A Santa Barbara Superior Court judge ordered Plains All American Pipeline to pay a $3.3 million fine on Thursday after a sentencing hearing for the Refugio Oil Spill criminal case.
Jurors found the company guilty of felony and misdemeanor crimes, including the charge that Plains knowingly discharged crude oil into state waters, or should have known.
“An oil pipeline ruptured, that should not have happened,” Judge James Herman said, after hearing arguments from attorneys on both sides.
Plains’ Line 901, which runs along the Gaviota Coast in southern Santa Barbara County, ruptured on May 19, 2015, and spilled about 142,000 gallons of crude oil onto the shoreline and into the ocean.
Plains knew or should have known that an aging, buried, insulated pipeline would have corrosion issues, and failed to mitigate that, Herman said.
The pipeline rupture was not an issue of if, but when, Herman said.
“There were red flags all over,” he said.
Plains declined probation, but as a company cannot be sentenced to prison time.
So for Plains, any probation condition would be a harsher penalty than the alternative, which is nothing, Herman said.
“There’s no consequences with or without probation for this corporate entity,” he said. After what he saw presented during the trial, he added, “that’s a concern.”
The prosecution team, including Deputy District Attorney Kevin Weichbrod and Brett Morris from the California Attorney General’s Office, asked Herman to sentence Plains to pay $1.25 billion in fines, fees and penalties, but Herman said the law doesn’t support that amount.
He did say that for a company with a net income of more than $2 billion last year, the few-million-dollar fines ordered from this company in past spill cases are “almost equivalent of a traffic ticket.”
The $3.3 million fine includes a base fine of $816,500, the maximum fine for the felony charge ($500,000) with a multiplier, and a $250,000 fine for the notification-related charge.
Herman will preside over restitution hearings in the case later this year, and Plains is expected to appeal the convictions and request a stay of the financial penalties.
The prosecution team, including Santa Barbara County Deputy District Attorney Kevin Weichbrod and Brett Morris from the California Attorney General’s Office, asked Judge James Herman to sentence Plains to pay $1.25 billion in fines, fees and penalties.
Weichbrod asked Herman for additional sentencing terms, none of which were imposed, including sentencing the company to five years of felony probation, paying restitution for all victims, issuing a public letter of apology, and prohibiting the company from operating Line 901 and Line 903.
Plains’ criminal conduct caused a preventable disaster, Weichbrod said.
He summarized evidence from the 3-month-long trial and post-spill investigations, which concluded that Plains failed to detect the pipeline rupture and the external corrosion that caused it.
The company’s history of violations includes 194 spills between 2010 and 2019, and 73 were caused by external corrosion, as the Refugio Oil Spill was, he said.
“Plains will not learn its lesson unless it is forced to change,” he said.
Plains attorney Ariel Neuman said the company did more in-line inspections and confirmation digs than required, and that no regulatory agency said the company was using the wrong tool, because it was the industry standard.
He also said that none of the other violations cases had under-calls (the corrosion was larger than the in-line inspection tool recorded).
Gary Lincenberg, also representing Plains, told Herman that the company has reimbursed agencies for their costs in the response.
The clean-up “left areas in better shape than they were before the spill,” he said.
Several people gave victim-impact statements during the hearing, including some plaintiffs from the class-action lawsuit against Plains that is in federal court, and Environmental Defense Center chief counsel Linda Krop.
The EDC was formed as a direct result of the 1969 oil spill in the Santa Barbara Channel, Krop said, and she recalled being stunned by the smell and sight of crude oil on Refugio State Beach following the May 19, 2015, spill.
The pipeline rupture and spill had a huge environmental impact on more than 150 miles of California coastline, she said.
Jim Guelker, a former engineer on vessels that supplied offshore oil platforms, told the court about losing his job after the pipeline ruptured and was shut down, since that pipe transported offshore oil to refineries. His claim for lost wages was denied by Plains and he drained his savings while looking for a new job, he said.
Mary Kirkhart told Herman about renting a home on Miramar Beach in Montecito, and seeing firsthand the impacts of crude oil washing up onto the sand in front of her home, and her neighbors’ homes.
She and her family would frequently walk on the beach and play in the water, but not in the months following the spill, she said.
“We only lived there a few summers, and I feel one of those summers was taken from us,” she said.
— Noozhawk managing editor Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.