Santa Barbara has already lived through two major oil spill disasters — the 1969 blowout and the 2015 Refugio spill. When offshore oil operators cause major spills, they often avoid paying the full cost of the damage.
Union Oil ultimately paid only $14 million for the 1969 blowout — about $4.5 million in cleanup costs and $9.5 million to the state and county — while the long-term environmental and economic losses have been widely estimated in the hundreds of millions (over $1 billion in today’s dollars). Since that blowout, many operators in the industry have fought claims or used bankruptcy proceedings to limit their financial exposure.
The Defense Production Act order recently issued by the federal government does not replace the Bureau of Ocean Energy Management’s financial assurance requirements, yet there is no publicly available evidence in BOEM’s own records that Sable has posted a spill-response bond or any other financial guarantee. If such a bond exists, where is it documented and in what amount?
If production restarts using aging, corroded infrastructure, the risk of a serious accident remains. Even a brand-new or fully repaired pipeline can fail. Without a cleanup bond, past experience shows that spills leave the public paying most of the costs.
