Jakarta, INTI - US pipeline safety regulators have imposed their largest ever fine on the company responsible for a 1.1 million gallon oil spill into the Gulf of Mexico off the coast of Louisiana in 2023.
According to a report by the Associated Press, Third Coast was fined US$9.6 million, an amount that is nearly equal to the typical annual total of penalties, which usually ranges between US$8 million and US$10 million, issued by the Pipeline and Hazardous Materials Safety Administration.
Bill Caram, Executive Director of the Pipeline Safety Trust, said the spill was the result of systemic failures throughout the company.
“This reflects a fundamental failure by the operator to comply with pipeline safety regulations, making the record setting fine justified and necessary,” Caram said, as quoted by the Associated Press on Monday.
However, Caram noted that the US$9.6 million penalty does not appear likely to pose a significant financial burden for Third Coast.
Third Coast owns approximately 1,900 miles, or 3,058 kilometers, of pipeline infrastructure. In September 2025, the Houston based company announced that it had secured nearly US$1 billion in financing.
“Even record breaking fines often have little financial impact on pipeline operators. This proposed penalty represents less than three percent of Third Coast Midstream’s estimated annual revenue,” Caram said.
“Effective prevention requires penalties that make non compliance more costly that compliance,” he added.
Third Coast Failed to Properly Implement Emergency Procedures
The agency said Third Coast did not establish adequate emergency procedures, a failure that contributed to findings by the National Transportation Safety Board that the operator did not shut down the pipeline for nearly 13 hours after monitoring gauges first indicated a problem.
PHMSA also said the company failed to adequately assess risks or properly maintain the 18 inch Main Pass Oil Gathering pipeline.
“They did not conduct new integrity analyses or evaluations after changing conditions revealed new and heightened risk factors,” the agency said.
This assessment aligns with the National Transportation Safety Board’s findings in its final report released in June, which stated that Third Coast missed multiple opportunities to evaluate how geological hazards could threaten the integrity of its pipeline system.
According to the NSTB, the offshore Louisiana spill was caused by an underwater landslide triggered by hazards such as storms, risks that Third Coast failed to address despite being long recognized within the industry.
A spokesperson for Third Coast said the company has been working to address regulators’ concerns related to the spill, and was therefore surprised by some of the details included in the agency’s allegations as well as the size of the fine.
“After two years of constructive engagement with PHMSA, we were surprised by certain elements of the latest allegations, which we believe are inaccurate and go beyond established precedent. We intend to continue addressing these concerns with the agency,” the company spokesperson said.
The volume of oil released in the incident was far smaller than the 2010 BP oil disaster, when 134 million gallons were discharged over several weeks following an offshore rig explosion. However, the NTSB said the spill could have been significantly reduced if Third Coast’s control room personnel had responded more quickly.
Conclusion
The record breaking fine imposed on Third Coast underscores serious shortcomings in pipeline risk management and emergency response. While the spill was smaller than past major disasters, regulators concluded that known geological risks and delayed action significantly worsened the incident. The case reinforces calls for stronger safety enforcement and penalties that meaningfully deter non compliance, as pipeline operators face growing scrutiny over environmental protection and operational accountability.
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