The California Office of State Fire Marshall (OSFM) denied approval of Pacific Pipeline Company’s safety plan required to restart the pipeline that ruptured and spilled 142,000 gallons of oil into the ocean near Refugio State Beach in 2015. The pipeline approval is a key component of the company’s plan to restart onshore and offshore operations in the Santa Ynez Unit by July 2024. The OSFM decision is the latest development in an ongoing struggle over the Santa Ynez Unit since ExxonMobil shut it down in 2015 following the pipeline rupture.
Pacific Pipeline Company, a subsidiary of Sable Offshore Corporation, filed an amended risk analysis and implementation plan for the pipeline after Santa Barbara County denied the permits needed to comply with a plan approved in 2021. The OSFM rejected the amended safety plan for the coastal best available technology (CBAT), stating that it was inadequate because “worst-case discharge volumes” in the plan were higher than those in the plan that previous owner Plains All American Pipeline submitted in April 2021. The 2021 plan remains in effect.
The safety plan is required to comply with AB 864, which was passed in response to the 2015 oil spill. Under AB 864, operators of pipelines under the jurisdiction of the OSFM Pipeline Safety Division and located in or near the coastal zone must retrofit the pipelines with “best available technologies” to reduce the volume of a potential oil spill. These technologies include leak detection technology, automatic shutoff systems, or remote controlled sectionalized block valves.
Santa Ynez Unit Assets
The Santa Ynez Unit consists of the three offshore platforms located in federal waters as well as an onshore oil processing plant located in Las Flores Canyon, near Goleta, and related pipelines. The pipelines, originally known as Line 901 and Line 903, run for 122 miles from the Las Flores Canyon Pump Station on the Gaviota coast to Pentland in Kern County.
Pacific Pipeline Company purchased Line 901 and Line 903 from Plains All American Pipeline in October 2022 with the plan to build a new oil pipeline in order to restart offshore oil production. The company registered the pipelines as the “Las Flores Pipeline System” under OSFM identifiers CA-324 (formerly 901), CA-325A (formerly 903 Gaviota to Sisquoc), and CA-325B (formerly 903 Sisquoc to Pentland). In 2023, Pacific Pipeline Company withdrew its application to build a new pipeline and focused on restarting the original pipelines.
In February 2024, Sable acquired the Santa Ynez Unit from Exxon along with ownership of its Pacific Pipeline subsidiary after Exxon ended its efforts to restart the Santa Ynez Unit. Exxon took an impairment charge of $2.4 billion to $2.6 billion in its fourth-quarter earnings, primarily from the Santa Ynez Unit, stating that “[c]ontinuing challenges in the state regulatory environment have impeded progress in restoring operations” at the facilities.
Sable’s Plan to Restart the Santa Ynez Unit
Pacific Pipeline Company’s decision to file an amended risk analysis and implementation plan for the pipeline restart came after Santa Barbara County denied permit applications to install 16 safety valves on its Las Flores Pipeline System. Pacific Pipeline needed the permits to comply with the safety plan approved in 2021. In August 2023, the Santa Barbara County Planning Commission denied the permit applications, and the Santa Barbara County Board of Supervisors then came to a 2 – 2 vote on the project in August 2023, resulting in no action. Pacific Pipeline Company and ExxonMobil sued the county in response.
In response, in April 2024, Pacific Pipeline Company, now a Sable subsidiary, submitted a request for OSFM approval of its amended risk analysis and implementation plan for the CBAT for the pipelines in compliance with AB 864. Sable outlined four steps to restart the pipelines: (1) comply with AB 864 CBAT provisions; (2) submit transition plan to Santa Barbara County; (3) gain approval of zoning clearance applications, if necessary, by Santa Barbara, San Luis Obispo and Kern Counties, and (4) gain OSFM approval of a restart plan for Lines 901 and 903.
OSFM Decision on 2024 Plan
In its letter dated July 10, 2024, the OSFM stated that it denied the proposal because the “worst-case discharge volume in the previous plan was lower,” indicating “superior spill volume reduction and associated environmental benefits.” The OSFM noted that Pacific Pipeline’s efforts to “reduce spill response times” is not a CBAT consideration with its “focus is on spill volume reduction, not on spill containment and response.”
In responding to the company’s controversy with Santa Barbara County, the OSFM stated that its office does not consider permitting issues “as determinative of the availability of valves in general.” It notes that Pacific Pipeline currently possesses the required automatic shutoff valves and is currently in discussions around permitting issues with Santa Barbara County. “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,” the OSFM stated.
Outlook for Restart
Pacific Pipeline Company states that it is working with the OSFM to make pipeline repairs and improvements for lines 324 and 325 and now expects to restart the Las Flores Canyon processing facilities and the Santa Ynez Unit offshore production platforms in late third quarter 2024 or early fourth quarter 2024.