The massive oil spill that accidentally dumped tens of thousands of gallons of crude oil in the waters off the Southern California coast in October 2021 may have been cleaned up and forgotten about by some, but the ramifications continue to be felt by shipping companies involved in the incident.
Case in point: on March 1, the oil pipeline’s owner, Texas-based Amplify Energy, said that it had reached a $96 million settlement with various parties over the spill.
The oil company has maintained that as a result of negligent conduct, an estimated 25,000 gallons of crude oil were discharged from a crack in the 16-inch pipeline about 4.7 miles offshore of the Orange County city of Huntington Beach.
Amplify has reached a settlement of its claims against the m/v Danit, which is operated by MSC Mediterranean Shipping Co., as well as the m/v Beijing, operated by COSCO Container Lines, plus the Marine Exchange of Southern California. The Danit, Beijing and their affiliated corporate entities have agreed to pay Amplify $96.5 million in connection with anchor strikes by containerships that damaged the pipeline.
The damage caused by the strikes are said to have led to what’s now known as the 2021 Southern California Pipeline Incident. The overall resolution includes Amplify ultimately receiving a net payment of about $85 million. The Marine Exchange, which monitors Southern California containership traffic, a has agreed to non-monetary terms in the settlement, according to Amplify.
The settlement resolves Amplify Energy’s claims related to the burst pipeline. As part of the settlement, Amplify has said that it will dismiss all of its legal claims against the various parties after payment is made.
“The resolution of Amplify’s claims against the vessels and their affiliated entities concludes our involvement in the litigation related to the 2021 pipeline incident,” Amplify’s President and Chief Executive Officer, Martyn Willsher, said in a statement. “We are eager to move forward and turn the page on this unfortunate and preventable event.”
The March settlement comes on the heels of a Feb. 9 agreement in which multiple shipping companies agreed to pay a total of $45 million to people and businesses, including commercial fishing operations, that suffered due to the pipeline leak.
The settlement, combined with a separate Amply Energy settlement in 2022, provides a total of nearly $100 million to class action lawsuit members whose businesses and property were harmed by the spill.
“It sends a clear message to large corporations operating off the coast of California that they will be held responsible for their negligence,” the class members’ legal counsel, Wylie Aitken, Lexi Hazam and Stephen Larson, said in a statement.
The shipping companies involved in the settlement have denied the allegations, but Amplify Energy settled the class action lawsuit for $50 million in October 2022.
Members of the class action suit alleged that container ships repeatedly crossed over and struck the Amplify Energy pipeline with their anchors on Jan. 25, 2021 during heavy weather and that the anchor strikes displaced the pipeline and damaged its concrete casing, leading to the pipeline’s failure nine months later.
Claims Resolved
The March settlement came less than a month after a Feb. 9 agreement in which multiple shipping companies agreed to pay a total of $45 million to people and businesses that suffered due to the oil pipeline leak, which occurred about 4.7 miles off the shore of the Orange County city of Huntington Beach.
The February settlement, combined with an Amply Energy agreement in 2022, provides a total of nearly $100 million to people whose businesses and property were harmed by the spill, including commercial fishers.
The spill forced a fisheries closure between Huntington Beach and Dana Point, an area stretching more than 30 miles. The closure, implemented by the California Department of Fish and Wildlife, prohibited the take of all fish and shellfish in that area.
The state’s Office of Environmental Health Hazard Assessment determined at the time that consuming fish in the affected region was likely a threat to public health.
In the following days, the closure area was expanded to include 650 square miles of marine waters and about 45 miles of shoreline, including all bays and harbors from Seal Beach to San Onofre State Beach.
The closure order was lifted weeks later on Nov. 30 after the office declared that there was no further risk to public health from seafood consumption in the affected area, and advised that fishing and consumption of seafood from the area could resume.
Managing Editor Mark Nero can be reached at mark@maritimepublishing.com