Plains All American has agreed to pay over $60 million in penalties and clean-up costs after a May 2015 pipeline spill west of Santa Barbara, California. The spill, which was caused by corrosion, resulted in the release of 2,934 barrels of crude oil onto Refugio State Beach and the Pacific Ocean.
Plains (market cap $4.9 billion) has its head office in downtown Houston. It has 18,000 miles of crude oil and NGL pipelines as well as 9,100 rail cars and 1,600 trucks and trailers.
The 24-inch pipeline runs from Exxon Mobil’s storage tanks in Las Flores westward to Plains’ Gaviota pumping station. Plains failed to detect the extent of the corrosion. The company was also faulted for waiting 80 minutes after the initial rupture before notifying the California authorities. In addition, Plains did not identify or account for a nearby storm drain in its emergency response plan. The crude oil that escaped flowed through the storm drain directly onto the beach.
Plains will pay
- $24 million in penalties
- $22.3 million in natural resource damages
- $10 million for reimbursed natural resource damage assessment costs
- $4.3 million for reimbursed Coast Guard clean-up costs