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OPEC Cut Could See LNG Prices Rise

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Why Shorting NatGas Makes Sense Now

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Pipeline Owner Must Finish Clean-up Of California Spill

A pipeline company says it will comply with an order from the federal government that it must, under federal supervision, finish the job of cleaning up the thousands of gallons of crude oil that spilled from a break in its underground conduit onto California’s scenic Santa Barbara County beaches and into the Pacific Ocean.

So far a variety of people numbering as many as 1,000 have been involved in cleaning up the spill, which occurred May 19 near Refugio State Beach. They included employees of the federal and state governments, trained volunteers and environmental contractors hired by Plains All American Pipeline, the Houston-based owner and operator of the broken oil carrier.

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On May 27, though, the U.S. Environmental Agency and the Coast Guard issued an order saying Plains must finish the job, both on the coast land and in the ocean, and to make sure the pipeline has been repaired well enough that the 28-year-old pipeline won’t break again.

“There may not be oil on the beach like there was on the first few days, but there is still a problem,” Jared Blumenfeld, the EPA’s administrator for Pacific Southwest region, said at a news conference near the spill site. “That problem needs to be cleaned up. The oil all needs to be removed.”

The federal order set up deadlines and clean-up requirements under the U.S. Clean Water Act to ensure a quick and complete restoration of the shoreline and the ocean. Plains must submit a work plan and explain in detail how it will sample the air, water, rocks and soil affected by the spill.

Rick McMichael, senior director of pipeline operations at Plains, said his company will comply with the order.

The breach in the pipeline dumped up to 2,400 barrels of crude oil onto an immaculate area of Santa Barbara’s coastline and the Pacific, leaving oil slicks that fouled nine miles of the California coast. While much of the beach has been cleaned, Blumenthal said in a statement, “Our action today is to make sure the oil response work continues until the Santa Barbara County coastline is restored.”

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In that statement, Capt. Jennifer Williams of the Coast Guard, who coordinated federal clean-up efforts on the scene, promised, “The Coast Guard will maintain its course to completion. While this defines Plains Pipeline as the responsible party, federal and state agencies will continue to work alongside the responsible party and maintain our priority of safety of the public, personnel and the environment.”

Meanwhile, the Center for Biological Diversity is urging state regulators to deny a proposed enlargement of the only offshore energy drilling operation still allowed in waters off Santa Barbara. Venoco Inc., an oil and gas company based in Denver, wants to drill on 3,400 acres of the sea floor in a wildlife sanctuary adjacent to current offshore lease site to produce 6,400 barrels of oil per day.

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Crude from Venoco’s current drilling is included in the mix of oil carried by Plains All American’s pipeline for shipment to refineries. One leader of the environmental group said that to allow an expansion of Venoco’s drilling area would be tempting fate, given what’s just happened.

“It would be a grave mistake for the state to approve a project that will feed more crude into a pipeline system that just spewed thousands of gallons of oil into the Pacific,” said Miyoko Sakashita, the group’s director of its oceans program.

Venoco had no immediate comment on the demand from the Center for Biological Diversity.

By Andy Tully Of Oilprice.com

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