A Delaware-based oil company, Cedyco Corporation, has been penalized for negligent oil discharges into Louisiana’s bayous, culminating in a $557,000 federal fine and a mandated cessation of all operations within the state. The case, investigated by a coalition of federal and state agencies, highlights a pattern of systemic neglect regarding environmental safety and regulatory compliance by the Houston-headquartered firm.
The investigation revealed that Cedyco’s substandard maintenance and operational practices at three facilities – Bayou St. Denis, Bayou Dupont, and Well #10 – led to repeated and harmful oil releases into navigable waters. A joint inspection on May 29, 2008, at the Bayou St. Denis tank battery exposed a lack of essential safety measures, including a missing Facility Response Plan, Spill Prevention and Control Plan, and required LDEQ permit. The site was characterized by corroded pipes and visible oil spills.
The Bayou Dupont facility, an oil storage and production platform, presented equally concerning conditions. From February 18 to May 19, 2008, the facility operated without the necessary permits and plans. Inspectors found extensive corrosion, leaks, and defective spill response equipment, with one absorbent boom literally overgrown with vegetation, rendering it useless. Rain events exacerbated the situation, allowing accumulated oil on the deck to flow unchecked into the surrounding bayou.
Perhaps the most direct instance of negligence involved Well #10, located adjacent to the Bayou Dupont facility. Beginning around May 17, 2008, the well experienced a leak that persisted for at least two days. The resulting oil sheen extended for two miles downstream, and an emulsion of oil coated the adjacent shoreline. Cedyco’s failure to properly maintain the well was directly linked to this incident.
Legal Ramifications and Penalties
Cedyco Corporation pleaded guilty on May 23, 2012, to three counts of violating the Federal Water Pollution Control Act, commonly known as the Clean Water Act. This law makes it a misdemeanor to negligently discharge harmful quantities of oil into U.S. navigable waters. The company was sentenced on August 15, 2012, to a $557,000 federal fine, all of which will be directed to the Oil Spill Liability Trust Fund to support the U.S. Coast Guard’s future spill response efforts. Crucially, Cedyco was also ordered to cease all operations and divest itself of all hydrocarbon business interests within the state of Louisiana. This represents a significant blow to the company’s portfolio and a strong signal from the Justice Department regarding environmental enforcement.
The prosecution, a joint effort by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Eastern District of Louisiana, underscores the commitment of federal and state agencies to holding polluters accountable. Officials emphasized that such negligence will not be tolerated and that protecting the environment remains a critical priority. The case involved collaborative efforts from the U.S. Coast Guard (USCG), the Environmental Protection Agency’s Criminal Investigation Division (EPA-CID), and the Louisiana Department of Environmental Quality (LDEQ).
Key Facts
- Defendant: Cedyco Corporation
- Crime: Negligent discharge of oil into Louisiana bayous, violating the Clean Water Act
- Location: Jefferson Parish, Louisiana
- Year: 2012 (incidents occurred in 2008)
- Penalty: $557,000 federal fine, cessation of Louisiana operations, and divestment of hydrocarbon assets
- Facilities Involved: Bayou St. Denis, Bayou Dupont, and Well #10
- Violated Laws: Federal Water Pollution Control Act (Clean Water Act)
- Investigating Agencies: USCG, EPA-CID, LDEQ, Justice Department
Source: Department of Justice press releases, August 15, 2012, and May 23, 2012.
Source: EPA ECHO Enforcement Case Database
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