"The agency said Third Coast didn't establish proper emergency procedures, which is part of why the National Transportation Safety Board found that operators failed to shut down the pipeline for nearly 13 hours after their gauges first hinted at a problem. PHMSA also said the company didn't adequately assess the risks or properly maintain the 18-inch Main Pass Oil Gathering pipeline."
"Pipeline Safety Trust Executive Director Bill Caram said this spill "resulted from a company-wide systemic failure, indicating the operator's fundamental inability to implement pipeline safety regulations," so the record fine is appropriate and welcome."However, even record fines often fail to be financially meaningful to pipeline operators. The proposed fine represents less than 3% of Third Coast Midstream's estimated annual earnings," Caram said. "True deterrence requires penalties that make noncompliance more expensive than compliance.""
PHMSA assessed a $9.6 million penalty against Third Coast for a 2023 leak of 1.1 million gallons of oil into the Gulf off Louisiana. The fine is roughly equal to the agency's typical annual total fines and is small relative to Third Coast's roughly 1,900 pipeline miles and a nearly $1 billion loan. Regulators cited failures to establish emergency procedures, inadequate risk assessment, and poor maintenance of the 18-inch Main Pass Oil Gathering pipeline. NTSB found operators delayed shutdown nearly 13 hours after gauges indicated a problem. Officials said the company failed to perform new integrity analyses after changed circumstances.
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