From 1997 to 2007, Aera operated the Beta Unit offshore Huntington Beach. Since selling those facilities, all Aera operations have been conducted onshore, primarily in Kern County, a historically important California oil production area. Aera will continue to operate these onshore properties for IKAV, which looks like an interesting company.
In addition to the penalty and reimbursement elements of the plea agreement, there are two Amplify commitments that may be of particular interest to BOE readers:
New leak detection system for the pipeline: More information on the leak detection improvements for this low pressure oil pipeline would be helpful.
Notification to regulators of all leak detection alarms:
Which regulators? DOT? BSEE? State? All?
Real time reporting or periodic compilations? With real time reporting for every alarm, the distinction between the pipeline operator and regulator(s) would be blurred and new organizational and competence risks would be added. The probability of communications errors and delayed decisions would increase, and the operator would no longer be accountable for bad decisions.
Also, given that the investigating agencies have still not issued their report on the October 2021 spill and no action has yet been taken against the shipping companies that caused the pipeline rupture, the congratulatory Coast Guard, EPA, FBI, and DOT quotes in the announcement seem rather premature and self-serving.
Martyn Willsher, Amplify’s President and Chief Executive Officer, commented, “We are pleased to have reached an agreement in principle regarding the civil litigation resulting from the Southern California Pipeline Incident last October. Although we are unable to provide additional detail at this time, we negotiated in good faith and believe we have come to a reasonable and fair resolution. We will continue to vigorously pursue our substantial claims for damages against the ships that struck our pipeline, and the Marine Exchange of Southern California that failed to notify us of the anchor strikes.”
Assuming no significant tropical storm shutdowns this month, we should get a good read on the impact of the pipeline outage when the EIA production data for August are posted.
This is a good example of the interconnectivity of deepwater projects with major Shell, Chevron, and Equinor facilities shut-in as a result of a relatively minor downstream pipeline incident.
Mars crude price appears to have reacted to the shut-in news:
One of our very savvy BOE readers shared data (attached) from Oil in the Sea III, a National Academies report that is the best source of information on oil inputs into US waters. The data for Southern California are presented below in 3 charts. The first chart shows that natural seeps are overwhelmingly the leading offshore source of oil entering SoCal waters, with offshore platforms and pipelines accounting for <0.5% of the oil.
The second and third charts exclude natural seepage and compare the coastal and offshore oil inputs from the other sources. When land based transportation inputs are included (chart 2), platforms and pipelines (combined) account for 5.3% of the oil.
Excluding natural seepage and land based transportation inputs (chart 3), recreation vessels are by far the leading source of oil (47.5%), with platforms and pipelines (combined) accounting for less than half that volume (22.2%).
These data add important perspective, but are not intended to discount platform and pipeline spills. These spills can have significant localized impacts, and every effort must be made to prevent their occurrence.
