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Shell Offshore to pay $2.2 million fine for 2016 Gulf spill

Shell Offshore to pay $2.2 million fine for 2016 Gulf spill

Shell Offshore Inc. has agreed to pay a $2.2 million civil fine to the federal government to settle charges that the company violated the Clean Water Act by spilling 1,900 barrels of oil into the Gulf of Mexico in May 2016 when a subsea pipeline cracked at the company’s Green Canyon oil field.

The fine, announced in the Federal Register on Friday (Feb. 1), will be paid after the expiration of a 30-day comment period. The money will be deposited in the Oil Spill Liability Trust Fund, which is used to pay for oil spill cleanups.

The new fine is in addition to $3.9 million the company agreed to pay to state and federal agencies in July to settle natural resource damage charges stemming from the spill.

About $3.5 million of that settlement will be used for natural resource restoration projects, with the rest aimed at repaying the agencies’ costs in responding to the spill.

Federal and state “trustees” representing various agencies are working on a draft restoration plan and environmental review, required under the federal Oil Pollution Act, and when complete, it will be released for public review and comment, said Stephanie Morris, an attorney representing the Louisiana Oil Spill Control Office. No date was given for the completion of the plan.

The most recent settlement and an accompanying complaint document were filed in U.S. District Court in New Orleans on Jan. 8. The complaint and a study of the accident by the federal Bureau of Safety and Environmental Enforcement outlined how the accident occurred.

A Shell transfer pipeline that connected to a subsea well in Shell’s Green Canyon Block 248 oil production system in the Gulf of Mexico, about 97 miles south of the Louisiana coastline, cracked and discharged about 80,000 gallons of crude oil.

“Oil polluted portions of the Gulf from the sea floor to the water’s surface and spread across a surface area totaling over 1,270 miles,” the complaint said.

The oil spill was the result of a series of events over several years that resulted in a pipeline installed about 3,000 feet below the surface of the Gulf of Mexico becoming covered with debris and the weight of the debris causing a stress fracture in a joint, allowing crude oil to escape into the water, according to an investigative report released March 9, 2018, by the Department of Interior’s BSEE, which oversees safety issues involving drilling in federally-controlled waters offshore.

The 6-inch pipeline is described as a “jumper,” which was part of Shell’s complex system used to collect oil from wells in the Green Canyon oil field, where it was transferred to other pipelines leading to the company’s Brutus tension leg platform, seven miles away.

Just after 11 p.m. on May 11, 2016, control room operators overseeing oil production in the pipeline system were warned of “substantial acoustic activity” in the pipe, but believed the noise was caused by a bubble of natural gas moving through the pipe, which had caused similar drops in pressure in the pipe in the past, something they called “slugging.”

When the pressure anomaly didn’t end by 5 a.m. the next morning, the operators asked workers to check for leaks of oil from equipment at the surface associated with the Glider oilfield. Just over an hour later, the workers reported no problems with surface equipment, prompting the operators to “shut in” the Glider subsea field, basically turning off the flow of oil into the pipe.

At 7 a.m., a helicopter transporting workers for a crew change on the Glider facility was diverted to look for signs of a leak, and a half hour later reported that they’d spotted an oil sheen on the surface.

“Despite the alarms and sustained pressure loss, Shell continued to actively pump oil through the cracked pipeline for at least another seven and a half hours,” which was in part caused by the company’s failure to provide adequate training for the operators, the civil complaint said.

Under the consent agreement, Shell agreed to improve its leak-detection training program for its operations in the Gulf.

“Since the spill, Shell has provided enhanced training to its control room operators and subsea supervisors,” said the settlement announcement in the Federal Register. “Shell will now develop and conduct refresher training that focuses on leak detection and includes simulator-based exercises that incorporate conditions experienced during the May 2016 spill.”

According to the complaint, the surface oil released from the pipeline traveled west-northwest for five days. “Oil was observed within 75 miles of shore before strong winds mixed much of the remaining oil into the water column,” the complaint said.

Scientists from the University of Georgia and Florida State University who traveled to the oil slick site in the days after the leak reported seeing bottlenose dolphins swimming through oil and balls of fish covered with oil. Seabirds also were seen in the area.



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