LOS ANGELES — Three Texas companies agreed Friday to plead guilty to federal environmental charges and pay nearly $13 million in connection with the crude oil spill that fouled Southern California’s coastline last fall.
Houston-based Amplify Energy Co. and two of its subsidiaries agreed to plead guilty to violating the Clean Water Act by negligently discharging oil into the waters off Huntington Beach on Oct. 1 and Oct. 2, according to plea agreements entered in federal court Friday.
The companies have agreed to pay a $7.1 million criminal fine and reimburse federal agencies for an estimated $5.8 million spent responding to the pipeline leak, which sent 25,000 gallons of crude gushing into San Pedro Bay.
“This oil spill affected numerous people, businesses and organizations who use the Southern California coastal waters,” said Acting U.S. Attorney Stephanie Christensen in a prepared statement. “The companies involved are now accepting their responsibility for criminal conduct and are required to make significant improvements that will help prevent future oil spills.”
Amplify Energy and its two subsidiaries — Beta Operating Co. and San Pedro Bay Pipeline Co. — also have agreed to a four-year probationary period during which they will be subject to stricter regulatory scrutiny, according to the plea agreements.
“We believe this resolution, which is subject to court review and approval, reflects the commitments we made immediately following the incident to impacted parties and is in the best interest of Amplify and its stakeholders,” said Martyn Willsher, Amplify’s president and chief executive. “We are committed to safely operating in a way that ensures the protection of the environment and the surrounding communities.”
The firms would be required to install a new leak detection system in the 17.3-mile pipeline, notify regulators of every leak detection alarm from the pipeline, and contract with a group that can detect oil on the surface of the water at night or in low-light conditions.
“It sends a message to all of the coastal oil companies that this administration is taking this issue very seriously and the Justice Department will prosecute,” said Orange County Supervisor Katrina Foley. “These companies have to be responsible because we cannot continue to allow this kind of damage to our natural resources and our economic resources.”
Representatives for the three firms are expected to appear in federal court in Santa Ana in “the near future” to formally enter their guilty pleas, the U.S. attorney’s office said in a statement.
If U.S. District Judge David O. Carter does not accept the terms of the plea agreement, any of the parties could withdraw and the case would go to trial, the U.S. attorney’s office said.
Amplify Energy and its subsidiaries were indicted by a federal grand jury in December. The three-page page document said the underwater pipeline, which runs between a production and processing platform and the Port of Long Beach, was being operated by “an understaffed and fatigued crew” that “had not been provided sufficient training regarding the pipeline’s automated leak detection system.”
The indictment described a scene of confusion and disarray that began Oct. 1, as crews on the offshore oil platform attempted to keep oil flowing through the pipeline and tried to deal with a series of alarms from the rig’s leak detection system. Those alarms began nearly 16 hours before the time that Amplify Energy’s chief executive said the company was aware of a leak, the indictment said.
The oil spill required more than a week of cleanup, disrupted activity along the coast and forced the cancellation of the Pacific Airshow in Huntington Beach, one of the city’s most popular annual events.
“This is a stunning announcement,” Huntington Beach Councilwoman Kim Carr said of the plea. “When the spill happened, you just had this sense that (Amplify) knew what they did was wrong and they knew they made substantial errors, but they weren’t willing to admit it. We had to pay the price.”
Carr, who is running for State Senate and has spoken in support of decommissioning offshore oil rigs, said the spill was devastating for hotels, small business and individuals who make a living on the water.
“This situation clearly demonstrates how we need to make sure these companies are held accountable and that people in Sacramento are not just paying lip service when it comes to accountability,” she said. “They need to take steps to make sure this never happens again.”
On Thursday, Amplify tentatively agreed to settle more than a dozen lawsuits brought by business owners and residents, including Laguna Beach coastal property owners, a Huntington Beach surf school, a Seal Beach bait and tackle store, and several groups of fishing and seafood sales companies. The terms of the settlement have not been disclosed and still need to be approved by the court.
Willsher, Amplify’s chief executive, said the firm is still “vigorously” pursuing a lawsuit against the companies that own and operate two container ships that have been accused of dragging their anchors across the sea floor and damaging the pipeline, months before the oil spill.
