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Exxon, Santa Barbara County settle oil transport suits

Jan. 13, 1997

Exxon Corp. and Santa Barbara County have agreed to settle lawsuits over the company's right to use tankers instead of pipelines. The agreement is narrow, however, allowing Exxon to use tankers only from San Francisco to Los Angeles for oil transported via pipeline from the Santa Barbara Channel, leaving open the key issue of local government control over oil transportation.

Exxon Corp. and Santa Barbara County have agreed to settle lawsuits over the company's right to use tankers instead of pipelines.

The agreement is narrow, however, allowing Exxon to use tankers only from San Francisco to Los Angeles for oil transported via pipeline from the Santa Barbara Channel, leaving open the key issue of local government control over oil transportation.

But that dispute will rise again soon, because the U.S. Minerals Management Service is proposing strategies "consistent with state and local transportation policies," according to John Garamendi, deputy secretary of the Department of the Interior.

"The Clinton Administration is fundamentally committed...to pursuing all possible options to ensure that offshore oil is conveyed by pipelines."

The Santa Barbara Board of Supervisors will conduct a hearing with MMS representatives on Jan. 21.

Settlement rationale

The board cited MMS' intention to support pipelines as a key reason why it settled with Exxon, rather than carry on appeals that could cost taxpayers much more than the $130,000 already spent by county attorneys.

Nor did either side back down from its basic arguments despite the agreement.

Exxon maintains that once its oil is piped outside of Santa Barbara County, it can transport it by any means anywhere, while the county cites policies that oil must leave by pipeline unless a hearing is held and an exception to use tankers granted.

When Exxon first revealed 2 years ago it would use tankers from San Francisco, the state Coastal Commission and MMS agreed Exxon was violating the county's permit, granted in 1987 to develop the Santa Ynez Unit, which began operation in 1993 (OGJ, May 1, 1995, p. 46).

But the state and federal agencies later relented, allowing Exxon as many as three tanker trips per month.

The county sued Exxon, and in May a U.S. District Court sided with Exxon, which in turn sued the county to recover $650,000 in attorney's fees (OGJ, June 3, 1996, Newsletter). Appeals were pending until this month's settlement.