Nine years after the Refugio Oil Spill, a group of local landowners has reached a $70 million settlement for their class-action lawsuit against the pipeline owners.  

A federal judge gave preliminary approval to the settlement agreement last week.

The class-action plaintiffs include landowners for 183 properties with easements for the former Plains crude oil pipeline that ruptured and caused the May 19, 2015, oil spill.

The case was filed to determine whether the company had to get new easements for a proposed replacement pipeline, and whether landowners would get “adequate compensation.”

Each property owner is expected to receive at least $50,000, and the settlement includes average payments of $230,000, said attorney Barry Cappello, who represented plaintiffs in this case.

“We’re very happy with it,” he told Noozhawk.  

The first half of the settlement will be distributed soon, and the second half will be distributed after the judge gives final approval, expected in September, Cappello said.

Property owners with pipeline easements “are being compensated now for the value of these easements as though they’re being acquired today,” Cappello said.

The pipeline runs along the Gaviota Coast and then northeast through Santa Barbara, San Luis Obispo and Kern counties, carrying crude oil to refineries.

It is now owned by Sable Offshore Corp., which was created in a merger deal to buy the pipeline and ExxonMobil’s offshore oil platforms and processing facility on the Gaviota Coast.

Exxon’s Pacific Pipeline Company already had purchased the pipeline from Plains, the company found criminally and civilly liable for the Refugio Oil Spill.

For the pipeline owner’s side, the settlement agreement is signed by Jim Flores, the president of Sable Offshore Corp. and Pacific Pipeline Company.

“My hat’s off to Sable because Exxon, I was fighting them in front of the Board (of Supervisors), in front of the Planning Commission; They were not interested in compensation that was anything near what was appropriate,” Cappello told Noozhawk.

“When Sable took over, they wanted to have good relations with the landowners and were willing to step up to the plate.”

Flores declined to comment on the settlement agreement.  

PPC dropped the replacement pipeline proposal in October, saying the environmental impact of a second pipeline would be “unnecessary and avoidable.”

The class-action case settlement agreement says PPC/Sable or successors would not build a second new pipeline system without negotiating new right-of-way agreements with property owners.

“We made them put in the agreement that they are not going to apply for a new pipeline,” Cappello said. “Somebody can always say, ‘we’re not going to do this,’ but unless there’s a contract or agreement somewhere, they can change their minds.

“Now it’s in the document there’s not going to be another pipeline.”

What This Could Mean for Pipeline Restart

None of the offshore oil platforms that relied on the pipeline have operated since the 2015 spill, and some are being decommissioned.

ExxonMobil and pipeline owners have been trying to restart oil and gas production for years.

There have been proposals to truck oil to refineries (denied by the county), build a new replacement pipeline along a similar route (dropped by the owners), or repair and restart the existing pipeline.  

The settlement agreement says PPC/Sable will make “reasonable efforts to pursue” automatic shutoff valves for the pipeline, and will comply with the consent decree that Plains signed after the oil spill.

The settlement agreement also says that class counsel – including Cappello – won’t oppose the company’s attempts to add shutoff valves.

While representing landowners in the class-action case, Cappello opposed Exxon/PPC’s requests to change pipeline ownership and to add safety valves to the existing pipeline.

In both cases, he argued that the county shouldn’t approve the requests without safety conditions and/or more environmental review.

The county approved the ownership change.

The Board of Supervisors took no action on the valve project after a split 2-2 vote with Supervisor Joan Hartmann abstaining since the pipeline comes close to her property.

PPC/Sable submitted an alternative coastal best-available-technology plan to the Office of the State Fire Marshal last year, but then withdrew it and resubmitted one after Sable was created in early 2024.

Cappello said he heard from Sable representatives that the newest application to state fire marshal includes automatic shutoff valves.

The fire marshal requires several steps before a start-up plan can be submitted, including an approved CBAT risk analysis, installation of required equipment, compliance with the consent decree, and pipeline safety inspections.