In baseball, ties famously go to the baserunner, but in county government it’s forced a legal fight in the courts. The oil company Sable Offshore is insisting that when the County Board of Supervisors voted 2-2 on whether or not to allow another oil company, Exxon, to transfer its permits to Sable, the tie goes to Sable. Accordingly, Sable — much in the limelight recently — just filed a lawsuit against the Santa Barbara County Board of Supervisors in federal court to make that point. Joining Sable in this dispute is ExxonMobil, the oil giant that sold Sable its three offshore platforms, its 120-mile pipeline, and its onshore oil storage and processing facilities known as the Santa Ynez Unit two years ago.
The supervisors deadlocked 2-2 two months ago when voting on whether to approve or deny the transfer of permits from Exxon — which date back to 1987 — to Sable. Without a simple majority, the county counsel informed the board that the permit transfer could not go forward. (Supervisor Joan Hartmann has recused herself from the deliberations because the pipeline in question runs adjacent to her Buellton property, close enough that, under state law, it constitutes a conflict of interest.)
Sable, however, is arguing that last fall, before the supervisors voted, the Planning Commission had considered the matter and voted 3-1 to allow the transfer and that, when the supervisors had a tie vote, the Planning Commission’s vote would trump the County Board of Supervisors. That was not what the supervisors were told. They were instructed that the board’s tie vote meant that no transfer was permitted.
With this lawsuit — threatened almost from the day the supervisors voted — Sable is asking a federal judge to uphold the Planning Commission’s approval.
If all this seems too esoteric for words, it is; but the stakes are also incredible high. At issue is whether Sable will be able to get the green light needed to restart an oil operation that’s been effectively shut down for the past 10 years.
The transfer permit by itself would not accomplish that, but it offers the only direct leverage over the restart that the supervisors actually hold. As such, it’s extremely limited and indirect.
Ten years ago is when the pipeline sprung a major rupture by Refugio along the mountain side of Highway 101, spewing out 142,000 gallons of oil. Much of that oil managed to cross under the freeway via culvert and make its way into the ocean. Federal pipeline safety officials blamed corrosion for the rupture, and state and local prosecutors secured guilty verdicts against the pipeline operator at the time for criminal negligence. Ultimately, that company has spent hundreds of millions cleaning up the mess and settling with aggrieved victims; it is currently still in litigation against its insurance carrier over the expenses incurred.
The ghost of that pipeline spill — still a bright line-in-the-sand issue among Santa Barbara’s environmental community — has haunted Santa Barbara’s offshore oil operations ever since. Sable Offshore, a new start-up oil company with no other assets or operations elsewhere, is hoping to exorcise that ghost. “The law is clear. The Planning Commission approved the permit transfer and its decision stands,” declared Steve Rusch, Sable’s vice president of environmental and governmental affairs. “Because the permits have yet to be transferred, Sable has asked a court to intervene and transfer the permits without delay.”
According to the lawsuit, ExxonMobil has suffered because it remains legally on the hook for a facility it no longer owns. Sable, conversely, has been prevented from taking legal advantage of a property it, in fact, does own. The lawsuit faulted supervisors Laura Capps and Roy Lee who opposed the transfer; one — Lee — the lawsuit noted, described the transfer as an “insane idea.” Capps, it added, described the method by which the transaction was financed as “fishy,” both being outside the scope of legal relevance for the board’s decision making.
Santa Barbara may be the only county of California’s 58 that ever enacted a law to regulate the transfer of ownership of oil facilities. It was passed in 2001 at a time when county energy planners worried that the high volume of such transfers then occurring might pose environmental and industrial perils if under-financed and less-experienced operators took over from those with deeper pockets and deeper benches of experienced personnel. The fear was that such an under-financed company might create a mess it could not afford to contain or clean up.
On that score, the Planning Commission voted that Sable passed the smell test. Environmental organizations intent on blocking Sable from restarting Exxon’s old facilities appealed to the Board of Supervisors. They argued that Sable has a track record of blatant defiance with the California Coastal Commission, digging up old pipelines buried deep underground to make repairs while disturbing environmentally sensitive habitats, many home to federally endangered species like the steelhead trout or tidewater goby — all without having secured the necessary permits first.
Sable has argued that the permits secured by Exxon in 1987 specifically exempt them from needing permits for making such repairs. After disregarding several direct cease-and-desist orders, Sable sued the Coastal Commission.
Kelsey Buttitta, spokesperson for Santa Barbara County, declined to comment, explaining the county does not comment on litigation. Environmentalists have suggested that Sable could proceed, somehow piggybacking on Exxon’s existing permits. If Exxon were to remain on the hook for any future ruptures and spills, they argued, the county would be better protected in the case of future disasters.
In the meantime, Sable is still running the regulatory gauntlet of multiple state agencies, not the least of which remains the Coastal Commission. In addition, the company has been sanctioned by the Central Coast Regional Water Quality Control Board for discharging waste into potentially flowing streams without having sought the necessary permits.
