New $72 Million Settlement Reached in Refugio Oil Spill Litigation

Ellwood Onshore Facility Sold to Bell Canyon Recreation in Venoco Bankruptcy

Michael Johnson of Bell Canyon Recreation LLC purchased the Ellwood Onshore Facility in January, hoping to repurpose the land to a glamping campsite. | Credit: Courtesy

A broken oil line on the Gaviota Coast in 2015 caused not only devastation in the ocean from the thousands of barrels of crude that spilled, but also a lengthy series of court cases, a bankruptcy, fines, and settlements resulting from the Refugio Oil Spill. Plains All American Pipeline, which owned the ruptured Line 901, just paid another $72.5 million in a settlement with the State Lands Commission toward the agency’s plugging and abandoning work at Platform Holly. That offshore oil rig had been owned by the bankrupted Venoco Inc., which quit-claimed its ownership and responsibility for Holly to State Lands, and began to sell its other assets. These included the Ellwood Onshore Facility in Goleta, which was sold earlier this year for a half-million dollars.

Plains All American, which a jury found guilty of criminal negligence for failing to maintain its Gaviota pipeline, paid a fine of $3.3 million. The company estimated its costs from the oil spill to be around $870 million, according to a report at Reuters, roughly $500 million or more of that in settlement costs. (A lawsuit between Venoco and Plains settled privately earlier this year, with speculation placing the sum in the hundreds of millions for a decade of lost revenue.) In 2022, Plains had net income of more than $1 billion. It sold Line 901 to an ExxonMobil subsidiary, which recently sold it to Sable Offshore, triggering its own round of lawsuits.

For State Lands, early estimates put the cost of shutting down Platform Holly’s 30 wells and two wells at Pier 142 at Haskell’s Beach at about $350 million. Venoco had a bond of $22 million — which the new settlement repaid to its insurer, Aspen American Insurance Company — leaving taxpayers with much of the bill. The final removal of the platform, however, is in ExxonMobil’s hands.

After production ceased at Holly, dribs and drabs of gas and oil from the platform’s wells drained to the Ellwood Onshore Facility, which was built in the early 1970s by Atlantic Richfield. State Lands kept the facility in operation before the bankruptcy trustee sold it to Bell Canyon Recreation, LLC, originally for $1 million which was renegotiated to a half-million dollars in January.

The Ellwood Onshore Facility, which once stored crude oil from Platform Holly, lies between the Bacara resort to the right, Sandpiper Golf to the left, and the Pacific Ocean in the distance. | Credit: Courtesy

The new owner is named for its location, Bell Canyon, said Michael Johnson, who formed a partnership with Tim Finnigan to buy and restore the 4.5-acre property. Johnson said he’d lived about two miles from the site since 1998, before moving to Santa Barbara in recent years.

Bell Canyon itself is named for the family of Katherine Den Bell, the eldest daughter of Nicholas Den, who owned all the land between Fairview Avenue and El Capitan Canyon before his death in 1862. Kate Bell is said to have pointed to a spot on her ocean-front acreage in 1920 and declared oil would be found there, which it was in 1928, two years after she died, kicking off the Ellwood oil field boom.

Seen offshore of Goleta’s Sandpiper Golf Club, Platform Holly is slated to be removed by ExxonMobil after an environmental report is finalized. | Credit: Courtesy

At Bell Canyon, all hydrocarbons had been removed from the Ellwood facility, said Johnson. All the pipes and tanks were “clean, rinsed, washed out,” he said. With a background in construction, he was well aware of the cleanup required, which carries estimated remediation costs of between $4 million and $20 million. “The first thing we did was test the groundwater,” Johnson said, “and it was significantly cleaner than previous tests.” They’ve hired the same contractors that State Lands had used for operations and environmental assessment, and Johnson counted about seven agencies, including the City of Goleta, that they’d be going through before beginning to plan for the site. What they have in mind is a glamping campsite, he said.

“It’s a delicate dance right now. It’s zoned active recreation, so there are certain things we can do. We named it Bell Canyon Recreation because we want to do a camping site, something that’s coastal dependent.”

As for Platform Holly, its wells were completely plugged and abandoned as of September. The next phase is completion of an environmental impact report for public comment, State Lands indicated. After that, the platform would be removed at ExxonMobil’s expense.

Correction: The net income for Plains All American Pipeline in 2022 was not more than a trillion dollars, but more than a billion.