Oil Spill At Louisiana Private Equity-Owned Company Is Latest Example of Private Profit, Public Risk
Statement from Jim Baker, Executive Director at the Private Equity Stakeholder Project, on the oil spill 19 miles offshore of Plaquemines Parish in Louisiana from the Third Coast Midstream owned pipeline.
Third Coast Midstream is currently private equity-owned. Third Coast is owned by ArcLight and the JPMorgan Infrastructure Investments Fund.
“The oil spill off the coast of Louisiana this week is just the latest example of the dangers of private equity’s increasing ownership of oil and gas assets in the United States.
“The private equity takeover of energy companies has led to high profits for these private companies and their executives while increasing the financial and environmental risks to the public. And this spill is just the latest example. Once again, state, local and federal resources will need to be deployed—at potentially huge cost to taxpayers—to clean up the mess of a private equity-owned energy asset.
“This spill highlights once again these private equity owned assets operate out of the public eye and many times beyond the oversight of financial regulators.
“The company should make taxpayers whole and take full fiscal responsibility for this clean up, and regulators should take a far more aggressive oversight role when it comes to private equity’s investments into energy companies.”
Plaquemines Parish is particularly at risk from the environmental effects of private equity’s fossil fuel investments. Besides the Third Coast oil pipeline, two private equity-owned liquified natural gas (LNG) projects, proposed or under development, are located in the Louisiana parish. Private equity firm I Squared Capital has invested in Venture Global, the operator of Plaquemines LNG Plaquemines LNG is set to have a capacity of 3.40 cubic feet per day (bcfd). Another Venture Global/I Squared Capital project is the proposed Delta LNG, which would have a capacity of 2.76 bcfd.
ArcLight, part owner of Third Coast Midstream, is also the same PE firm that owns the Gavin coal plant in Ohio with PE firm Blackstone Inc. The Gavin plant was the third-largest carbon dioxide emitter among coal plants in the United States in 2020, according to data from the Environmental Protection Agency.
In 2021, ArcLight’s LimeTree Bay oil refinery in the US Virgin Islands was shut down by the EPA after it rained oil droplets on and released noxious gas over St. Croix in four separate incidents.