It often seems like polluters don’t get nearly enough attention and punishment from the government—but authorities cracked down on one oil and gas producer that had been shirking its cleanup duties this week in the unusual move of raiding its offices.
Agents from the U.S. Department of Interior and the Environmental Protection Agency searched the offices of QuarterNorth Energy LLC in Lafayette, Louisiana this week, Bloomberg reported Thursday, looking for information on an oil spill at one of the company’s wells QuarterNorth Energy is a new company, but it was formed out of the ruins of an older one: Fieldwood Energy LLC, which filed for bankruptcy in 2020.
According to an investigation filed by the DOI, in January of 2021, there was a pressure incident at a gas well owned by Fieldwood off the coast of southern Louisiana, which was not reported to authorities until August 2021 and was still not fixed a year later, causing a larger spill in January of 2022. “Fieldwood’s lack of mitigation, communication, and urgency to address the issues associated with [the well] played a major role in the events leading up to the incident,” the DOI noted in its report.
Shortly after filing for bankruptcy FieldWood signed a two-year promise in February of last year with federal prosecutors to reach a compromise: in exchange for cooperating with authorities and paying a $2 million fine, the government agreed to not investigate the company for its role in two oil spills in the Gulf in 2015 and 2018. The incident at the well off the coast of southern Louisiana may be in violation of that agreement, sources told Bloomberg, and that may have prompted the raid this week.
Fieldwood’s company’s bankruptcy reorganization plan was approved last year, and last September, Grist detailed how the bankruptcy plan is causing a complex and quiet legal battle between the company over who is going to end up holding the check for their old assets. Part of the company’s plan entailed splitting its more profitable assets between its successor company while transferring older wells to two other corporations—as well as straight-up abandoning some 1,170 wells, 280 pipelines, and 270 drilling platforms, effectively attempting to shirk any sort of responsibility for their cleanup. While federal and local regulations require companies to clean up old drilling sites, even through bankruptcy, this cleanup can often fall to the bottom of the list in financial importance during a bankruptcy hearing; investors scrambling for a remaining piece of the pie will often walk away with all the money that’s left, leaving nothing for environmental damages.
The QuarterNorth/Fieldwood disaster is just the tip of the iceberg when it comes to the dangers posed by oil companies going bankrupt and not doing due diligence on cleaning up their messes. Since 2015, more than 260 oil companies in the U.S. have filed for bankruptcy; many of them are going through processes like the one described above, as they try and figure out ways to wiggle out of paying for their cleanup obligations.