Oil demand, climate change clash in pipeline plan

LOS ANGELES (AP) — A proposal to replace an oil pipeline that was shut down, in 2015, after causing California’s worst coastal spill in 25 years is inching though a government review, even as the state moves toward banning gas-powered vehicles and oil drilling.

Consideration of the $300 million proposal by Houston-based Plains All American Pipeline is expected to enter a critical phase next year at a time when new scrutiny is being placed on the state’s oil industry after an offshore pipeline break, in October, near Huntington Beach. That rupture released at least 25,000 gallons of crude that closed beaches and took a deadly toll on sea life along one of the world’s fabled surf breaks.

Farther north, the 123-mile Plains pipeline travels along the coastline near Santa Barbara before turning inland. It’s buried and nearly invisible for much of its length to Kern County. For decades it was a vital link between oil platforms off the coast and processing plants on shore, with shipments averaging 1.8 million gallons a day.

California Democratic US Sen. Alex Padilla opposes the proposal, bluntly warning of future risks.

“We’ve seen time and time again how damaging offshore oil spills are to our coastal ecosystems as well as to our outdoor recreation and tourism economies,” Padilla said in a statement. “We should not risk repeating history by rebuilding or restarting the Plains pipeline.”

Plains spokesman Brad Leone said the company safely transported 90 billion gallons last year throughout North America. “Plains is committed to designing, constructing and maintaining these lines in a safe, reliable manner,” he said.

The project faces numerous hurdles, including a federal class-action lawsuit from property owners who say Plains lacks the right to use existing easements for a new pipeline. Lead trial counsel Barry Cappello said the project would rip up vineyards and coastal ranches and “our clients never signed up for that.”

Shon Hiatt, an associate professor at the University of Southern California’s Marshall School of Business, said the company’s motivation to revive the pipeline is obvious.

He said the cost of a barrel of oil could top $100 next year. It’s about $77 now.

Documents filed by Plains with Santa Barbara County say the replaced pipeline, though smaller than its predecessor, could move up to nearly 1.7 million gallons a day. At current prices, that much oil would be valued at more than $3 million daily, or potentially over $1 billion a year, though pipelines often do not run at full capacity.