Exxon shuts down oil production as Santa Barbara cleans up spill
Exxon Mobil Corp. has shut down production at three offshore oil platforms until it can come up with a way to resume transportation of the crude that was interrupted last month by a pipeline break that fouled a stretch of the Pacific coast of California鈥檚 Santa Barbara County.
Until the pipeline is repaired, , each with a capacity of 6,720 gallons, to make up to 192 trips per day to transport the oil to from a company facility near the Pacific coast to several destinations, including an oil refinery in San Luis Obispo County, about 70 miles to the north.
Exxon had filed an emergency application with the county to bring the trucks into service, but Dianne Black, the assistant director of planning and development for Santa Barbara County, rejected the effort, saying the situation wasn鈥檛 an emergency. Instead, she said the company must go through normal channels, which include a long environmental study, to obtain a permit to move the oil by truck. ()
Because the oil cannot move, Exxon was forced to last week, company spokesman Richard Keil said June 23.
Tom Kloza, the global director of energy at the Oil Price Information Service, said the rigs鈥� shutdown shouldn鈥檛 affect retail fuel prices in Southern California, but it will take a modest financial toll on Exxon. He noted that crude oil was selling last week for up to $64 per barrel, but the price could exceed $90 by the time it鈥檚 refined for gasoline, meaning Exxon could lose money until the pipeline is repaired. ()
鈥淚鈥檓 sure it鈥檚 a royal pain for them,鈥� Kloza told The Associated Press. 鈥淕iven the profit margins for gasoline, whether you have to [deliver] it by wheelbarrow or rickshaw, you鈥檙e very motivated.鈥�
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Still, production at the three platforms is , a very small proportion of the 1.7 million barrels per day of crude needed by California.
On May 19, a badly corroded conduit owned by Plains All American Pipeline of Houston breached, spilling an estimated 100,000 gallons of oil that fouled a stretch of the scenic Santa Barbara coastline and created tarballs that reached as far as Los Angeles County about 100 miles away. The spill also is being held responsible for the deaths of more than 100 marine mammals and almost 200 birds. ()
Soon after the spill, Exxon already had reduced production from the three platforms by nearly two-thirds and began storing the crude they did produce in large tanks. But those facilities 鈥渁re filled up right now,鈥� , the director of the county鈥檚 energy division.
Exxon鈥檚 three platforms aren鈥檛 the only rigs that have suspended work. Four other platforms owned by two other companies also have been forced to halt nearby operations. A platform owned by Venoco Inc. shut down just a few days after the pipeline spill, and three platforms owned by Freeport-McMoRan also have suspended operations for the past several weeks.
By Andy Tully Of Oilprice.com
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