EASTSIDE — Maybe you didn’t know there was a pipeline pumping crude oil underneath the city by the sea, but City Council will consider continuing to let it flow later this month.
A crude oil pipeline has been present underneath Santa Monica since 1941, according to Los Angeles Times archives. The last contract, with Shell California Pipeline company, was signed in 1989.
It runs petroleum from Ventura County to refineries in Los Angeles County.
In 2005, Shell sold the pipeline to Crimson California Pipeline, who took over the agreement until it expired in 2009.
Crimson “continues to operate and maintain the pipeline in accordance with” the ordinance, despite the fact that it expired nearly five years ago.
On March 18, council will consider giving Crimson a new 20-year agreement.
In return for the privilege of running crude oil through the Bay City for the next 20 years, Crimson would pay City Hall $170,000 upfront.
Shell agreed to pay City Hall $2.1 million for use of the pipeline from 1981 through 1989, according to L.A. Times archives. Numerous lawsuits were fought between the two parties throughout the 1980s, with City Hall ultimately prevailing. For that period of time, they were able to charge market rates for the land that the pipeline traversed.
In the upcoming agreement, the base rate is determined by the California Public Utilities Code.
Crimson will also be required to purchase insurance to cover the cost of injuries or pollution caused by their pipeline. The pollution insurance would cover up to $35 million in damages.
In the event of a leak, Crimson is responsible for making the repairs to the satisfaction of the director of Public Works and the Fire Department will be immediately notified. It would be required to repay the cost of any damages to private property.
Council could reject the agreement, city officials said, but it may not matter.
“Should a franchise be rejected, Crimson, operating as a regulated common carrier pipeline utility, may have eminent domain and other rights under state law that may allow it to continue to operate the pipeline,” city officials said in a report.
The pipeline, 10 inches in diameter, carries the oil along a 3.9 mile stretch underneath the east end of Santa Monica, running along large portions of 26th Street, Cloverfield Boulevard, and 23rd Street.
In 2010, according to the Los Angeles Times archive, Crimson spilled oil into the Port of Los Angeles. Los Angeles attorneys claimed it was 1,300 barrels of petroleum over three months but Crimson said it was fewer than 40 barrels.
In 2012, the company agreed to a $1.75 million settlement with Los Angeles to end a criminal case. Company officials said that the spill was a result of damage done to the pipe during the construction of a drainage system for a nearby railway. An attorney for the company claimed, according to the Times archives, that the damage occurred before Crimson purchased the pipeline and that company officials didn’t know about it until the time of the leak.
Company officials attended last year’s Santa Monica Festival to raise awareness and provide information about local pipelines and pipeline safety.