A state oversight agency rejected a proposal to restart Santa Barbara County oil pipelines without installing shutoff valves.

The Office of the State Fire Marshal issued a rejection letter to Pacific Pipeline Company last week for its revised risk analysis, and denied the idea that it couldn’t install the valves because the county didn’t issue permits.  

The pipelines have been shut down since one ruptured and caused the 2015 Refugio Oil Spill that fouled the Gaviota Coast.

As one of the steps toward state approval to restart, these pipelines are subject to a CBAT (coastal best available technology) risk analysis to minimize oil spills and the volume of a possible spill.

In 2021, the OSFM approved a risk analysis that included installing four shutoff valves along the troubled pipeline.

It rejected the revised risk analysis that was submitted in April, which did not propose shutoff valves, OSFM spokesperson Kara Garrett said.

The “worst-case discharge volume in the previous plan was lower,” indicating that the 2021 proposal has “superior spill volume reduction and associated environmental benefits,” wrote James Hosler, chief of pipeline safety and CUPA programs, in the July 10 rejection letter.  

Pacific Pipeline claimed that the county’s actions (not approving permits) have made valve technology unavailable.  

OSFM did not accept that.

“Our office does not perceive permitting issues at the local level as determinative of the availability of valves in general,” Hosler said.

“It is our understanding that Pacific Pipeline currently possesses the valves required for installation, and that discussions around permitting issues between the County of Santa Barbara and Pacific Pipeline are being held to resolve the differences between the two parties.

“No other pipeline in the state has been denied construction permits for valves to comply with state law and reduce spill volumes, and we see no difference here.”

Hosler said the agency looks forward to working with Pacific Pipeline on implementing the approved risk analysis.

That document, which Noozhawk received through a Public Records Act request, says installing four shutoff valves “reduced the baseline worst case volume of 3,622.2 barrels to 1,871.4 barrels, a 48% reduction.”

(The estimated spill volume during the Refugio Oil Spill was 123,228 gallons, which is 2,934 barrels).

Federal Lawsuit Over County Permits

Pacific Pipeline Company applied for permits to install shutoff valves, which the County Planning Commission denied.

The Board of Supervisors took no action after a split 2-2 vote. Supervisor Joan Hartmann recused herself since the pipeline comes close to her property.

Pacific Pipeline filed a federal lawsuit in November challenging the Planning Commission and Board of Supervisors for their “unlawful refusal to approve PPC’s permit applications to install automated safety valves.”

These valves represent the best available technology and would minimize the volume of a potential oil spill, PPC argued.

In its answer, county attorneys generally denied the allegations, and said PPC lacks standing to bring the claims in the petition.

The two sides are currently in settlement talks, with a joint status report due to the court next week.  

County spokesperson Kelsey Gerckens Buttitta said a motion for summary judgment will be filed in August. Pacific Pipeline is expected to file a cross motion for summary judgment, with a hearing planned in December.

Pipeline History

After the Refugio Oil Spill, pipeline owner Plains All American was found criminally and civilly liable.

The company sold the pipelines to Exxon and its subsidiary Pacific Pipeline, which needs it to transport oil to refineries from its offshore platforms and Gaviota Coast processing facilities.

Sable Offshore Corp. was created in February to take over local oil production assets and pipeline restart efforts. The sale and the merger creating Sable were first announced in 2022.

Sable Offshore Corp.’s chairman and CEO declined to comment on the OSFM rejection letter.

Santa Barbara County also declined to comment.

Sable still needs county approval for an ownership and operatorship transfer on its permits. Exxon is the current owner and operator.   

Planners issued a third incompleteness letter for the application last week, asking for more information about employees, spill response and the transition plan.

Restart Timeline

Sable has repeatedly told investors it hopes to restart this year. Executives repeated the claim in SEC filings last week, even as it disclosed the OSFM rejection letter.

The revised risk analysis was filed in response to the county denying valve installation permits, a July 11 SEC filing said.

The OSFM “reaffirmed that the 2021 Plan remains in effect as it has the best available technology.” Pacific Pipeline and the county are “actively engaged in discussions” to resolve the permit denial, wrote Gregory Patrinely, executive vice president and chief financial officer.

“PPC is committed to following the OSFM directive and looks forward to resolving this Santa Barbara County permit issue so that the safety valves can be installed,” Patrinely wrote.

“Restart is expected in late third quarter 2024 or early fourth quarter 2024.”

PPC and Sable have abandoned the plan to build a replacement pipeline, and are pursuing the restart as the way to get the Santa Ynez Unit operating again.

In October the company told the county that environmental impacts associated with building a second pipeline are “unnecessary and avoidable.”

A recent class action settlement with property owners affected by the Refugio Oil Spill makes a new pipeline even less likely: Sable would have to negotiate new right-of-way agreements.

Community Opposition

The restart attempts have been met with community opposition every step of the way.

This week, the Environmental Defense Center said it was “pleased” that the OSFM rejected the revised risk analysis.

“Restarting the same compromised pipeline that caused one of the worst spills in recent California would be extremely dangerous,” said Alex Katz, executive director of the Environmental Defense Center, in a statement.

“Not only would it invite another disaster on our coast, but it would bring the single largest source of greenhouse gas emissions in the county back on line, directly conflicting with the state’s climate goals. EDC will continue to work to stop approvals of this project from happening at the county, state, and federal levels,” Katz said.