Prado Reservoir Oil Spill May Cost Millions

A winter oil spill in the Prado Dam reservoir fouled as many as 900 acres of wildlife habitat, including nesting grounds for an endangered bird, and could eventually cost Orange County water users as much as $2 million a year, officials said Wednesday.

The spill has thrown a wrench into the Orange County Water District’s plans to annually harvest more than 3 billion gallons of reservoir water for local homes and businesses, according to water district general manager William R. Mills. Replacing that water on the open market will cost about $2 million, an expense that will be passed on to customers.

Because of the potential threat to the endangered bird, the least Bell’s vireo, the U.S. Fish and Wildlife Service earlier this month moved to block the water district’s conservation plans until the aging oil wells that caused the spill are repaired and improved, Mills said.

Those improvements could cost as much as $12 million. It is not clear who would pay.

The spill, which occurred in January, prompted the Riverside County district attorney’s office to take legal action against Prado Petroleum Co. of Santa Ana, owner of the 13 oil wells behind the Prado Dam. Two weeks ago, a Riverside County Superior Court commissioner barred the company from pumping any more oil at the reservoir until it improves the wells and meets other conditions.

At the same time, the spill has highlighted a longstanding dispute between Prado Petroleum owner George Brayton and the Orange County Water District. The dispute involves Brayton’s property rights and the water district’s efforts to secure the use of water to recharge its vast underground water reserves.

The incident also touched off a dispute between Riverside County prosecutors and the California Division of Oil and Gas, which the prosecutors accuse of interfering in their investigation of the petroleum company.

At one point, Riverside County Deputy Dist. Atty. Jay Orr said his office told Division of Oil and Gas officials that the agency’s efforts to broker a settlement might be construed as obstruction of justice. The agency “has no legal standing to resolve the problems in the Prado basin,” Orr said Wednesday.

An agency spokeswoman said, however, that the division is seeking only to find a long-term answer to the Prado reservoir problem.

“We’ve attempted to gather all the interests involved to come up with a solution,” said spokeswoman Pamela Morris. “We haven’t seen or heard what these objections are. Our commitment remains to solving the problem.”

Many of the facts surrounding the January incident are in dispute, including the actual amount of oil that spilled, the extent of the environmental damage and the specific cause of the discharge.

According to Orr, as many as 80 barrels of oil from sumps surrounding the four active oil wells flowed into the Prado reservoir when winter storm waters behind the dam rose over the wells in January. The wells were not pumping at the time of the incident.

Orr said the sumps, known as “cellars,” should have been cleaned and pumped dry before the winter storm season, when water in the dam often covers Prado Petroleum’s wells.

As the water level dropped, the oil spread out over 900 acres of scrub that is home to the vireo and other wildlife, Orr said. At least 40 birds were killed, although Orr said he does not know if any were vireos. The endangered migrating birds usually nest in the land behind the dam in the spring.

State agencies spent about $190,000 to contain and then clean up the spill, Orr added.

“This was a major spill,” Orr said. “If you saw this at the beach, you’d say the Exxon Valdez just crashed there.” Brayton, however, said the spill involved only 20 barrels, or about 840 gallons, and that the worst damage was concentrated in about 100 acres. Records of the Division of Oil and Gas state that only 10 barrels spilled.

“We really don’t know what happened out there,” Brayton said. “We thought we were in good condition. We passed our (Division of Oil and Gas) inspection. We thought we were in good form” before the storms.

The spill never would have occurred, Brayton said, if the Army Corps of Engineers, which operates the dam, had not agreed to the Orange County Water District’s request to raise the water level between winter storms to help the district deliver water to its underground reserves.

“They can all say our company is lousy, but they never say what they are doing to contribute to our financial situation where I can’t run it properly,” Brayton said. “I’m on the verge of bankruptcy.”

Prado Petroleum’s 13 wells were sunk on plains and knolls behind the dam, between 490 and 505 feet above the dam’s base. Brayton said he purchased the wells and their attendant mineral leases in 1982 for $387,000, and spent nearly $2 million making improvements. Some of the leases are from the federal Bureau of Land Management. Others are on private property that was condemned by the water district 25 years ago.

The four operating wells each month produce oil valued at about $13,000, Brayton said. If all 13 were pumping, they would yield revenue of about $45,000. The oil is pumped to the side of the Prado basin, where it is picked up by tanker trucks.

During most of the year, the water behind Prado Dam is well below Prado Petroleum’s wells. But in the winter storm season, the water level often rises above 490 feet, forcing Brayton to stop production.

Recently, the Orange County Water District has been negotiating with the Corps of Engineers to raise the water level to 505 feet, which would keep all of the Prado Petroleum wells under water for much of the year.

The excess water would be released slowly in the spring, allowing the water district to capture it in catch basins along the Santa Ana River channel. The catch basins divert excess water from the dam to the district’s underground storage field, from which more than 20 local water districts pump their water. The underground supply serves about 2 million Orange County customers.

Orr said Brayton’s leases give the Corps of Engineers the right to raise the water level at its discretion. And he provided a copy of a 1992 federal court decision in which a federal judge found that Brayton’s lease “explicitly gave the United States the right to flood the land permanently or intermittently.”

Brayton said he plans to appeal that decision.

As part of the deal with the Corps of Engineers, the water district has agreed to spend about $1 million to replace the vireo nesting areas that would be flooded by raising the water level behind the Prado Dam.

Because the least Bell’s vireo is protected under the Endangered Species Act, the Fish and Wildlife Service has the authority to review the deal and set conditions. And on March 2, the federal agency formally informed the Corps of Engineers that it cannot proceed with plans to raise the water level behind the Prado Dam until Prado Petroleum’s wells are reconstructed so they do not leak.

Raising the level of the well heads above 505 feet could cost $8 million to $12 million, Brayton said, adding that he cannot afford it.

“I feel that I’ve made a good faith effort to put the wells in good condition, and I’ve been destroyed by government agencies,” Brayton said.

Mills, meanwhile, said he does not know what the water district will do.

“If (Brayton) walks away from it, we’re left holding the bag of fixing the wells. . . . There doesn’t seem to be anybody else who is going to do it.”