May 20, 2015
The U.S. pipeline operator responsible for Tuesday’s
rupture, which released up to 105,000 gallons of oil into the Pacific Ocean off
Southern California, has a shaky safety record, reports show.
A rupture in a 24-inch pipeline operated by Plains All
American Pipeline left a 9-mile trail of oil on the shores along Highway 101
near Santa Barbara, according to Coast Guard Petty Officer Andrea Anderson.
Officials warned the public to keep off the polluted
shoreline after toxic fumes were reported in the area. The California
Department of Fish and Wildlife said Wednesday that it was assessing the damage
to the area’s wildlife and on Wednesday night, Gov. Jerry Brown declared a state of emergency in Santa Barbara County due
to the effects of the spill.
Plains said it shut down the flow of oil after the spill and
initiated its emergency response procedures. Boom trucks were sent in Tuesday
to clean the water.
“Plains deeply regrets this release has occurred and is
making every effort to limit its environmental impact,” the company said in a
statement. “Our focus remains on ensuring the safety of all involved.”
The company did not respond to request for comment.
Tuesday’s spill follows a long history of safety and
environmental violations by the company in the United States and
Canada, news reports and Environmental Protection Agency records show.
In 2014 a Plains pipeline ruptured in Los Angeles’ Atwater
Village, sending more than 18,000 gallons of crude running through the
city’s streets. Toxic fumes were reported in the industrial area for days after
the spill.
The company has been cited
for 10 oil spills that violated the Clean Water Act in Texas,
Louisiana, Oklahoma and Kansas. In 2010, Plains settled with the EPA after
agreeing to pay $3.2 million in civil penalties.
In April 2011 a pipeline operated by the company’s
Canadian branch, Plains Midstream Canada, ruptured in a remote area of
Alberta’s boreal forest, releasing at least 37,000 barrels of crude oil.
The same
line ruptured in 2006, spilling about 180 barrels.
In a 2012 spill, a smaller line operated by Plains Midstream
Canada ruptured, spilling 2,900 barrels (or more than 1,160,000 gallons of oil)
of crude into the Red Deer River in central Alberta. The company was ordered in
January to hire a third party to audit its pipelines in Alberta, Saskatchewan,
Manitoba and Ontario after regulators said the company failed to comply with
previous safety directives.
Despite its spill record, Plains has plans to construct a
pipeline in Arkansas, where an Exxon Mobil pipeline
ruptured in March 2013, spilling more than 134,000 gallons of crude
oil into a housing subdivision, forcing hundreds of residents to evacuate.
Plains’ recent pipeline ruptures come amid increasing
pipeline accidents across the U.S. involving different operators, government
data show.
There were 704 oil and gas pipeline incidents involving
leaks or emergency shutdowns to avoid accidents in 2014, according to data from
the Pipeline
and Hazardous Materials Safety Administration (PHMSA), a branch of the U.S.
Department of Transportation.
That averages nearly two spills every day last year in
the United States.
The pipeline incidents from 2014 resulted in 19 deaths, 96
injuries and over $300 million in reported property damage, PHMSA data show.
Since 1995, there have been more than 10,000 incidents, 371 deaths, 1,398
injuries and in excess of $6 billion in reported property damage,
notwithstanding the significant environmental damage.
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California Gov. Jerry Brown declared
a state of emergency for Santa Barbara County late Wednesday after an
onshore pipeline burst, spewing thousands of gallons of crude oil into the
Pacific Ocean — blackening beaches and endangering West Coast wildlife. The
area, a popular camping spot some 20 miles from Santa Barbara, known for its
palm tree-lined seashore and pristine surf, has been “closed
indefinitely.” The extent of the damage is not known.
A pipeline that carries oil from an onshore facility to
refineries ruptured Tuesday, leaking for hours into a culvert under a
highway and into a storm drain that led to the ocean near the Refugio State
Beach. A control room operator noticed “abnormalities” in the line and shut it
down, according to the Los
Angeles Times. Firefighters responded to reports of a gasoline smell.
