Commissioners:
Malia M. Cohen, California State Controller, Chair
Eleni Kounalakis, Lieutenant Governor, Member
Joe Stephenshaw, Director of the Department of Finance, Member
Media Contact:
Sheri Pemberton, Chief of External Affairs
916.477.0691 | Sheri.Pemberton@slc.ca.gov
For Immediate Release: November 12, 2024
The Settlement, the largest of its kind in the Commission’s history, is a decisive victory for California taxpayers.
SACRAMENTO – Today, the California State Lands Commission announced a groundbreaking settlement with Plains All American Pipeline LP, the entity responsible for the devastating 2015 Refugio Beach oil spill in Santa Barbara County.
The Commission and Aspen American Insurance Company sued Plains in 2018, alleging that Plains’ negligent maintenance of its pipeline unjustly shifted decommissioning liability to California taxpayers and terminated the state’s royalty income. Plains’ negligence also resulted in property damages to Platform Holly that required the Commission’s immediate attention to ensure public health and safety. The state will receive $50.5 million from the settlement.
“This settlement is a resounding victory that provides taxpayers with tens of millions of dollars,” said State Controller and Commission Chair Malia M. Cohen. “Throughout this process, the Commission has been a fierce advocate for California taxpayers and the environment. Because of our impassioned efforts and tenacity, we were able to secure this landmark settlement.”
After Line 901 ruptured, causing the 2015 Refugio Beach oil spill, Venoco could not transport its product to market. Two years later, Venoco declared bankruptcy and deserted its oil and gas operations in state waters, leaving the Commission responsible for capping 32 wells and decommissioning Platform Holly and related facilities. The Commission’s immediate priority at that time was to protect public health, safety, and the environment, and, at the same time, protect the state’s interests in the bankruptcy proceedings and fend off legal challenges. But the Commission went a step further: it sought compensation from Plains for its responsibility to California taxpayers. And, once again, the Commission prevailed.
“Today’s landmark settlement marks a resounding victory for California,” said Lieutenant Governor and State Lands Commissioner Eleni Kounalakis. “As Chair of the State Lands Commission, I have worked alongside my fellow commissioners to hold polluters accountable and push for a future free from catastrophic oil spills and environmental degradation. This outcome reflects years of relentless effort to demand justice, address the damage left by negligent operators, and reaffirm our commitment to protecting California’s coastline and natural resources. We remain steadfast in leading the charge towards a clean, sustainable energy future.”
“This settlement strikes a balance that both holds the operator accountable and provides appropriate compensation to the state for the fiscal damages caused by this spill,” said Commissioner and California Department of Finance Director Joe Stephenshaw.
The total settlement amount is $72.5 million, of which $22 million will go to Aspen American Insurance Company, the bonding company and co-plaintiff. Plains All American Pipeline, L.P., the company the Commission sued, was found criminally responsible for the 2015 Refugio Beach oil spill. Today’s settlement follows a victory last year when a federal district court in Delaware ruled in the Commission’s favor in litigation brought by the Venoco Trustee, finding that the Commission’s operation of the Ellwood Onshore Facility in Goleta averted harm to the public’s health and safety, protected the environment, and was a proper exercise of the Commission’s police powers.
About the State Lands Commission: The Commission, an independent entity comprised of the Lieutenant Governor, State Controller, and the Governor’s Director of Finance, manages over four million acres of land in California. In the past decade, the Commission has moved to the forefront of offshore oil and gas decommissioning and a clean energy future. The Commission recently approved the decommissioning project for Rincon Island offshore Ventura County and, having plugged and abandoned 30 wells on Platform Holly, is preparing to start the environmental review process to decommission the platform, one of four remaining oil and gas platforms in state waters. The Commission is also a trustee agency helping to administer a $22 million Natural Resources Damage Assessment settlement to protect and restore coastal resources damaged in the Refugio Beach spill.