Exxon Oil Shipments Challenged : Environment: Firm's practice of sending tankers monthly without regulators' permission will be discussed at Camarillo meeting today.

By J.E. MITCHELL

April 7, 1995 12 AM PT

SPECIAL TO THE TIMES

Exxon Corp. has been quietly shipping monthly tankerloads of crude oil--with each trip passing about 50 miles west of the Channel Islands--since last October without permission of industry regulators, federal and state officials said Thursday.

Environmental activists thought they had won a victory in October, 1993, when the Houston-based oil giant decided to abandon its efforts to ship its Santa Ynez Unit offshore crude oil through the ecologically sensitive Santa Barbara Channel.

The issue will come up today when company representatives meet in Camarillo with officials of the federal Minerals Management Service, the California Coastal Commission and the county of Santa Barbara.

Public disclosure of the shipments from San Francisco Bay to Los Angeles aboard the 11-year-old Exxon-owned tanker R/S Baytown was made late last week when the regulators ordered that the company stop them by May 1 or face heavy civil penalties.

Since last October, the company has been shipping crude oil produced at its Santa Ynez Unit oil fields to the San Francisco Bay Area via pipeline to a refinery. Once at the refinery, some of that oil, however, has been pumped aboard the 780-foot-long Baytown and then brought south in shipping lanes at least 50 miles from the coast to refineries near Los Angeles Harbor.

“I think we’ve been betrayed,” said Robert Sollen, a spokesman for the 5,000-member Ventura and Santa Barbara County Los Padres chapter of the Sierra Club.

“Exxon has fought using pipelines for years,” Sollen said. “I hope they get a good solid warning, and if they do it again they should be hit hard with fines. This company clearly just does not care about what’s at stake here should there be an accident.”

Exxon officials, however, said they believe they have the legal right to move their oil by tanker ship when overland Los Angeles-bound pipelines reach capacity.

“We are pipeline-constrained,” said Exxon spokesman Bruce Tackett. “We’re not trying to hide this (operation) from anyone. We believe that we have the authority to tanker. They don’t. Obviously, since we disagree, we’ll have to work something out.”

Exxon chose to withdraw its application to ship oil through the Santa Barbara Channel in October, 1993, in part for economic reasons.

One year later, Exxon began shipping 200,000 barrels or 8.4-million gallons of Santa Ynez crude about once a month to the Los Angeles area using the Baytown, a double-bottomed vessel which can accommodate more than twice that amount of cargo.

Although Exxon officials notified state and federal officials that the company had begun shipping, it took regulators and a small army of lawyers until late last month to be sure that Exxon had no legal authority to conduct the operation, officials said.

According to Alison Dettmer, an analyst with the Coastal Commission’s energy and ocean resources unit, Exxon does not have the authority to move its oil by tanker.

“Following the review, we’re now confident that the permits which give them authority to develop the Santa Ynez Unit does not give them the authority to transport the oil they produce by tanker,” Dettmer said.

Thomas Dunaway, regional supervisor of development, operations and safety for the federal Minerals Management Service in Camarillo, said if Exxon refuses to cease tanker shipping, the company could face civil penalties as high as $25,000 for each day of non-compliance.

“We’re hoping to avoid assessing penalties,” Dunaway said.

Minerals Management and Coastal Commission officials are expected to give Exxon officials four options today: permanently cease tanker shipping, apply for a tankering permit for the run from the San Francisco Bay to Los Angeles, apply for a permit to ship oil from the Point Arguello Marine Terminal (which is near Exxon’s Santa Ynez offshore fields) or apply to ship by a tanker in some other manner.

Bill Douros, chief of Santa Barbara County’s Energy Division, said officials were dumbfounded by the oil company’s decision to transport a portion of its Santa Ynez oil south by tanker ship.

“Perhaps they did it because they believed they had a legal right,” Douros said. “Then again, perhaps they thought . . . no one would notice.”

Cynthia Leake, a spokeswoman for the Ventura County Environmental Coalition, said she was appalled by Exxon’s actions.

“I think we all thought that maybe, after the Valdez incident, this company understood why we all are concerned about tankering,” Leake said. “But apparently their attitude is ‘Let’s do it until we caught, and then will just pay the fine.’ I think it demonstrates their supreme arrogance.”

Coastal Commission analysts also said they are investigating whether some or all of an estimated 30,000 barrels of Chevron Point Arguello crude was sold to Exxon in October and then shipped to Los Angeles aboard the Baytown.

Chevron Corp. got permission from the Coastal Commission in 1993 to ship its own Point Arguello crude oil. But it was forced by the commission less than a year later to abandon the tanker shipping operation when it failed to make satisfactory progress in the development of an overland pipeline to the Los Angeles area.

G. Michael Marcy, a Chevron spokesman, said the company had no way of knowing whether its oil was shipped with Exxon’s Santa Ynez Unit crude oil when it was initially placed in the pipeline to Exxon’s refinery in Martinez. Marcy said that his company, severely constrained by regulations as to how it moves its crude oil, would not knowingly have sold the oil to Exxon if it knew in advance it was to be shipped to the Los Angeles area by tanker.