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Refugio Oil Spill Could Be 40 Percent Larger Than Estimated

Numbers released Wednesday show the amount of crude oil spilled on the Gaviota Coast earlier this year may be 40 percent more than initially estimated by the pipeline company responsible. 

Plains All American Pipeline, the Houston, Texas-based oil company responsible for the May 19 oil spill near Refugio State Beach, issued a worst-case scenario number of 101,000 gallons for the amount that flowed from the 24-inch pipeline onto the coastline and into the Pacific Ocean. 

Based on updated calculations, that number could be as high as 142,800 gallons, according to Plains. 

The company released this information as part of its second quarter earning presentation and conference call. 

The ruptured Line 901 was found to be badly corroded and authorities ordered Plains to also shut down Line 903, which carries processed crude oil through Santa Barbara County to refineries in other areas. 

In spite of the spill and pipeline closures on the Santa Barbara County coast, the company is still having a successful year and posted $486 million in profits before taxes for the second quarter of 2015.

The company is planning major expansion projects in the Permian Basin in Texas and Saskatchewan.

Company representatives have held fast to the 101,000 gallons number since the beginning of the spill, in spite of being questioned by the press for updated numbers as tar ball sampling showed that oil from the spill reached as far as Los Angeles County

In June, the company completed the process of emptying and purging the ruptured Line 901, which provided them with additional data about how much oil would have been spilled in the worst-case scenario.

“Based on preliminary analysis, an alternative calculation using the purge data could be as much as 1,000 barrels higher than the worst estimate” using the previous calculations, the Plains report said.

That pushes the potential amount spilled to 142,800 gallons, a 42 percent increase from previous estimates.

The company had come up with the initial estimate using information including how much oil flowed into Line 901 during the period between the estimated time of the spill and when the pumps were shut down.

Using the data gathered during the purge of the pipeline puts that number at a higher amount, however.

“As part of our effort to reconcile these differences, we have retained an outside, third party consulting firm to review the materials and submit a report, but such study has not been completed,” the report said.

That new number has not been finalized, and could change as the investigation around the spill continues.

“Any variance between the current and final estimate of the worst case discharge is not expected to impact our estimate of response, cleanup and remediation costs, but could impact our estimate of fines and penalties.”

The Plains report notes that several agencies are investigating the incident, including federal regulators from the Pipeline and Hazardous Materials Safety Administration

In late May, the U.S. Attorney General for the Department of Justice, Central District of California, Environmental Crimes Section began an investigation as to whether there were any violations of federal criminal statutes, including potential violations of the Clean Water Act.

Plains stated that it is cooperating with the DOJ’s investigation by responding to its request for documents and access to their employees.

The California Attorney General’s Office and the Santa Barbara County District Attorney’s Office are also investigating.

The company also stated that since the claims line for damages was established, they’ve received a “number of claims” as well as six class action lawsuits.

Plains estimates that the total costs related to the incident will be about $257 million, which include costs for emergency response and clean-up. 

“This estimate does not include any lost revenue associated with the shutdown of Line 901 or 903,” the statement said.

The company also reportedly has insurance to protect them in the event of an environmental emergency which could cover up to $192 million of the costs, including clean-up costs. 

Noozhawk staff writer Lara Cooper can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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