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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Louisiana

Wednesday, March 4, 2015

Xplor Energy Sentenced for Felony Clean Water Act Violation

XPLOR Energy SPV-1, Inc. (“XPLOR”), an Oklahoma corporation based in Southlake, Texas, was sentenced today for violating the Clean Water Act.   U.S. District Judge Sarah S. Vance sentenced the company to serve three years of probation and pay a $3.1 million monetary penalty. The monetary penalty includes payments of $2.5 million to the United States Treasury, $600,000 to the Louisiana Department of Environmental Quality Trust Fund.   In November 2014, XPLOR pled guilty to one felony count of knowingly discharging produced water in the Breton Sound Area of the Gulf of Mexico in violation of the Clean Water Act, Title 33, United States Code, Section 1319(c)(2)(A).

According to court documents, from on or about November 24, 1997, until November 18, 2011, XPLOR operated the MP 35 offshore facility (“MP 35 Platform”).   XPLOR operated the MP 35 Platform for the purpose of extracting oil and natural gas.

As part of the oil and gas production, separation and processing, XPLOR was tasked with disposing of the pollutant known as “produced water” or “brine” which is produced with the extracted oil and natural gas.  The MP 35 Platform was designed to dispose of this pollutant by forcing the produced water, under pump generated pressure, into disposal/injection wells located in Gulf of Mexico waters near the MP 35 Platform.

In or near November 2011, XPLOR transferred ownership and operation to another corporation.  The platform’s new owner quickly discovered the platform was continuously discharging produced water containing oil and other harmful substances into the waters of the United States.  The new owner immediately contacted regulatory authorities to report the discharge.  The ensuing investigation revealed that XPLOR had knowingly discharged produced water containing oil into waters of the United States without any permit from faulty injection lines/pipes leading from the platform to the disposal wells used to store the produced water containing oil, and from produced water disposal wells which had insufficient capacity to hold the produced water.  Despite knowing of this consistent discharge from the injection lines and the insufficient capacity of their disposal wells, XPLOR failed to adequately repair these faulty injection lines and disposal wells.  XPLOR’s intentional failure to make these repairs resulted in the repeated discharge of produced water containing oil into the waters of the United States from in or near October 2009, and continuing through to November 18, 2011.  XPLOR’s actions resulted in a total monetary savings or gain to them in the amount of approximately $1,550,000.

“Our Office will continue to work with its law enforcement partners to pursue charges against individuals and corporations whose illegal conduct threatens our region’s natural resources and public health,” stated U.S. Attorney Kenneth A. Polite.

“Developing domestic sources of energy must be done responsibly and safely,” said Daniel J. Pflaster, Acting Special Agent in Charge of EPA’s criminal enforcement program in Louisiana.  “EPA will continue to work with its law enforcement partners to hold companies accountable for illegal conduct, and to assure compliance with laws that protect the public and the delicate Gulf Coast ecosystem from harm.”

 “The Louisiana Department of Environmental Quality will not tolerate any business, corporation or individual that bypasses state and federal laws for personal, professional or monetary gain,” stated Peggy Hatch, Secretary of the Louisiana Department of Environmental Quality.  “We take unpermitted discharges very seriously and will continue to aggressively prosecute those found to be in violation of environmental regulations.”

U.S. Attorney Polite praised the work of the Criminal Investigation Division of the United States Environmental Protection Agency (“EPA-CID”) and the Criminal Investigation Division of the Louisiana Department of Environmental Quality (“DEQ-CID”) in investigating this matter.  Assistant United States Attorney Emily K. Greenfield was in charge of the prosecution.

Updated March 4, 2015