Texas-based oil company Plains All American Pipeline said up
to 105,000 gallons of crude oil may have leaked out — up to 21,000 gallons of
which may have spilled into the sea.
“It’s important to remember this stretch of California
coastline is unique to the world. It’s beautiful and pristine,” Santa Barbara
County Supervisor Doreen Farr said, according to NBC
Los Angeles. “This is more than an inconvenience. This is just a disaster.
We are taking it very seriously.”
It’s the same site that saw a massive spill in 1969 when a
Union Oil drilling rig had
a blowout. It was estimated that as much as 4.2
million gallons may have leaked out, causing severe ecological damage that
ignited the modern environmental movement — which led to the first Earth Day
the following year.
On Wednesday, cleanup crews in protective gear combed
beaches for black tar and put down protective booms in the ocean to keep it
from spreading. The coast is home to two endangered birds, the snowy plover
and the least tern,
both of which forage for food there. Seals, sea lions and whales also live
nearby. So far, the spill has created two
slicks that span some 9 miles along their habitat.
Some on social media have started sharing photos of the
spill using the hashtag #SantaBarbaraOilSpill.
One journalist posted a picture on Twitter of a pelican
covered in tar.
It's one of the most harrowing things I've seen—an
oil-drenched pelican struggling for its life #SantaBarbaraOilSpill
pic.twitter.com/J8ghC3FHnG
— Scott London (@scottlondon) May 20, 2015
On Wednesday, biologists were counting
dead fish along the shore where students from Santa Barbara City College
were carrying
away buckets of black goo.
The emergency proclamation will free up federal funds to
help with cleanup. Brown said in a
statement it “cuts red tape and helps the state quickly mobilize all
available resources.” The state is preparing to send out six boom boats, three
65-foot collection vessels and cleanup crews, the governor said.
“We will do everything necessary to protect California’s
coastline,” he added.
Officials have also closed both Refugio State Beach and El
Capitan State Beach to keep Memorial Day vacationers away from the oil-soaked
scene. And the state’s Department of Fish and Wildlife canceled fishing and
shellfish harvesting.
“It smells like what they use to pave the roads,” Fan Yang,
of Indianapolis, told
the Associated Press. “I’m sad for the birds — if they lose their habitat.”
It is not yet clear why the pipeline ruptured and the extent
of its damage is still unknown. It was running at full capacity — a rate of
about 2,000 barrels an hour. Plains Pipeline said the pipeline was inspected in
2012 and showed no issues. It was tested again two weeks ago, though those
results have not yet been released.
Late Wednesday night, the Los
Angeles Times published a report saying Plains Pipeline has racked up for
than 175 safety and maintenance violations.
“A Times analysis of data from the Pipeline and Hazardous
Materials Safety Administration shows Plains’ rate of incidents per mile of
pipe is more than three times the national average,” according to the newspaper.
“Among more than 1,700 pipeline operators listed in a database maintained by
the federal agency, only four companies reported more infractions than Plains
Pipeline.”
“The company’s infractions involved pump failure, equipment
malfunction, pipeline corrosion and operator error,” the newspaper added. “None
of the incidents resulted in injuries. According to federal records, since 2006
the company’s incidents caused more than $23 million in property damage and
spilled more than 688,000 gallons of hazardous liquid.”
The company did not comment on the Los Angeles Times’
findings, but it released a statement earlier in the week.
“Plains deeply regrets this release has occurred and is
making every effort to limit its environmental impact,” it said. “Our focus
remains on ensuring the safety of all involved. No injuries have been reported
at this time.”
Federal regulators have started investigating the incident
along with state law enforcement authorities who are looking for possible
criminal prosecution or possible civil liability, according
to the Associated Press.
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KEYT is
reporting that the company has a record of other pipeline ruptures.
Plains All-American Pipeline, the company authorities say is
responsible for the spill, has a prior spills history. According to the EPA and
U.S. Justice Department, Plains All-American Pipeline has had 10 serious crude
oil spills in four states that included: Texas, Louisiana, Oklahoma and Kansas.
