A group of international shipping companies and their subsidiaries tentatively agreed Wednesday to pay $96.5 million to Houston-based Amplify Energy Corp. to dismiss one of the last remaining lawsuits over the oil spill, which sent at least 25,000 gallons of crude into the waters off Huntington Beach in October 2021.
Per the LA Times, companies linked to the cargo ships accused of dragging anchors over Amplify Energy’s pipeline have agreed to pay $45 million to settle lawsuits. The ships were identified by Sky Truth (see above image) shortly after the spill (October 1, 2021).
Meanwhile, Amplify is suing the vessel owners for damaging the pipeline and failing to notify the authorities after the damage occurred. Amplify would seem to have a good case given that inspection reports indicate that the pipeline was in good shape prior to the anchor damage and that the Beta Unit platforms had a good safety and compliance record.
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.”
A federal investigation into the October oil spill that paved the Orange County coast has been stalled for several months as authorities await approval to cut, remove and analyze part of the ruptured pipeline.
Coast Guard and National Transportation Safety Board investigators currently have to rely on video captured during underwater pipeline inspections. Without a more detailed forensic examination of the damage in a lab, investigators won’t know whether to continue with their original investigation or move the investigation in a new direction.
It’s not good when bureaucratic processes stall an important investigation. Hopefully the responsible agencies will be sufficiently embarrassed to get the investigation moving.
According to the Coast Guard, investigators determined the ship “was involved in an anchor dragging incident on Jan. 25, 2021 during a heavy weather event that impacted the Ports of L.A. and Long Beach.” The anchor- dragging occurred “in close proximity” to an underwater pipeline later determined to be the source of the October leak that spilled thousands of gallons of oil into the ocean, forcing the closure of beaches and harbors across Orange County.
The hearings and the liability battles that follow will be most interesting. Those lined up to sue the pipeline operator (Amplify), such as this Huntington Beach disc jockey, may have difficulties.
This quote from an AP article is consistent with the view expressed here after our review of the inspection reports for the Beta Unit (Platform Elly to shore) pipeline. Further per the AP article:
Safety inspections in 2015, 2017 and 2019 found anomalies in Amplify’s pipeline, including instances of metal loss and three dents that were previously repaired. But several experts who reviewed the reports said the metal loss — which can be a sign of a pipe wall thinning as it corrodes with age — was relatively minor. The dents were not in the same area as the spill.
Matt Harty, a 61-year-old retired construction supervisor from the nearby community of Seal Beach, said he was glad to return to the waves in Huntington Beach with other early morning surfers. He said he’s seen oil spills before and this one didn’t seem that bad, and in fact, the beach looks great.
“This is the cleanest I’ve seen the beach in years, right, because there’s been nobody here for a week,” Harty said. “I think they cleaned it up really well.”
While the size of the spill isn’t known, the Coast Guard on Thursday slightly revised the parameters of the estimates to at least about 25,000 gallons (95,000 liters) and no more than 132,000 gallons (500,000 liters).
So far the impact on wildlife has been minimal – 10 dead birds and another 25 recovered alive and treated – but environmentalists caution the long-term impacts could be much greater.
AP 10/9
Comment: One gets the sense that some anti-production activists are disappointed that the spill is not the environmental disaster needed to end oil and gas production in U.S. offshore waters, that the pipeline operator is (at most) only partially responsible, and that the primary regulators have been doing their job despite outdated regulations and jurisdictional uncertainty.
So far, two proposed class-action lawsuits have been filed on behalf of a disc jockey who runs beachfront events in Huntington Beach and a surf school that operates in the city known as “Surf City USA.”
Bud's Offshore Energy (BOE) 