Exxon loses bid to overturn denial of oil trucking permit in California

LOS ANGELES (CN) — ExxonMobil lost its attempt to have a federal judge overturn Santa Barbara County's denial of a permit to truck more than 11,000 barrels of oil a day over narrow Central Coast roads.

U.S. District Judge Dolly Gee in Los Angeles took the matter on submission without issuing a final ruling at a hearing Friday on dueling motions for summary judgment by Exxon, Santa Barbara, and environmental advocates that intervened in the case.

The judge's tentative ruling was that the county's decision was based on substantive enough evidence to overcome Exxon's challenge. Specifically, the judge rejected the oil company's argument that the county's decision was based on anecdotal evidence of the risks of tanker trucks navigating State Route 166, a narrow two-lane highway connecting California's Central Coast to the Southern San Joaquin Valley.

Exxon had to shut down its three offshore platforms in the Santa Barbara channel in 2015, after a pipeline that carried the processed oil from an onshore facility to refineries inland ruptured and released 142,000 gallons of oil onto the beach and into the ocean.

The company in 2017 sought to modify the permit under which it operates its Santa Ynez facilities so that it can truck the crude oil from the processing facility to refineries for as long as seven years or until a new pipeline had been constructed. The Santa Barbara County Board of Supervisors denied the request in a 3-2 vote in 2022 because of the risk of oil spills from truck accidents, as happened as recently as 2020 on Route 166.

"This is not a case where evidence in the record indicates that Exxon will be driven out of the oil business because it cannot transport oil by truck, but must wait for a pipeline," the county said in its request to end the company's legal challenge. "The board’s decision did not change Exxon’s circumstances and did not involve a fundamental vested right."

Exxon sued last year, claiming that the county board of supervisors denied the modified permit for reasons that had nothing to do with the merits of its request. Rather than focusing on whether the plan to transport oil by tanker trucks complied with federal, state and local law, Exxon claims, the county treated it as a referendum on offshore oil production.

At Friday's hearing, Exxon's lawyer Dawn Sestito argued that the county board ignored expert reports on the safety of trucking oil, as well as numerous factors that mitigated the risks of oil spills from shipping it by truck, such as the use of experienced and well-trained drivers, the use of recent model trucks equipped with up-to-date safety features, and remote tracking of the trucks to make sure they complied with safety rules.

"If Santa Barbara wants to say that no trucking of oil will be allowed in the county, they can't do it in a piecemeal fashion," Sestito said.

Mary Barry, an attorney for Santa Barbara County, argued that the risk-mitigating factors Exxon cited only addressed part of the problem because many accidents involving tanker trucks are caused by other vehicles. The 2020 accident with a tanker truck on Route 166, which spilled over 4,500 gallons of crude oil into the Cuyama River, was caused by another car crashing into the tanker truck, Barry said.

Sestito retorted that by that reasoning no project would ever be approved because there would always be a risk of an accident. The point, she said, was to reduce the possibility of an oil spill resulting from an accidents, and this is where Exxon's risk-mitigation efforts would be crucial.

The May 19, 2015, rupture of the pipeline causes thousands of gallons of crude oil flowed into the Pacific Ocean along the Gaviota Coast north of Santa Barbara. The ruptured pipeline, owned by Texas-based Plains All American Pipeline, spewed oil through a storm drain under Highway 101 and into the ocean for several hours.

The disaster forced the closure of multiple state marine conservation areas and public beaches as well as fishing and shellfish businesses.

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