The company that won the first-ever bid in the oil and gas privatization era for Mexico — earning the right to tap into two designated blocks in the country’s shallow water coast of the Gulf of Mexico — leaked 252 gallons of a liquid form of raw natural gas into the Gulf in a July 2013 shallow-water accident off the coast of Louisiana.
Talos Energy, the Houston, Texas-based company responsible for the spill, won the July 15 bid and will do the drilling in a joint venture alongside Sierra Oil & Gas and Premier Oil.
The leak — producing a self-described “rainbow sheen…more than four miles wide by three quarters of a mile long” — transpired on an inactive well formerly owned by the company Energy Resources Technology, which Talos bought as a wholly-owned subsidiary earlier that year.
Both the U.S. Bureau of Safety and Environmental Enforcement (BSEE) and the U.S. Coast Guard led the cleanup effort.
Performance (Non)-Improvement Plan
A couple weeks after the leak, BSEE wrote a letter to Talos calling on the company to get its compliance with federal regulations “improved immediately.”
Image Credit: U.S. Bureau of Safety and Environmental Enforcement
“Failure to improve overall performance will subject [Talos] to additional enforcement actions up to and including possible referral to the Bureau of Ocean Energy Management (BOEM) to revoke [Talos’] status as an operator on all of its existing facilities,” wrote BSEE.
“To demonstrate improved performance and to avoid a referral to BOEM, you must submit a Performance Improvement Plan (PIP) to be approved by BSEE. The PIP will address BSEE‘s concerns and detail how you will bring your operations into compliance.”
Talos did submit a PIP, but with one huge caveat: it didn’t actually offer BSEE a corrective action plan for how it would avoid another similar incident, according to the BSEE website. Talos currently sits as one of two companies operating under BSEE‘s PIP watchdog program.
Taken as a whole, the incidents serve as an important reminder. Put simply, the story of energy sector privatization is not just one of cronyism both in the United States and Mexico, but is also one of potentially devastating ecological, climate change and human consequences.
Talos has already signed onto another joint venture with Sierra Oil & Gas to bid for more shallow-water blocks on the Mexico side of the Gulf of Mexico, a bid expected to take place on September 30. This time around, Talos and Sierra will team up with Carso Oil and Gas, a company owned by Carlos Slim, the second richest man on the planet.