Pursuing a record high civil penalty from a pipeline operator involved in a major oil spill, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) sent a powerful New Year’s message to the industry: Keep safety front of mind.
PHMSA’s action comes as energy production booms to meet rising demand.
On Jan. 5, 2026, PHMSA announced that it would seek a $9.6 million fine from Panther Operating Company (the Operator), as well as an internal technical systems review to ensure future compliance with safety regulations.
The proposed record penalty comes after a two-year investigation into a November 2023 incident that saw an estimated 1.1 million gallons of crude oil spill into the Gulf. As a result of the investigation, PHMSA identified 11 alleged violations safety regulations governing the transportation of hazardous liquids via pipeline, 49 C.F.R. § 195, et seq. Specifically, PHMSA alleges the Operator’s internal systems were deficient in their integrity management, operations and maintenance, leak detection, emergency response, and protection for high-consequence areas. Four of those alleged violations contributed to the cumulative civil penalty, while the rest were remediated with a warning.
PHMSA added a Proposed Compliance Order that would require the Operator to undertake steps to ensure future compliance with pipeline safety regulations. Under that order, the Operator must complete a technical review of the anticipated external loads acting on the pipeline, including how the pipeline is designed to withstand foreseeable externally imposed geological hazards. Following that technical review, the Operator is instructed to complete an attendant remediation plan to be submitted to PHMSA.
The Operator has until early February to respond — but PHMSA’s New Year’s message is crystal clear: With 2026 and beyond promising an increased demand in energy and corresponding production, pipeline operators must continue to keep safety front of mind. Pipeline operators ought to take a hard, internal look to ensure compliance with federal hazardous liquid pipeline safety regulations, lest PHMSA attempt to set a new record.
