An oil pipeline company based in Houston has agreed to pay $72.5 million to settle damages claims stemming from a 2015 oil spill in Santa Barbara County that harmed wildlife, closed beaches and shut down fisheries.
Plains All American Pipeline LP agreed to the settlement terms on Oct. 24, ending years of litigation that resulted from the oil spill near Refugio State Beach, where more than 100,000 gallons of crude oil was released as a result of a pipeline rupture, according to the National Oceanic and Atmospheric Administration (NOAA).
The pipeline, called Line 901, was owned by Plains All American. In 2015, it transported oil from an offshore facility, Platform Holly, which was operated by the Venoco energy company. Unable to transport its offshore oil to processing facilities after the pipeline failure, Venoco declared bankruptcy in 2017, leaving the California State Lands Commission on the hook for capping its offshore wells in the Santa Barbara Channel and decommissioning Platform Holly, the commission reported.
“This settlement is a resounding victory that provides taxpayers with tens of millions of dollars,” State Controller and Commission Chair Malia M. Cohen said in a prepared statement. “Throughout this process, the commission has been a fierce advocate for California taxpayers and the environment. Because of our impassioned efforts and tenacity, we were able to secure this landmark settlement.”
While the state will receive $50.5 million from the settlement, the commission’s co-plaintiff, Aspen American Insurance Co., a bonding company, will receive $22 million in compensation. In 2018, a Santa Barbara County jury found Plains All American guilty of one felony count for discharging oil into state waters and 11 misdemeanors, as well as culpability for the deaths of sea lions and brown pelicans.
The litigation history over the spill includes a lawsuit filed by the Venoco Trustee against the commission after the state panel assumed operation of the bankrupt company’s Ellwood Onshore Facility in Goleta, which had been processing oil and gas pumped from Platform Holly. The trustee’s lawsuit alleged that the state’s decision to take over operation of the abandoned facility was an illegal taking of private property.
But a federal district court in Delaware last year sided with the state commission, saying the panel’s decision to occupy and operate the facility was a proper exercise of police powers since constant monitoring of the facility was required to protect the public’s health and safety and the environment.
The commission reported that it has completed the plugging of 30 wells on Platform Holly, which the state is now planning to decommission.
“... I have worked alongside my fellow commissioners to hold polluters accountable and push for a future free from catastrophic oil spills and environmental degradation,” Lt. Gov. Eleni Kounalakis said. “This outcome reflects years of relentless effort to demand justice, address the damage left by negligent operators and reaffirm our commitment to protecting California’s coastline and natural resources. We remain steadfast in leading the charge towards a clean, sustainable energy future.”
The commission consists of the lieutenant governor, state controller and the governor’s director of finance. It is charged with managing more than 4 million acres of California land.
Neither Plains All American nor Aspen American responded to requests for comment.