California oil spill could turn public against offshore drilling
California oil spill, the third major spill in as many months, could galvanize public support for the Biden administration’s climate-related efforts to curb offshore drilling, analysts say, a move that would have profound implications for the Gulf Coast economy.
Houston-based Amplify Energy on Monday said it is responding to a 13-mile oil spill off the coast of Southern California, which closed popular beaches, fisheries and the Huntington Beach air show over the weeklines end. Officials said they are still investigating the cause of the leak, but the Wall Street Journal reported that the suspected cause could be an anchor strike on an offshore oil pipeline operated by Amplify subsidiary Beta Offshore.
“The company has sent a remotely operated vehicle to investigate and attempt to confirm the source of the release,” Amplify said Monday in a statement online. “As a precautionary measure, all of the company’s production and pipeline operations at the Beta Field have been shut down.”
It’s the latest in a string of oil spills that have dominated headA over the past several months. In July, Mexican state oil company Pemex responded to an underwater gas leak from one of its platforms off the Yucatán Peninsula. It took boat crews more than five hours to extinguish the ring of fire in the Gulf of Mexico.
Last month, Houston-based Talos Energy responded to an oil leak from a broken offshore pipeline found a couple of miles south of Port Fouchon, La., in the aftermath of Hurricane Ida. The offshore oil company said the broken pipeline was not owned by Talos but was likely left abandoned by a previous leaseholder.
Luke Metzger, executive director of Environment Texas, said that while these spills captured the biggest headlines, there are many smaller oil spills that still harm marine life and coastal ecosystems. Environmental groups, such as Environment Texas, said these spills are all the more reason to stop offshore oil and gas production.
“These high-profile spills just really highlight how damaging offshore drilling can be to these places that are just so important ecologically,” Metzger said. “These kinds of incidents like in California should provide further evidence and public sup
port for getting off of offshore oil.”
Oil spills historically have a powerful influence in galvanizing public opposition to oil and gas operations. The Exxon Valdez oil spill in 1989 and the deadly Deepwater Horizon explosion in 2010 led to widespread public outcry and increased regulations of the offshore industry.
In California, state lawmakers restricted offshore drilling in state waters after a massive 1969 oil spill near Santa Barbara dumped 80,000 barrels of oil into the Pacific Ocean. The state, known for its environmental legislation, is looking to ban hydraulic fracturing by 2024 and end oil drilling in the state by 2045.
Nationally, the Biden administration temporarily banned new oil and gas leases on federal lands and waters, part of its broader effort to avoid the worst consequences of climate change. The federal government is also weighing doubling federal royalties that offshore producers pay to 25 percent and could set a new federal oil and gas lease schedule in 2022 that would severely limit offshore drilling.
“Regulatory oversight has been weakened during the Trump administration, which undid safety policies implemented after Deepwater Horizon,” Metzger said. “Now the Biden administration is having to undo the damages the Trump administration did to offshore protections.”
The offshore industry has pushed back against these measures, arguing that offshore drilling in the Gulf of Mexico supports more than 345,000 direct and indirect jobs across the country. Before Hurricane Ida disrupted the offshore industry, the U.S. Gulf of Mexico produced 1.8 million barrels of oil per day, about 17 percent of the nation’s oil production and second only to shale production in Texas.
The offshore sector has improved its worker safety and environmental performance over the past decade since Deepwater Horizon, said Erik Milito, president of the National Ocean Industries Association.
Milito said offshore oil producers invest in remote sensors, subsea containment systems and worker training to help prevent oil spills. In 2019, there were 12,489 federal inspections of offshore drilling rigs and platforms, a 43 percent increase compared with 2016. Despite recent oil busts, offshore producers remain committed to safety standards, Milito said.
“The industry is never satisfied, we always want to do better,” Milito said. “Offshore energy workers live, work and recreate all in the same areas and want to protect each other and the environment.”
Many oil majors, including European giants such as BP and Royal Dutch Shell, have doubled down on Gulf oil projects. Oil giants argue that expensive offshore projects can produce oil profitably for decades with lower greenhouse gas emissions than their onshore counterparts in shale fields.
An S&P Global Platts analysis released this month found that a barrel of oil from the Mars oil field in the Gulf of Mexico has about half the carbon emissions of a barrel of oil from the Permian Basin in West Texas.
Still, oil spills remain a risk with offshore drilling. Leaks from offshore pipelines and production platforms can spread quickly and widely across water, damaging wildlife and disrupting fishing
and tourism industries.
Off the coast of California, officials said, crews on more than a dozen boats are working 24 hours a day to clean up the spill. So far, about 3,150 gallons of oil have been recovered, and officials have deployed 5,360 feet of floating barriers to try to contain the spill.
The oil spill is suspected to be leaking from a 17.5-mile pipeline that runs from a platform to an onshore pump station at the Port of Long Beach.
Amplify Energy, a Houston company that merged with Oklahoma’s Midstates Petroleum in 2019, operates in California waters through its Beta Offshore subsidiary, one of the largest oil producers in Southern California. It controls 16.7 million barrels of oil reserves in a field 12 miles south of Long Beach.
All of Beta’s platforms were installed off the California coast in the 1980s. Since then, Beta has been cited 125 times for safety and environmental violations, and it was fined $85,000 for three incidents since 2013, according to the Bureau of Safety and Environmental Enforcement.
While most of the recent incidents involved safety violations, the bureau found that the company released crude oil through a flare boom in December 2014. An investigation found a safety device was bypassed and maintenance and testing were not properly monitored, leading to a $30,000 fine.
Amplify Energy stock plunged 44 percent to $3.23 on Monday, down $2.52 from Friday.