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Oil company hit with negligence charge in Huntington Beach pipeline leak

Amplify and two subsidiaries face five years of probation and up to $1 million in fines if convicted.

(CN) — A federal grand jury indicted Amplify Energy and two of its subsidiaries Wednesday on one count of negligence over its response to a rupture in its oil pipeline this past October less than five miles off the coast of Orange County.

The U.S. Coast Guard has said the 16-inch pipeline, which ran from several offshore oil rigs to a processing plant in Long Beach, was damaged by a 1,200-foot cargo ship dragging its anchor in rough seas. However, the pipeline did not tear until months later.

According to the indictment, the publicly traded, Houston-based Amplify Energy failed to respond to eight alarms from an automated leak detection system, starting at 4:10 pm on Oct. 1 and continuing for more than 13 hours. The pipeline was stopped and restarted numerous times that day and throughout the night. It continued to pump oil as workers conducted a manual leak detection test. The indictment calls the crew "understaffed and fatigued" and says they "had not been provided sufficient training."

"As a result of the allegedly negligent conduct, what is estimated to be about 25,000 gallons of crude oil were discharged from a point approximately 4.7 miles west of Huntington Beach," the Justice Department said in a statement.

According to the UC Davis Oiled Wildlife Care Network, the spill killed 82 birds and six mammals, including a bottlenose dolphin and three sea lions. Authorities closed the waters in the area to fishing for nearly two months.

In a written statement, an Amplify Energy spokesperson said the crew believed the leak detection system had emitted a false alarm.

"Following each alarm, the crews investigated various components of the platform and the pipeline’s instrumentalities to determine what could be contributing to what were thought to be false alarms," the company said in its statement. "The pipeline’s leak detection system was not functioning as designed, but was repeatedly and wrongly signaling a potential leak at the platform.. where no leak was actually occurring."

The leak occurred four miles from where the detection system showed it was, the company said..

"Had the crew known there was an actual oil spill in the water, they would have shut down the pipeline immediately," the company said.

If convicted, Amplify faces up to five years of probation and up to $1 million in fines.

The company also faces more than a dozen lawsuits by local businesses and homeowners claiming damages from the oil spill.

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