Exxon Mobil Halting 3 Oil Platforms After Pipeline Spill

By Brian Melley, June 24, 2015, Associated Pressoil containment boom

Exxon Mobil Corp. has been forced to halt operations at three offshore oil platforms because it couldn’t deliver to refineries in the wake of a broken pipeline that spilled up to 101,000 gallons of crude on the Santa Barbara coast, the company said.

Operations temporarily ceased last week because Santa Barbara County rejected its emergency application to truck oil to refineries, spokesman Richard Keil said Tuesday.

A Santa Barbara County official said the company’s problem did not constitute an emergency and it could go through the normal procedure, which requires extensive environmental review, to get a permit to truck the oil.

The shutdown is not expected to have an effect on oil prices, but it does harm Exxon Mobil’s bottom line even though production from the platforms is small compared with the company’s overall output, said Tom Kloza, global head of energy at the Oil Price Information Service.

Crude was selling last week for $60 to $64 a barrel and could fetch more than $91 when refined for automobile gas, he said. That provided a lot of incentive for Exxon Mobil.

“I’m sure it’s a royal pain for them,” Kloza said. “Given the profit margins for gasoline, whether you have to (deliver) it by wheelbarrow or rickshaw, you’re very motivated.”

Exxon Mobil had cut production from the rigs by two-thirds after Plains All American Pipeline’s conduit was shut down by a May 19 spill that soiled pristine coastline and spread tar balls as far as Los Angeles County, about 100 miles away. Nearly 200 birds and more than 100 marine mammals have been found dead in the waters.

Federal regulators investigating the cause of the spill have revealed the 2-foot-wide pipe was severely corroded where it ruptured but have not issued any findings or penalties.

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