Unocal to Pay $1.5 Million for Petroleum Leak : Courts: Company admits discharging up to 8.5 million gallons of diesel-like liquid over 40 years. Executives apologize and say they will spend whatever it takes to clean up state’s largest spill.

Unocal Corp. was found guilty Tuesday on three criminal pollution charges and ordered to pay $1.5 million for its massive leak of petroleum thinner into the ocean and ground water at its Guadalupe oil field.

The court action, based on Unocal’s plea of no contest to the three counts, puts an end to the criminal case against the oil company for negligence in discharging up to 8.5 million gallons of the diesel-like liquid and failing to report the spills as required by law.

Unocal Executive Vice President John F. Imle Jr. apologized for the leaks, which he said occurred over four decades. He pledged that the company will spend whatever it takes--potentially tens of millions of dollars--to clean up the spill, the largest in state history.

“It’s a very serious condition,” Imle said after the court hearing. “It’s one we regret. It’s one that should not have happened.”

San Luis Obispo Dist. Atty. Barry LaBarbera, who dropped 33 misdemeanor charges as part of a plea agreement with Unocal, rejected criticism that his office had been too soft on the company.

“This is just the beginning for Unocal,” LaBarbera said. “That’s basically all we could accomplish at this stage.”

With the resolution of the criminal case, Unocal faces fines of up to $170 million in a civil suit to be filed soon by the state’s Office of Oil Spill Prevention and Response.

By contrast, Southern Pacific railroad and three other companies agreed Monday to pay $40 million in penalties for spilling 19,000 gallons of weed killer in 1991 into the Upper Sacramento River near Dunsmuir.

At the Guadalupe oil field 20 miles south of San Luis Obispo, diluent has long been used to thin the heavy crude oil so it can be pumped out more easily. Since Unocal took over the field in 1953, it has used 1.2 billion gallons of the petroleum thinner, company officials said.

Pipeline breaks and other diluent leaks have occurred periodically over 40 years, Imle said. State investigators have collected evidence of discharges at the site since 1978 and have accused the company of attempting to cover up the leaks.

It was not until 1990 that Unocal admitted that diluent seeping from the sand at Guadalupe Beach and entering the ocean had come from the Guadalupe oil field. At that point, the company recognized that the leaks were a serious problem, stopped using the diluent and built a beach wall in the hopes of holding back the underground flow of fluid.

No one has been able to determine how much diluent has flowed into the ocean, but recovery wells on the beach have pulled up more than 650,000 gallons of the liquid since 1990.

Company officials say most of the leaked diluent has seeped into the ground below the oil field. The company estimated last week that 4.6 million gallons to 8.5 million gallons of the fluid have contaminated ground water.

“It’s certainly an offense to the environment to have that stuff at any time touch the (ocean),” Imle said. “A sheen on the water of a few gallons may not be a disaster but it’s certainly not acceptable and it’s not something we want to be associated with.”

Similarly, Imle said, “the presence of diluent on the ground water, even though the ground water is not potable, is not acceptable.” Under the plea agreement, Unocal pleaded no contest to depositing a petroleum product where it could pass into state waters, negligently failing to report petroleum product discharge into navigable waters, and failing to report a discharge into state waters.

Municipal Judge James D. Ream accepted the pleas and found Unocal guilty on the three counts, dismissing the other charges against the company and six present and former employees.

In keeping with the plea agreement, Ream ordered Unocal to pay $1.5 million, including $300,000 to be spent on environmental and recreational projects in San Luis Obispo County. The judge also sentenced the company to three years probation, requiring it to clean up the site and give environmental education to employees at the Guadalupe field.

Speaking to reporters, Imle denied that Unocal attempted to cover up the spills but acknowledged that employees did not follow their responsibility to report all leaks. “There was a failure in what we thought was a well-established procedure,” he said.

In recent years, the company has become increasingly conscious of environmental concerns, he said. It has set up hot lines so employees and community members can make anonymous reports of any leaks in the Guadalupe area.

Unocal Spill

Unocal Corp. has leaked up to 8.5 million gallons of petroleum thinner at its oil field near San Luis Obispo.