'Largest civil penalty ever' imposed for offshore oil pipeline leak

The US Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a $9.6 million fine on Jan. 5 against Panther Operating Co. LLC for its role in the 1.1 million gallons of oil that were leaked in the Gulf of Mexico offshore Louisiana in November 2023.

This single fine is close to the normal total of $8 million to $10 million in all fines that the PHMSA hands out each year, according to an AP report.

Houston-based Panther Operating Co. faces the "largest civil penalty ever" for alleged failures leading up to and during the incident involving its pipeline offshore Louisiana, Main Pass Oil Gathering.

The National Transportation Safety Board (NTSB) concluded in a June report that the pipeline operator failed to act promptly during the incident and also failed to assess the impact of a series of major hurricanes on the pipeline. The NTSB reportedly found that a Panther controller and a supervisor doubted the data they were seeing that indicated pressure changes and an oil flow mismatch. They decided not to shut down the pipeline. Thus, the pipeline remained active until the next morning, allowing more crude oil to flow into open waters in the Gulf.

Panther operates the pipeline on behalf of Third Coast Infrastructure, the NTSB said.

Houston-based Third Coast Infrastructure has a stake in some 1,900 miles of pipelines, and in September 2025, the Houston-based company announced that it had secured a nearly $1 billion loan.

Pipeline safety regulator PHMSA reported that Third Coast didn't establish proper emergency procedures, which is part of the reason the NTSB 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.

As reported in the AP report, 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."

"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 added. "True deterrence requires penalties that make noncompliance more expensive than compliance.”

Moreover, a Third Coast spokesperson said the company has been working to address regulators' concerns about the leak, so it was "taken aback" by some of the details the agency included in its allegations and the size of the fine.

“After constructive engagement with PHMSA over the last two years, we were surprised to see aspects of the recent allegations that we believe are inaccurate and exceed established precedent. We will address these concerns with the agency moving forward," the company spokesperson said.