Oil Producers Forge Pact to Build Pipeline : Environment: The project, which would run 130 miles between Bakersfield and the South Bay, is behind schedule and still faces numerous hurdles. But tanker transport must end over the next two years.

In a bid to settle a lengthy battle over how to transport crude oil from the Point Arguello offshore field near Santa Barbara, the field’s major oil producers have signed a memorandum of understanding to build a $150-million, 130-mile pipeline.

The pipeline project would carry oil from Bakersfield to refineries in the Los Angeles Basin--including Chevron’s refinery in El Segundo and Texaco’s refinery in Wilmington--along a route past Santa Clarita and through the San Fernando Valley and central Los Angeles.

Point Arguello crude would reach the new line via the existing All American Pipeline.

The project--a joint venture of Chevron U.S.A. Products Co., Texaco Trading & Transportation Inc., Anschutz Co. and Pacific Pipeline System Inc.--replaces an earlier proposed pipeline route along the coastline south of Santa Barbara. That route was opposed by the Los Angeles City Council, questioned by the U.S. Environmental Protection Agency and eventually abandoned by Chevron as too costly.

“We believe that this is a win-win-win for the county of Los Angeles,” said Norman L. Rooney, Pacific Pipeline president.

The pipeline could provide the long-term alternative to oil tanker traffic along the coastline from Santa Barbara. The California Coastal Commission has required that tankering be eliminated over the next two years. Also, Rooney said, it could lessen environmental and safety risks, since it would be constructed using up-to-date technology that would reduce its vulnerability to earthquakes. It also would take some of the load off older pipelines--one of which dramatically ruptured in the Northridge quake--and trains now being used to bring crude oil into Los Angeles.

But environmentalists and other critics see numerous hurdles before the pipeline can go forward.

“They have agreed on the route, but the people on the route haven’t agreed with them,” said Los Angeles City Councilman Mike Hernandez. Hernandez described the route choice as “a classic example of environmental racism. . . . They’ve chosen a route through densely populated minority and high-use areas.”

Hernandez prefers what is known as the Cajon pipeline route through the El Cajon Pass. In the past three years, he said, the council has voted for three motions opposing a permit for the section of the Pacific Pipeline route through heavily populated portions of the San Fernando Valley and central Los Angeles that remains from the earlier proposal.

Environmentalists, who have opposed shipment of crude by tanker until a new pipeline can built, were equally skeptical of the new route’s chances.

“We still feel that this may be the most difficult pipeline to get through the (permitting) process,” said Lisa Weil, policy director the American Oceans Campaign. Chevron and the other producers, she predicted, “will use this to continue to find loopholes to allow their tankering from Point Arguello to continue past the deadlines imposed by the Coastal Commission last year.”

The commission approved the interim use of tankers by Chevron, contingent upon the oil companies and pipeline builders meeting several milestones. The producers must also end all tanker use by Jan. 1, 1996, regardless of whether a pipeline is completed.

Chevron is currently barred from using tankers because it failed to meet a Feb. 1 deadline that required a commitment to a specific pipeline project. It was also supposed to have the key permits required by various municipal governments and agencies with jurisdiction over the pipeline route.

And to get these, it has to have an approved environmental impact statement for the entire route.

“They’re not on schedule,” said Alison Dettmer, coastal program analyst with the Coastal Commission. “I don’t even think they can get the local approvals until fall of 1994, based on their current schedule.”

Some environmentalists and regulators had expected Chevron to ask the Coastal Commission to amend its tanker permit and resume tanker operations because of the decision to back the Pacific Pipeline. But a Chevron spokesman said Thursday that no such request was contemplated.

Proponents of the Pacific Pipeline hope to begin construction in early 1995 and to open the line by the time tanker use must end.

The memo of understanding “gives us the funds to make the project work while we negotiate funding for the overall project,” said Rooney, the Pacific Pipeline president. One financing agreement has already been signed, he said.

Larry Perkins, project coordinator for Chevron U.S.A. Inc., said Chevron committed itself to the new route largely because it is shorter and less expensive than the first proposal, which would have cost $215 million, compared with the new route’s $150-million price tag. Also, it will let the company transport crude oil from Kern County oil fields, which have faced a bottleneck coming into the Los Angeles Basin.

New Route for Offshore Oil

In the continuing battle over shipping crude from the Point Arguello offshore oil fields to refineries in Los Angeles, an oil industry consortium has proposed a 130-mile pipeline from Bakersfield through Santa Clarita to El Segundo and Wilmington. The line would connect with the existing All American Pipeline, Council opposes the urban segment of the latest route; the proposal Cajon Pipeline is one alternative.