County cracks down on Greka

BY COLBY FRAZIER
DAILY SOUND STAFF WRITER

For the past month, the majority of the Santa Barbara County Board of Supervisors has vowed to crack down on the oil spill-plagued Greka Energy company and yesterday, after a four-hour public hearing, they did.

With unanimous praise, the board approved five recommendations from county staff that will have the cumulative impact of ratcheting down not only on Greka, which according to a county report has spilled 500,000 gallons of crude oil onto local ground since 2003, but other energy companies operating in the county as well.
“I think the recommendations put forth are comprehensive,” said First District Supervisor Salud Carbajal, the board’s chair. “We’re going to be making sure that what’s been happening won’t be happening any more.”
In the past two months alone at least five spills at Greka facilities have spewed a combined 158,000 gallons of crude oil and likely much more polluted produced water onto local soil.
The two largest incidents, one on Dec. 7 near Santa Maria that spilled 67,000 gallons of crude oil, and the other on Jan. 5 at the Firestone Vineyard near Los Olivos that resulted in 84,000 gallons of spillage, both flowed down seasonal creek beds. Both of the Greka facilities involved in these two spills remain closed.
While the Greka spills have generated voluminous discussion by local and state officials about possible solutions, Greka representatives have insisted the company has done little or nothing wrong. That sentiment continued yesterday during a 25-minute presentation by Robert C. O’Brien, a Los Angeles based attorney representing Greka, who called county staff’s presentation to the board “misleading.”
In the defense of his client, O’Brien painted a picture of an oil company that has been unfairly singled out by political officials and has become the target of wide-scale sabotage and eco-terrorism.
“We agree with the board that these spills should have never happened and it is now clear that they would have not happened but for intentional human conduct,” O’Brien told the board before a standing-room only crowd, parts of which scoffed at the remark. “What we’ve found is compelling evidence with respect to the spills that took place in December and January of sabotage.”
O’Brien said Tom Parker, a former FBI investigator who was hired by Greka on Jan. 6, the day after the largest spill, has linked the cause of the two spills to sabotage.
He said a series of mysterious events occurred in the days leading up to the Jan. 5 spill, such as cut wires that were left exposed to the elements and valves that were unexplainably opened. He said the majority of these issues were discovered and remedied before a spill, or other damage could occur.
Before the Dec. 7 incident, O’Brien said the injection pump and alarm systems that failed and were the cause of the spill, were tested the day before and immediately after and found to be in operating condition.
He said the majority of the incidents of alleged vandalism occurred after Nava began criticizing Greka. And though O’Brien referred to Nava in nearly every reference he made to sabotage during his presentation yesterday, he said he does not believe Nava had anything to do with it.
“We think that someone took advantage of the publicity surrounding the [Nava] hearing to engage in these acts,” O’Brien said.
He said Parker’s findings have been passed onto the FBI and Santa Barbara County Sheriff’s Department.
But the most recent spills, whether the result of sabotage or simple lack of care and oversight on behalf of Greka, are a small part of that company’s nine-year history here.
A county report compiled by multiple regulatory agencies that was presented to the board yesterday showed that Greka is responsible for 82.3 percent of all oilfield releases within the county since 2003. Eleven other energy companies share the remaining 18 percent.
The report shows Greka has spilled 10,767 barrels of crude oil since 2003, while Sierra Resources, another energy company operating in the county, has spilled 400 barrels – the second highest total.
Since it began accumulating local oil and gas facilities in 1999, the County Fire Department has made 400 emergency responses to Greka facilities at a cost to taxpayers of $450 per hour. On top of that, the County Air Pollution Control District has cited Greka more than 300 times for various air pollution violations.
With these numbers on his mind, Carbajal said to O’Brien, “You can talk about sabotage and we’re interested in hearing about what you have to say, but the fact of the matter is what about the other 398 spills? Were those sabotage too?”
O’Brien never fully answered that question, but said it was a good one.
Greka hasn’t shied away from paying millions in fines as a result of these citations and emergency responses.
Since 1999, the county report showed Greka has paid $1.3 million in penalties to the EPA, $545,691 to the Air Pollution Control District, $199,366 to the County Fire Department and $7,750 to the Dept. of Conservation, Division of Oil & Gas.
