State Attorney General James “Buddy” Caldwell issued a demand letter to Texas Brine Co. LLC and Occidental Chemical Corp. seeking payment for $3.47 million in costs run up by state agencies dealing with an Assumption Parish sinkhole emergency involving crude oil and gas releases as well as a related Texas Brine salt cavern failure.
In a letter dated Thursday and sent to attorneys for the companies, Caldwell demands “immediate full payment” within 30 days or threatens a possible lawsuit against the companies.
Caldwell wrote that a number of state agencies — including the state Department of Natural Resources, the Governor’s Office of Homeland Security and Emergency Preparedness, and the state Department of Environmental Quality — have undertaken “immediate and continuous efforts” to respond to and investigate such things as underground tremors and gas bubbling up in area waterways, the sinkhole’s emergence in early August adjacent to the Napoleonville Dome and related consequences.
Caldwell cited response costs of $3,474,593 incurred from June 19 through Thursday.
State and parish officials have set up a mini-village of specially outfitted recreational vehicles at a command post in Bayou Corne south of La. 70 where the agencies have tested air and water quality and for oil and gas trapped underground. They have investigated the cause of the sinkhole with the help of Shaw Environmental and Infrastructure and several drilling subcontractors.
“As evidenced above, the State of Louisiana has incurred substantial costs in response to the Bayou Corne incident and in the continued investigation of the repercussions of the sink hole caused by the collapse of the Oxy Geismar No. 3 Well cavern owned operated by Texas Brine and Occidental,” Caldwell continued in the letter.
Caldwell’s letter notes that the state would provide a detailed accounting if the companies asked for it and warned that the state was likely to incur more costs and make more demands for reimbursement, as well as for possible fees, fines or penalties.
Sonny Cranch, spokesman for Houston-based Texas Brine, said the company would be asking for the accounting documentation Caldwell cited.
“We have not received a detailed accounting of the costs incurred, but we will request an accounting of those costs, and when we receive it, we will address the issue of payment in the appropriate manner,” Cranch said.
Assumption Parish Sheriff Mike Waguespack and the parish Police Jury also have submitted bills to Texas Brine for more than $125,000 and $196,000, respectively, to recover their response costs.
Cranch said Texas Brine is continuing to review the parish bills.
While Texas Brine has been the longtime operator of the plugged and abandoned brine well believed to have caused the sinkhole, the company has leased the site where the cavern and sinkhole are located from Occidental.
Occidental Chemical, which is a subsidiary of Los Angeles-based Occidental Petroleum Corp., has a major chlor-alkali facility in Geismar, as well as operations in St. James and St. Charles parishes.
The sinkhole’s emergence prompted an evacuation order Aug. 3 applying to 150 homes in the Bayou Corne area. The order, issued to assure the safety of area residents, remains in place.
Located between Bayou Corne and Grand Bayou south of La. 70 South, the sinkhole is now estimated to have a surface size between 6.2 acres and more than 7 acres. The sinkhole is about 111 feet deep, parish and Texas Brine officials have said.
Scientists believe Texas Brine’s cavern inside but near the western edge of the Napoleonville Dome had a wall breach that set off a chain of events suspected of spawning the sinkhole and causing an upwelling of naturally occurring crude oil and gas.