US pipeline regulator proposes record $9.6M fine over 2023 Gulf oil leak

The US Pipeline and Hazardous Materials Safety Administration levied a record $9.6 million fine against Panther Operating Co. LLC in response to a 2023 pipeline leak that released 1.1 million gallons of crude oil into the US Gulf of Mexico.

The agency said the civil penalty is the largest ever proposed in a pipeline safety enforcement action.

PHMSA, a US Department of Transportation agency, said on Jan. 5 the penalty was for alleged safety violations related to an underwater failure in November 2023 on the Main Pass Oil Gathering (MPOG) pipeline system.

"We are sending a clear signal: when companies fail to abide by the rules, we won't hesitate to act decisively," Transportation Secretary Sean Duffy said in a news release. "We'll continue to enforce the law to ensure the safety and efficiency of our energy infrastructure."

The agency's investigation revealed probable violations of hazardous liquid pipeline safety regulations covering leak detection, emergency response and the protection of high-consequence areas. PHMSA issued a notice of probable violation to Panther on Dec. 31, 2025, and gave Panther 30 days to respond.

PHMA also proposed a compliance order requiring Panther to develop a plan to prevent the MPOG pipeline system from future "unanticipated external loads caused by geotechnical and geological hazards," PHMSA said.

The National Transportation Safety Board (NTSB) investigation said weather-related geohazards had moved the pipe in its fitting, leading to a loss of seal. The NTSB also said the failure of a data acquisition system to alert the operator to the leak for more than 11 hours and a slow control room response resulted in the spill of a larger volume of oil than what might otherwise have happened.

The NTSB report estimated that the incident caused $30 million in damage.