ExxonMobil loses bid to truck millions of gallons of crude oil through central California

AP Finance
Wed, September 27, 2023 

SANTA BARBARA, Calif. (AP) — ExxonMobil lost a court bid Wednesday to truck millions of gallons of crude oil through central California — a crucial part of its efforts to restart offshore oil wells that were shut in 2015 after a pipeline leak caused the worst coastal spill in 25 years.

A federal judge refused to overturn a 2022 decision by the Santa Barbara County Board Supervisors that denied ExxonMobil's request to use trucks to carry crude from the three wells.

A request for comment from ExxonMobil about the decision wasn’t immediately returned.

The pipeline was shut down on May 19, 2015, when a corroded section above ground and running west of Santa Barbara ruptured, sending 140,000 gallons (529,958 liters) of oil onto a state beach and into the ocean.

Three decades-old drilling platforms were shuttered in the wake of the disaster.

ExxonMobil proposed sending up to 24,820 tanker trucks a year on coastal Highway 101 and and State Route 166 for up to seven years, arguing that was the only option for getting the oil from the offshore wells to onshore processing plants until a pipeline becomes available.

But county supervisors voted against issuing a permit amid concerns over the effect on local traffic and the potential for spills and accidents.

Environmental groups praised the court decision.

“ExxonMobil’s plan to restart its offshore platforms and truck millions of gallons per week through Santa Barbara County is reckless, dangerous, and totally unwelcome by this community,” said Linda Krop, chief counsel of the Environmental Defense Center, which represents four activist groups. "Today’s decision puts the safety of our communities, climate, and coastlines first.”

Meanwhile, a separate proposal to replace the pipeline remains under review by regulators.

California's oil and gas industry supports hundreds of thousands of jobs. But with climate change expanding the threat of wildfires and drought, the state has positioned itself as a global leader in renewable energy and pioneering policies intended to slow the planet’s warming. California plans to ban the sale of new gas-powered cars and trucks by 2035 and end oil production a decade later.

US judge refuses to overturn Exxon permit denial to truck crude oil in California

Clark Mindock
Wed, September 27, 2023 

A gas station is seen out of gas in Washington

(Reuters) - A U.S. judge on Wednesday refused to overturn a California county's decision to block Exxon Mobil Corp from using tanker trucks to ship crude oil from coastal facilities to inland refineries while a ruptured pipeline is fixed.

U.S. District Judge Dolly Gee in Los Angeles denied Exxon's bid to reverse the Santa Barbara County Board of Supervisors' denial of a trucking permit in early 2022, saying the board's decision was substantially supported by evidence that transporting crude oil by tanker trucks could present safety concerns on state highways.

Gee ruled that while Exxon has a right to operate its offshore oil platforms and related infrastructure in the area, it does not have a vested or fundamental right to use trucks to transport its crude while the pipeline system is fixed.

Exxon has claimed it needs to use dozens of tanker trucks a day to ship oil through Santa Barbara County until a pipeline that burst near Santa Barbara in 2015, creating one of the worst oil spills in the region in decades, can be replaced. The company has said trucks are "essential" to restarting three offshore oil platforms and an onshore oil processing facility that have been shuttered since the spill.

Representatives for Exxon and the county did not immediately respond to requests for comment.

Gee's decision did not address Exxon's claims that the board's decision amounted to an unconstitutional taking of the company's property and other constitutional claims. Those claims are set to be considered next by the court.

The decision was applauded by environmental groups that had intervened in the lawsuit supporting the county's decision, including the Sierra Club and local organizations.

Attorney Linda Kropp, who represented several of those groups, said Exxon's trucking plan is "reckless, dangerous and totally unwelcome" and said it puts the community at risk of oil tanker crashes.

Exxon had sued in May 2022, alleging the board's denial was a "prejudicial abuse of discretion." It said the board's majority had essentially made up its mind to reject the application rather than deciding the issue on its merits, resulting in a "de facto ban on crude oil production and transportation."

The company also claimed it has a right to restart the oil production since it had invested significant resources in the area since the 1970s.

When Exxon first halted offshore production from its three Santa Barbara-area platforms, output from those rigs was estimated at 30,000 barrels a day (bpd), a fraction of California's daily crude diet of some 1.7 million bpd at the time.

(Reporting by Clark Mindock, Editing by Alexia Garamfalvi and Chris Reese)


Exxon Barred From Trucking Oil From California Offshore Platform

Joe Schneider
Wed, September 27, 2023 

(Bloomberg) -- Exxon Mobil Corp. won’t be able to revive oil platforms off the California coast by relying on trucks to ship crude to refineries on shore.

Three offshore platforms, known as Exxon Mobil’s Santa Ynez Unit, have been shut down since 2015 when a pipeline ruptured and created the worst coastal oil spill in the state in 25 years.

Exxon Mobil figures it’ll probably take five more years to repair or replace the pipeline. The company estimates it spends tens of million of dollars to maintain the facilities and pays $1 million annually in taxes while SYU is shut down.

US District Judge Dolly M. Gee in Los Angeles on Wednesday denied Exxon Mobil’s request to overturn a 3-2 decision by the Santa Barbara County Board of Supervisors to reject the oil company’s trucking plan in 2022. The judge said while Exxon Mobil has every right to operate its offshore oil platforms, it doesn’t have a right to truck the crude.

“The Board’s decision in this case does not permanently implicate Exxon’s vested right to use its SYU facilities, but only halts its proposed ‘restart’ which itself was a temporary fix to a bigger problem: the lack of viable pipeline transport,” Gee wrote. “That is a problem not caused by the Board’s decision.”

Exxon Mobil didn’t immediately respond to a request for comment.

“It’s time for Exxon to accept that the community won’t support drilling and transporting oil in their backyard,” Liz Jones of the Center for Biological Diversity said in a statement. “The costs of oil spills are too high to risk, and this decision is a well-deserved win for the community, ocean life and ecosystems.”

The oil company claimed the board was improperly using the Exxon Mobil project as a referendum on offshore production. Board Chair Joan Hartmann cited the current climate crisis for her decision to vote against the plan.

Exxon Mobil proposed sending almost 25,000 tanker trucks a year on coastal Highway 101 and State Route 166 for as long as seven years, or until the pipeline is repaired or replaced.

The judge found there is “substantial evidence” to support the board’s decision to deny the project because of the safety issues the trucks would create along Route 166.

The judge also rejected Exxon Mobil’s claim that the county supervisors’ opposition to oil production caused them to act improperly.

“It is undeniable that there are comments in the record — both by the public and some planning commission members and county supervisors — that reflect a desire to end oil production in Santa Barbara County altogether,” Gee wrote. “But their expression of these concerns does not mean they acted contrary to law.”

The case is Exxon Mobil Corp. v. Santa Barbara County Board of Supervisors, 2:22-cv-03225, U.S. District Court, Central District of California.

 Bloomberg Businessweek