(The Center Square) − Dismissal of offshore oil and gas policy litigation contradictory to the Trump administration’s goals are being sought by Louisiana Attorney General Liz Murrill.
She’s made the request to Attorney General Pam Bondi.
In a letter sent Sept. 24, Murrill said the Department of Justice’s litigation under the Oil Pollution Act of 1990 has destabilized the insurance market that underpins offshore energy operations and placed Louisiana jobs and production at risk.
“The DOJ filed the lawsuit in question during the waning days of the Biden Administration and have directly harmed the Louisiana energy industry,” Murrill wrote. “The novel position taken by the DOJ is fundamentally contrary to well-settled insurance law and reverses decades of accepted, lawful interpretation and application of insurance policy coverage.”
At the center of the dispute is a lawsuit filed in 2024 that seeks to recover insurance payments related to the 2004 Taylor Energy spill in the Gulf of Mexico. The Justice Department says multiple years of insurance coverage may apply to the long-running spill – an interpretation Murrill say upends long-standing industry norms.
According to the letter, the Biden administration’s reinterpretation of the term “incident” under OPA 90 could expose insurers to liability for policies that weren’t even in effect at the time of Hurricane Ivan, the storm that caused the original damage. Murrill warned the move has already prompted insurers to withdraw from the Oil Spill Financial Responsibility market or raise premiums to unsustainable levels.
Murrill emphasized Louisiana’s role as “the epicenter of America’s offshore oil and gas industry,” noting the sector supports more than 100,000 jobs and thousands of small businesses across the state. Production from the gulf has averaged nearly 1.8 million barrels per day, she said, and could increase with new high-tech projects coming online.
Without adequate insurance coverage, however, operators could lose their Oil Spill Financial Responsibility certification and be forced to suspend offshore operations. Murrill warned such an outcome would “result in job losses in Louisiana, energy market disruptions, and increased liability for the federal government.”
The letter invokes Trump’s January executive order directing federal agencies to encourage exploration and production on federal lands and waters. It also requires the Department of Justice to identify and address court actions inconsistent with the policy.
“Given the direct negative impacts on American energy dominance, we have been optimistic – and presumed – the DOJ would abandon its litigation and dismiss its lawsuits,” she wrote. “Louisiana continues to play a leadership role in driving the country forward with the infrastructure and investments to grow energy production consistent with the vision of President Trump.”
