Plains All American Pipeline has filed paperwork to rebuild a pair of aging oil pipelines in the Tri-Counties, including a line that caused the worst oil spill in decades on the Central Coast.
Plains said on Aug. 16 that it has filed a plan with Santa Barbara County to rebuild Line 901, which broke in 2015, spilling thousands of gallons of oil into the Santa Barbara Channel. The project would also replace much longer Line 903, which connects Santa Barbara County installations to those in Kern County.
The main purpose of the estimated $300 million project is to allow offshore oil platforms owned by ExxonMobil and Freeport-McMoRan to resume operations. The platforms operate in federal waters and have had no way to ship oil since the 2015 accident.
The permitting process could take longer than construction, which is expected to take just 18 months, said Plains spokeswoman Karen Rugaard. She said Plains may seek partners for the replacement pipelines, which will follow the route of the existing pipelines except for a bypass around Buellton.
Filings in San Luis Obispo County, Kern County and with federal agencies are expected to follow. More than 70 miles of Line 903, a roughly 130-mile pipeline, runs through Santa Barbara County.
The project will create between 400 and 600 construction jobs and 10 permanent positions, Rugaard said.
In addition to environmental damage and dealing a short-term blow to the region’s tourism industry, the closing of the pipelines dealt a mortal blow to independent oil firm Venoco. The company shuttered its Platform Holly operation, put the rest of its assets up for sale in bankruptcy and has agreed to turn the property over to a state agency. A UC Santa Barbara study is exploring options for the future of Platform Holly.
The Refugio oil spill triggered a series of lawsuits against Plains All American. The company didn’t comment on the status of the litigation on Aug. 16.
News of the pipelines being rebuilt comes as Plains All American is facing some financial headwinds and its stock has fallen 23.6 percent since it announced earnings on Aug. 7.
While the company reported sharply higher net income of $188 million for its second quarter ended June 30, the shares fell as the company adjusted earnings projections downward and also curbed capital expenditures.
Maintenance costs remained relatively steady at $210 million, and it reported $12 million in expenses during the quarter related to specifically to the Line 901 incident.
Plains has $3.5 billion in current assets with $3.76 billion in current liabilities, down more than 17 percent year-to-date. It has been selling assets as part of a plan to retain its investment-grade credit rating.