In the 15 to 20 years that HVI Cat Canyon operated in Santa Barbara County, Errin Briggs saw one issue after another but never saw any improvements to the oil company’s operational behavior.
As the Santa Barbara County Planning Department’s supervising planner overseeing oil and gas permits and leases, he and his staff would interact with HVI Cat Canyon Inc., formerly known as Greka Oil Company, on a regular basis.
“There was never any corrective action to their approach,” Briggs said. “It was always, ‘use stuff until it breaks and deal with the consequences once it does.’ We just had constant issues with them.”
A federal judge recently ordered HVI to face more consequences by paying the United States and the state of California $65 million in penalties for violating federal regulations, cleanup costs, and natural resource damage, concluding a civil lawsuit filed against the company in 2011.
“Based on the totality of the circumstances, the spills evinced a pattern of reckless disregard for good oilfield industry practices and a series of negligent acts or omissions by HVI concerning oil spill prevention, and pipeline and facility inspection and maintenance,” the 65-page ruling stated.
Although the case focused on 12 spills (between 2005 and 2010) that were found in violation of the Clean Water Act, court findings show that 181 spills were reported to the California Office of Emergency services from 2006 to 2018, when the trial started—with flowline leaks cited as causing the largest number of spills and tank level alarm failures as causing the second highest, according to the ruling.
“HVI’s history of spills provided clear notice to HVI of systemic and recurring deficiencies in its spill prevention measures,” the ruling stated. “Yet, HVI failed to correct its deficiencies or to prevent them in the first place.”
The U.S. Justice Department, the Environmental Protection Agency, the California Water Quality Control Board, and the California Department of Fish and Wildlife filed the suit together. In a Justice Department press release, the agencies said that this decision holds HVI accountable for failing to meet environmental obligations, but county Supervising Planner Briggs said he’d hesitate to call this a victory.
HVI filed for bankruptcy in July 2019 after the state ordered the company, which owed international investment bank UBS AG more than $114 million, to pay more than $12 million in fines, according to previous Sun reporting. Briggs said he doesn’t know where the company will come up with money to pay the judgement.
“I’d be shocked if this $65 million is paid by Greka [HVI]. The dollar amount makes for a nice headline, but I don’t think anybody out there who was affected by them will see any money,” Briggs said. “This company used Santa Barbara County and went bankrupt and walked away. It’s actually a major bummer.”
When the company declared bankruptcy, it left behind more than 500 unplugged oil wells and all the physical infrastructure of the oil operation in Cat Canyon, leaving the area like a “ghost town,” he said.
“The land is still impacted, but lucky for us the state is going to come in and clean a lot of that up,” Briggs said.
California allocated about $200 million in the 2022-23 budget dedicated to plug wells and decommission facilities in the state, according to a state Budget and Policy post. About $25 million of that is coming to Santa Barbara County to plug more 200 wells, Briggs said, noting that work hasn’t begun quite yet, but the state recently hired a contractor to oversee the work.
“A ray of hope or a ‘small v’ victory is [that] Greka no longer operates oil and gas in this county. That’s a victory,” Briggs said.
Attorneys representing HVI according to online court records could not be reached for comment by the Sun’s deadline.
This article appears in Mar 9-16, 2023.