Refugio Pipeline Shutdown Puts Brakes on Oil Production

Line 901 of the Plains All American pipeline network starts out at 24 inches in diameter at Exxon’s Las Flores Processing Facility on the Gaviota Coast, runs west along the coastline for 10.6 miles, then turns north into a 30-inch main line. At mile 130, crude oil, propelled by pumps at 10-mile intervals and spinning like water through a garden hose so as not to harden into “Tootsie Rolls” per industry parlance, reaches the Pentland Pump Station in Kern County before it spiders out to refineries across California.

For the foreseeable future, however, the ruptured pipeline will remain empty, save for the stagnant oil now coagulating inside. In addition to patching the rupture that allowed an estimated 105,000 gallons of oil to spill, some of it on Refugio State Beach, Plains All American will have to fulfill a laundry list of corrective measures imposed by the federal Pipeline and Hazardous Materials Safety Administration (PHMSA).

The Corrective Action Order, an eight-page document issued on May 21, calls for purging the affected pipeline, a review of the pipe “for conditions similar to those of the Failure,” mechanical and metallurgical testing, determination of the cause of failure, and restart and remediation plans.

In Santa Barbara County, this section of pipeline carries oil extracted by Exxon, Venoco, and Freeport-McMoRan (formerly PXP), which pay Plains All American a “tariff” or fee for transportation services. The ruptured portion only carried oil from the first two, but the line is also decommissioned where Freeport-McMoRan’s oil enters. Exxon had been pumping 30,000 barrels per day, and the other two operators about 4,000 each, according to Kevin Drude of the Santa Barbara County Energy Division. Other producers may also add oil to the pipeline at the Sisquoc Pump Station, but that activity is not regulated by the county, and Plains All American did not respond to an inquiry by The Santa Barbara Independent.

An Exxon spokesperson would not comment on the impact to the company’s operations other than to say, “We are currently operating at reduced oil rates, while maintaining gas production.” According to Drude, Exxon has enough storage capacity to operate for another week and a half. Freeport-McMoRan did not return calls as of press time. Venoco has exhausted its storage capacity and has already shut down operations. Safety manager Keith Wenal explained that currently the company is performing planned maintenance that would have necessitated shutting down the line anyway. Eventually, though, the busted pipeline will start leaking profits as well as oil. “If it indeed takes more than a few weeks, then we’ll start looking at [transportation] alternatives,” said Wenal.

It will almost certainly take more than a few weeks to get line 901 back in action. The deadlines for the corrective measures ordered by PHMSA range between 45 and 90 days, but the feds can take as long as they want to verify Plains All American’s responses with their own experts.

Representatives from the affected energy producers say they are just starting to evaluate their workaround options, but trucking seems to be the only viable transportation alternative. There exists no infrastructure within the county for transferring oil to trains or tankers.

A spokesperson for the Western States Petroleum Association, Tupper Hull, said it should be fairly simple for producers to supplement the loss of supply in Santa Barbara County. The oil normally flowing through the closed pipeline, he explained, is less than 2 percent of the 1.7 million barrels of oil refined in California daily. For that reason, he did not think consumers will notice any price changes.

“Refining oil is a necessary process that does have risk, and the oil industry does everything it can to minimize those risks,” Hull said, although he did concede, “We fell down on this latest incident.”

Editor’s Note: This story has been corrected to state that Exxon pumps 30,000 barrels of crude, not gallons.