So why has Greka spilled thousands of gallons more than anyone else? According to Robert Wise, an on-scene coordinator for the EPA who has been overseeing the cleanup of the most recent spills, it’s a matter of simple maintenance.
“This spill that’s going on right now could have been easily prevented,” Wise said, noting that a Greka employee should have been monitoring the site when the spill occurred. “It also comes down to just plain old maintenance. The maintenance was not up to where it should have been.”
Just two hours before yesterday’s meeting, Wise said he discovered another spill at a Greka facility.
While only the largest spills are reported to the media, the report showed that Greka has racked up seven spills since Dec. 20, not including the 84,000 gallon spill on Jan. 5, which came one day after a public hearing that looked into Greka’s history. That meeting was hosted by Assemblyman Pedro Nava, who has been an outspoken critic of Greka since touring the site of the Dec. 7 spill. These seven incidents have resulted in an additional 226 gallons of spilled crude oil.
Gregory C. Brown, executive vice president and general legal counsel for BreitBurn Management Company, LLC, which he said is the largest crude oil producer in Santa Barbara County and has far less problems than Greka, also took a jab at his competitor’s maintenance record.
“They don’t spend any money on infrastructure,” Brown said of Greka after the meeting.
Fifth District Supervisor Joe Centeno said he has seen first hand the difference between well maintained facilities belonging to other energy companies and those of Greka.
Centeno asked O’Brien if he had seen the difference between Greka facilities and those of other companies. When O’Brien said he had seen pictures, Centeno challenged him to take an on-sight tour sometime.
“I think that Greka can do a much better job,” Centeno said.
And if Greka doesn’t, the fines and penalties will likely be stiffer in the future as a result of the recommendations the board approved.
The approval of the recommendations gave county staff the ability to begin assembling tougher ordinances that will be presented to the board at a later date.
The first is to develop a multiple response ordinance, the goal of which, according to the report, is to make it easier for responding agencies to recoup expenses and charge more when energy companies fail to make improvements or upgrades to facilities.
The second is for staff to develop a high risk offender ordinance, which will subject an energy company to increased oversight, reporting obligations and fines if it incurs a set number of violations within a fixed period of time. This number of set violations has not yet been determined.
The third recommendation is for staff to develop a centralized data base to compile violation history, which currently does not exist.
“During our preparation for this report, it became evident that pertinent regulatory agencies responsible for onshore oil keep their violation history in different databases,” the report says. “This lack of coordination hinders coordination of inspections, sharing violation history, and preparing coordinated plans for remedying violations.”
The fourth recommendation is to increase inspection and permitting fees for facilities requiring extraordinary time for inspection.
Ron Cortez, deputy CEO for the county, said during his presentation that the current permitting fee for an onshore petroleum company is a flat $1,000. He said the amount of time and money spent by county agencies to determine if a facility should be permitted often exceeds this amount. In these cases, he said, it would be reasonable to charge more than the flat fee.
The fifth recommendation essentially authorized county staff to return to the board every 60 days with a progress report on Greka.
The board voted 4-0 to approve each recommendation. Third District Supervisor Brooks Firestone recused himself from participating in the discussion due to a conflict of interest. The Jan. 5 spill occurred on land leased to Greka by Firestone. He told the Daily Sound last week that his ownership in Greka is small, but still constitutes a conflict of interest.
While the board’s acceptance of the recommendations was praised by some, many who spoke during public comment said the county already has enough regulations for energy companies; they just need to enforce them.
“For the most part the industry as a whole is not having a problem,” said Andy Caldwell, executive president of COLAB (The Coalition of Labor, Agriculture and Business). “We think that you have the ability right now to take care of the problem.”
After openly criticizing Greka for its maintenance record, Brown said BreitBurn and many other energy companies obey the existing laws and don’t need further regulations. He said it would be more effective to directly punish Greka.
“Not only is it not necessary,” he said of new ordinances. “It’s not going to target the thing that they want to target, which is Greka.
“There’s much more power in existing laws if you fully enforce what’s there now.”
Carbajal, however, said new regulations and ordinances are exactly what are needed.
“It's way overdue,” he said. “This [the recent spills] was the straw that broke the camel’s back.”