Lafayette LA (10/27/2014) – Today, October 27, 2014, representatives from Gulfport Energy Corporation (Gulfport) appeared in U.S. District Court in Lafayette, Louisiana for arraignment, at which time they pled guilty to violating one count of 33 USC 1319 (c) (1) (A) specifically, Negligently Discharging a Pollutant into Waters of the United States.
After accepting Gulfport’s guilty plea, the court sentenced Gulfport to pay a criminal fine of $1.125 Million dollars. In addition, Gulfport was ordered to pay $375,000 in community service, of which $125,000 will be paid to the Louisiana Wildlife & Fisheries Public Oyster Seed Ground Account which will help restore the Oyster population in West Cote Blanche Bay, $100,000 will be paid to the Louisiana State Police ? Emergency Services Unit, $100,000 will be paid to Louisiana Department of Environmental Quality and the remaining $50,000 will be paid to the Southern Environmental Enforcement Network. As a result of this investigation, Gulfport has also spent more than $1.3 Million dollars to upgrade their salt water disposal system.
The USAO plans to pursue charges at a later date against the Production Superintendent and Operations Manager.
Background: On March 18, 2012, personnel from the U.S. Coast Guard Marine Safety Unit (USCG-MSU) Morgan City, Louisiana, responded to information provided by a confidential source which alleged Gulfport Energy Corporation (Gulfport), was discharging produced waters into the West Cote Blanche Bay, a navigable waterway of the United States. Gulfport is an Oklahoma City-based independent oil and natural gas exploration and production company with its principal producing properties located along the Louisiana Gulf Coast and has an office in Lafayette, Louisiana. Gulfport was issued a permit by the Louisiana Department of Environmental Quality to operate in the coastal waters of Louisiana and expressly forbids the discharge of produced water.
Upon the unannounced inspection of Gulfport?s oil and gas production platform, the USCG-MSU found the facility actively discharging produced waters to an overboard “sump” by way of a pipe which was connected directly to one the salt water disposal (SWD) storage tanks. The sump, known as a caisson, is adjacent to the production facility and consists of a large pipe placed vertically into the bay with an opening near the bottom which allowed for the discharge of any water sent to the sump. The caisson was designed as a way to capture oil from deck drainage. The purpose of the sump is to receive drainage fluids, such as fresh water and oil, which accumulated during production. After oil and other pollutants separated from the water and floated to the top, they were sucked back into production by the diaphragm pump. The small diaphragm pump removed the oil that accumulated on the surface and directed it back into the production system. Produced water does not float and was discharged directly from the caisson into West Cote Blanche Bay.
The investigation showed Gulfport Operations Manager, Brian Osborn worked from the Lafayette office and rarely visited the production facility constantly ?pushed? contract oil and gas production operators to produce 5,000 barrels of oil per day. In order to meet Osborn?s demands, the production operators opened several dozen production wells, some of which they termed ?milk? wells. Operators defined a ?milk? well, as a well considered to be near the end of its lifespan and in this case produced as much as 97% produced water. By flowing an excess number of wells, the total volume of produced water generated, exceeded the capacity of the facility?s SWD system. As a result, production operators routinely left the valve of the aforementioned pipe open, which allowed excess produced water to discharge directly into the bay.
Harry Schwartz, Production Superintendent, also worked onshore and rarely visited the facility told Investigators the produced water discharge pipe was intentionally connected the SWD storage tank as a way to handle ?emergency? situations such as those times when the production wells sent unexpected surges of produced water to the facility. The pipe would then allow for a discharge directly to the caisson rather than overflowing on the deck of the facility. Gulfport has never reported an ?emergency? discharge from this facility.
Operators admitted produced water was discharged approximately three to five (3-5) days per week for the past several years. A previous Production Superintendent estimated 750,000 barrels of produced water was discharged during the approximate time period of June 2011 to January 2012. Operators told investigators they were able to discharge undetected for many years because they always received notification prior to any government inspections. Prior to an inspection, operators would shut in the aforementioned ?milk? wells, at which time the SWD system would have time to ?catch up? with production and would thus be capable of injecting all of the produced water, at which time the valve on the pipe would be closed.
On September 22, 2014, a Bill of Information was filed in U.S. District Court in Lafayette, Louisiana charging Gulfport Energy Corporation (Gulfport) with one (1) Misdemeanor count of 33 USC 1319 (c) (1) (A) specifically, Negligently Discharging a Pollutant into Waters of the United States.
Gulfport Energy Corporation ? 0605-0064 ? Western District of Louisiana ? Arraignment / Guilty Plea / Sentencing
Case Agent: Matt Myles; Co-Case Agents: Ryan Brignac, LDEQ-CID; Kirk Summers, Louisiana State Police ? Emergency Services Unit
RCEC: David Edelstein
Technical Coordinator: David Robertson
Prosecutor: Assistant US Attorney Myers Namie
National Priority: Energy Extraction
Regional Priority: Brine Spills from Oil and Gas Operations
