Rowan Companies and Nine Supervisory Employees Plead Guilty to Environmental Crimes in Connection with Oil and Gas Drilling Operations

WASHINGTON – Rowan Companies, Inc., a major oil and gas drilling company, pleaded guilty today in U.S. District Court in Beaumont, Texas, to three felonies in connection with the routine discharge of pollutants and garbage into the Gulf of Mexico from one of the firm’s oil rigs, the Justice Department announced.

Rowan Companies will pay a $7 million criminal fine, along with community service payments totaling $1 million to five state government enforcement organizations for the purposes of environmental training, education, and enforcement coordination concerning violations of the CWA. Rowan also provided a community service payment of $1 million to the National Marine Sanctuaries Foundation to be used for preservation and protection projects at the Flower Garden and Stetson Banks National Marine Sanctuary located in the Gulf of Mexico off the coasts of Texas and Louisiana.

In addition, as a term of probation, Rowan will reorganize its corporate structure to add an environmental division and to implement a comprehensive environmental compliance plan under which the company will commit that all of its rigs operating in U.S. waters will comply with U.S. and international environmental laws. In cooperation with the U.S. Environmental Protection Agency and the U.S. Coast Guard, Rowan will develop new sandblasting techniques and help establish new industry standards for the minimization and containment of sandblasting debris over water.

“Oil drilling operations must be done in a way that complies with environmental law,” said Ronald J. Tenpas, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Along with paying a criminal fine, Rowan Companies, Inc. is implementing a compliance plan and is helping to set industry standards that will serve as a model for other oil drilling companies.”

“We will continue to use every available resource to prosecute these crimes which compromise our environment and our safety, including criminal fines and penalties,” said U.S. Attorney for the Eastern District of Texas, John Ratcliffe. “I am particularly pleased that part of the fines will go directly to the future protection and preservation of the Gulf of Mexico and the Texas and Louisiana coastline.”

“The defendants sentenced today used the Gulf of Mexico as a dumping ground for oil and other waste,” said Granta Nakayama, Assistant Administrator for the EPA’s enforcement and compliance assurance program. “Today’s actions send a clear message that those who violate the law and pollute our waters will be vigorously prosecuted.”

According to plea agreement, the operation and cleaning of offshore drilling rigs created substantial amounts of waste. For example, the hydraulic cranes on board the Rig Midland required the use of large amounts of fresh hydraulic oil, and routine maintenance and operation of the rig necessitated the use of chemicals, paint, and other materials.

The government’s investigation revealed that between 2002 and 2004, employees on the Rig Midland routinely discharged waste hydraulic oil mixed with water, used paint, paint cans, and other pollutants and garbage into the Gulf of Mexico and failed to notify the government of the discharges in violation of the Clean Water Act (CWA) and the Act to Prevent Pollution from Ships (APPS). The charges associated with these violations were filed in the Eastern District of Texas. In the Eastern District of Louisiana, Rowan pleaded guilty to one CWA felony count for discharging pollutants into the Sabine River as a result of sand blasting operations used to clean the rig in Port Fourchon in 2004.

Nine supervisory employees of Rowan who worked on the Rig Midland pleaded guilty today to charges related to Rowan’s violations. Carl Smith, James Rawson, Warren James, and Randy Hoover each pleaded guilty to negligently discharging pollutants into U.S. waters in violation of the CWA in connection to the sandblasting operations and agreed to pay a $2,500 fine. David Burcham and Murphy Comardelle each pleaded guilty to a failure to report knowledge of a felony in connection with the illegal discharges of waste oil from the Rig Midland, and agreed to pay $5,000 in criminal fines.

Terry Glen Fox and Michael Friend pleaded guilty to misdemeanor charges for negligently discharging waste oil into U.S. waters in violation of the CWA and agreed to pay $2,500 in fines. Finally, Michael Freeman pleaded guilty to a felony violation of the CWA for knowingly discharging waste oil into U.S. waters and faces a maximum fine of $250,000, the exact amount to be determined by the Court.

The case was investigated by the Environmental Protection Agency’s Criminal Investigation Division and the Coast Guard Criminal Investigative Service. It is being prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Eastern Districts of Texas and Louisiana.