Shipping Companies Tentatively Agree to Pay $100 Mn Over California Oil Pipeline Breach
A group of international shipping companies and their subsidiaries agreed last week to pay $96.5 million to Amplify Energy Corp. to dismiss one of the last remaining lawsuits over a massive oil spill off the Southern California coast that sent at least 596,000 liters of crude into the waters off Huntington Beach in October 2021.
According to a report published by Yahoo! News on Thursday, March 2, the tentative settlement agreement, which does not include an admission of liability, will require approval from U.S. District Judge David O. Carter, who has been overseeing the litigation into the 2021 spill.
Amplify's lawsuit, filed a year and a half ago, claimed that international shipping companies and their subsidiaries allowed their container ships, the MSC Danit and Cosco Beijing, to drag their anchors across the sea floor near the pipeline, which caused the damage that resulted in the oil spill.
The settlement comes as the parties prepared for a first phase of a trial next month that would have determined whether Amplify was solely responsible for the oil spill and whether the seaworthiness of the container ships or any negligence by the crews or owners caused the pipeline damage or the oil spill.
The disastrous oil spill, which had never been witnessed in the state for nearly three decades since 1994 when an earthquake split open a pipeline, spilling approximately 528,000 liters into the sea, threatened coastal wetlands, affected local wildlife, and forced the closure of beaches for a week and fisheries for a month.
In a report published by Pipeline Technology Journal (PTJ) on October 10, 2021, California Coast Guard officials said the breach in the oil pipeline could have occurred several months or even a year before the massive spill.
According to the report, investigators suspected an initial anchor strike which displaced a 32-meter section of the pipeline, stripped away its concrete casing and left the section vulnerable to other potential anchor strikes as well as environmental stressors.