Chevron Agrees to Pay Fine of $1.2 Million

Chevron U.S.A. agreed Wednesday to pay a fine of nearly $1.2 million for operating an oil well off the Ventura coast with a broken anti-blowout valve, described by authorities as the key safety feature on a drilling platform because it halts the flow of oil during emergencies.

The lawsuit settlement announced by federal prosecutors represents the largest fine imposed for violations of the federal Outer Continental Shelf Lands Act, eclipsing a $1-million penalty against Chevron in 1970 for safety violations in the Gulf of Mexico.

The new penalty is the second big fine against Chevron for violations on the same Santa Barbara Channel oil rig. In 1992, the company paid $8 million for repeatedly dumping oil, grease and other toxic wastes into the ocean in violation of the Clean Water Act.

“No one wants another Santa Barbara oil spill,” U.S. Atty. Nora M. Manella said Wednesday in Los Angeles, referring to a disastrous 1969 well rupture beneath an offshore platform. “Rigorous enforcement of safety regulations . . . is our best guarantee against the catastrophic consequences of future oil spills.”

Chevron officials acknowledged operating a well on the Grace Platform 13 miles off Port Hueneme that pumped for several months in 1994 with a faulty valve that could not have stopped the flow of oil from beneath the ocean floor if severe problems had developed.

But company spokesman Ed Spaulding emphasized that a massive spill such as the one that coated Santa Barbara County beaches with oil after the 1969 blowout was never a possibility.

He said that even if a fire or pipeline rupture had occurred without a working shut-off value, the pressure from the oil reservoir beneath Chevron’s platform is lower than the water pressure of the ocean, so little oil would have escaped.

“Clearly, there would have been some minor amounts of leakage, but there would not have been a massive release of oil,” Spaulding said. “We regret the incident. But we made some changes in both responsibility and also some personnel changes, and the problem has not been repeated.”

According to prosecutors and the company, Chevron discovered during a routine maintenance inspection in mid-1994 that a shut-off valve about 100 feet beneath the ocean floor was not fully closing. Spaulding said the repair was ordered through internal channels, but was not made.

Assistant U.S. Atty. Kurt Zimmerman said federal inspectors found the same problem during a routine inspection in September 1994--five months later--and it was only then that Chevron shut the well down and repaired the valve.

In the government’s civil complaint, Zimmerman said the company created conditions that posed “unreasonable risk to public health, life, property, aquatic life, wildlife, recreation, navigation, commercial fishing and other uses of the ocean.”

Zimmerman noted that Chevron pleaded guilty five years ago to 65 violations of the Clean Water Act for dumping toxics from the Grace Platform into the ocean.

The company agreed to pay $6.5 million in criminal penalties--then the third-largest environmental criminal fine assessed against a company--and an additional $1.5 million in civil penalties to settle the case.

But in a statement Wednesday, Carnie Block, a Chevron vice president, said his company’s safety record has been exemplary, as shown by three commendations since 1991 from the U.S. Minerals Management Service--the same federal agency that discovered the broken safety valve.

Platform Grace, constructed in 1979, and its companion rig, Gail, erected in 1987, have produced 27 million barrels of oil, officials said. Grace and Gail are among five platforms Chevron plans to shut down because low oil pressure and high pumping costs make the operations uneconomical.

Wednesday’s settlement still must be approved by a federal judge. The money would go into the U.S. Treasury.