corrective measures and conduct enhanced reporting to address safety and environmental concerns. 

ATP-IP 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.  Additionally, prior to any future use of the ATP Innovator for exploration, development, or production activities in U.S. waters, ATP-IP will have to certify to EPA, BSEE and DOJ that:

  • the facility has sufficient wastewater treatment equipment and operational plans to meet and maintain Clean Water Act permit discharge limits and prevent unlawful discharge of pollutants to offshore waters at all times;
  • the facility’s surface production-safety systems will be maintained in a manner that provides for protection of the environment under BSEE regulations; and
  • all facility operations will be performed in a safe and workmanlike manner in accordance with BSEE regulations.
    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 CWA and and OCSLA compliance if the facility is used or leased in the future by ATP-IP or a related entity.

In 2012, ATP filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.  ATP-IP is not part of the bankruptcy.  The CWA and OCSLA claims against ATP are not part of the settlement with ATP-IP and remain pending for future resolution in the U.S. District Court for the Eastern District of Louisiana.

Press Release

Offshore Oil Platform Owner to Improve Safety and Operations in Gulf of Mexico Following Unauthorized Oil Discharges

 

Updated May 14, 2015