Oil demand, climate change clash in state pipeline plan
LOS ANGELES » A proposal to replace an oil pipeline that was shut down in 2015 after causing California’s worst coastal spill in 25 years is inching though a government review, even as the state moves toward banning gas-powered vehicles and oil drilling.
Consideration of the $300 million proposal by Houstonbased Plains All American Pipeline is expected to enter a critical phase next year at a time when new scrutiny is being placed on the state’s oil industry after an offshore pipeline break in October near Huntington Beach. That rupture released at least 25,000 gallons of crude that closed beaches and took a deadly toll on sea life along one of the world’s fabled surf breaks.
Farther north, the 123-mile Plains pipeline travels along the coastline near Santa Barbara before turning inland.
It’s buried and nearly invisible for much of its length to Kern County, in the state’s midsection. For decades it was a vital link between oil platforms off the coast and processing plants on shore, with shipments averaging 1.8 million gallons (6.9 million liters) a day.
California Democratic U.S. Sen. Alex Padilla opposes the proposal, bluntly warning of future risks.
“We’ve seen time and time again how damaging offshore oil spills are to our coastal ecosystems as well as to our outdoor recreation and tourism economies,” Padilla said in a statement. “We should not risk repeating history by rebuilding or restarting the Plains pipeline.”
Plains spokesman Brad Leone said the company safely transported 90 billion gallons (341 billion liters) last year throughout North America. “Plains is committed to designing, constructing and maintaining these lines in a safe, reliable manner,” he said.
The project faces numerous hurdles, including a federal class-action lawsuit from property owners who say Plains lacks the right to use existing easements for a new pipeline. Lead trial counsel Barry Cappello said the project would rip up vineyards and coastal ranches and “our clients never signed up for that.”
Shon Hiatt, an associate professor at the University of Southern California’s Marshall School of Business, said the company’s motivation to revive the pipeline is obvious.
“They make money on that,” Hiatt said. “The price of oil is not going to be going down.”
He said the cost of a barrel of oil could top $100 next year. It’s about $77 now.
Documents filed by Plains with Santa Barbara County say the replaced pipeline, though smaller than its predecessor, could move up to nearly 1.7 million gallons (6.3 million liters) a day. At current prices, that much oil would be valued at more than $3 million daily, or potentially over $1 billion a year, though pipelines often do not run at full capacity.
Oil has been drilled in California since the 19th century, but the project is being debated as the state reckons with its fraught history with fossil fuels. Climate change is expanding the threat of wildfires, drought and tidal surges, and the state has positioned itself as a global leader in renewable energy and pioneering policies intended to slow the planet’s warming.
California — by itself the world’s fifth-largest economy — plans to ban the sale of new gas-powered cars and trucks by 2035 and end oil production a decade later. The recent spill in Huntington Beach renewed calls to halt all drilling off the coast.
The Plains pipeline inevitably will be a symbol of that conflict: the desire for oil to fuel cars, heat buildings and make plastics versus growing political pressure to reduce greenhouse gas emissions. The Biden administration — which recently auctioned vast oil and gas reserves in the Gulf of Mexico — faces the same dilemma.
California’s oil and gas industry directly and indirectly supports over 365,000 jobs and has an annual output of over $150 billion, one study of 2017 data estimated. Nationally, the industry supported nearly 17 million jobs in 2020, according to a report from the Texas Independent Producers and Royalty Owners Association, a trade group.