Jury charges Houston firm in pipeline spill
A California grand jury has leveled criminal charges against Plains All American and one of its employees for a 2015 oil spill that left a Santa Barbara beach covered in crude.
A California grand jury has leveled criminal charges against Plains All American and one of its employees over a 2015 oil spill that left a Santa Barbara beach covered in crude oil.
The Houston-based pipeline giant faces 46 charges alleging that the company violated state laws when a corroded pipeline ruptured and spilled nearly 3,000 barrels of oil that leaked toward the Pacific Ocean. Ten of the charges relate to the crude oil spill and how Plains All American reported it to regulators, and 36 of the charges relate to its effect on area wildlife, according to Plains. James Buchanan, an employee at Plains, faces misdemeanor charges related to reporting the spill.
The indictment is sealed but both Plains All American and prosecutors issued press re-
leases on the case.
Plains All American faces $2.8 million in fines from the criminal proceedings, according to prosecutors. A separate civil investigation is ongoing.
“This conduct is criminal and today’s charges serve as a powerful reminder of the consequences that flow from jeopardizing the well-being of our ecosystems and public health,” California Attorney General Kamala Harris said.
Plains All American called the criminal charges an “inappropriate attempt to criminalize an unfortunate accident.”
In a statement, the company said it had been working with regulators to remedy the damage.
“We will vigorously defend ourselves against these charges and are confident we will demonstrate that the charges have no merit.”
Douglas Richards, an attorney representing Buchanan, said, “My client is not guilty of these unfounded charges, and we look forward to clearing his name in court.”
Corrosion finding
The spill happened on May 19, 2015 after a Plains All American Pipeline called Line 901 ruptured near the Santa Barbara coast and spilled oil onto the nearby Refugio Beach and into the Pacific.
A preliminary investigation by the U.S. Pipeline and Hazardous Materials Safety Administration would later attribute the failure to corrosion caused by the 1,250 barrels of crude that moved through the two-foot wide pipe each hour.
Plains All American estimates that the pipe spilled as many as 2,935 barrels of oil, according to its worst-case estimate in recent regulatory filings. The company estimates that the total cost of the spill will be about $269 million, which includes cleanup and its estimate for fines and certain legal fees over years. On Tuesday, Plains noted it had already spent $150 million to remedy the spill.
The company said in regulatory filings it is funding the cost of defending its employee.
“It’s not uncommon for there to be a criminal indictment in a case like this,” said David Spence, an energy law professor at the University of Texas, particularly when the spill affects water and wildlife.
The spill, at least, was much smaller than disasters such as the 2010 Deepwater Horizon disaster or the 1989 Exxon Valdez tanker spill, he said.
Environmental groups
Environmental groups called the indictments a step toward holding Plains All American responsible for the spill.
“I’m pleased that the authorities have continued to pursue this issue and to investigate it as thoroughly as they have,” said Kathryn Phillips, director of the California chapter of the Sierra Club, an environmental advocacy group.
Plains already faces a number of civil suits related to the spill, according to regulatory documents. The company is defending itself against class-action lawsuits from a range of people affected by the spill, such as fishermen, nearby property owners and retail business owners in Santa Barbara.
Pipeline integrity suit
Investors have also launched a lawsuit alleging that the company misled investors about the integrity of its pipelines. Plains has denied those allegations and others.
The company has shut down Line 901 and the nearby Line 903 and said it does not currently have plans to restart them.