In 2010, the company reached a settlement with the EPA for a
$3.25 million dollars civil penalty for violating the Clean Water Act. The
company also agreed to spend $41 million dollars to upgrade more than 10,000 miles
of crude oil pipelines.
Between June 2004 and September 2007, more than 273,000
gallons of crude oil were discharged from various pipelines owned by Plains
All-American Pipeline, according to the EPA. Some of that oil ended up in
rivers, lakes, and oceans.
In January 2015, a coalition of environmental groups sued
Plain All-American Pipeline over an oil-by-train terminal near Taft.
They were transporting oil for Exxon-Mobil.
////////////////////////------------------/////
Stifel Nicolaus Trims Plains All American Pipeline, L.P.
Target Price to $56.00 (PAA)
Plains
All American Pipeline, L.P. (NYSE:PAA) had its price target cut by Stifel
Nicolaus from $58.00 to $56.00 in a research note issued to investors on
Thursday. The firm currently has a buy rating on the stock.
Plains All American Pipeline, L.P. (NYSE:PAA)
traded down 0.35% during mid-day trading on Thursday, hitting $48.48. 823,995
shares of the company’s stock traded hands. Plains All American Pipeline, L.P.
has a 52 week low of $43.61 and a 52 week high of $61.09. The stock has a
50-day moving average of $49. and a 200-day moving average of $50.. The company
has a market cap of $18.24 billion and a price-to-earnings ratio of 20.38.
Plains All American Pipeline, L.P. (NYSE:PAA) last posted
its quarterly earnings results on Tuesday, May 5th. The company reported $0.57
earnings per share for the quarter, beating the analysts’ consensus estimate of
$0.54 by $0.03. The company had revenue of $5.94 billion for the quarter,
compared to the consensus estimate of $10.70 billion. During the same quarter
last year, the company posted $0.65 earnings per share. Plains All American
Pipeline, L.P.’s revenue was down 49.1% compared to the same quarter last year.
Analysts expect that Plains All American Pipeline, L.P. will post $2.23 EPS for
the current fiscal year.
The company also recently declared a quarterly dividend,
which will be paid on Friday, May 15th. Investors of record on Friday, May 1st
will be given a dividend of $0.685 per share. This represents a $2.74 dividend
on an annualized basis and a yield of 5.65%. The ex-dividend date of this
dividend is Wednesday, April 29th. This is an increase from Plains All American
Pipeline, L.P.’s previous quarterly dividend of $0.68.
Other equities research analysts have also recently issued
reports about the stock. Analysts at Barclays lowered their price target on
shares of Plains All American Pipeline, L.P. from $60.00 to $58.00 and set an
overweight rating on the stock in a research note on Thursday. Analysts at
Jefferies Group lowered their price target on shares of Plains All American
Pipeline, L.P. from $57.00 to $56.00 and set a buy rating on the stock in a
research note on Friday, March 20th.
Analysts at Zacks
reiterated a neutral rating and set a $49.00 price target on shares of Plains
All American Pipeline, L.P. in a research note on Wednesday, March 18th.
Finally, analysts at Citigroup Inc. reiterated a buy rating and set a $57.00
price target (down previously from $66.00) on shares of Plains All American
Pipeline, L.P. in a research note on Monday, February 9th. Two investment
analysts have rated the stock with a hold rating and ten have issued a buy
rating to the company’s stock. The stock currently has an average rating of Buy
and an average price target of $60.50.
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Plains All American Pipeline, L.P. (NYSE:PAA)
is engaged in the transportation, storage, terminalling and marketing of crude
oil and refined products, as well as in the processing, transportation,
fractionation, storage and marketing of natural gas liquids (NGL).
Company History
Key events in our company's history:
1981
Plains begins as a small oil and gas exploration and production
company called Plains Resources.
1989
Plains Resources creates a midstream subsidiary to market
its oil and gas and that of other producers.
1992-1993
Plains shifts its focus solely to crude oil and targets hard
assets including terminals, gathering systems, pipelines, trucks and more.
1993-1994
Plains constructs the Cushing terminal in Oklahoma, the
largest infrastructure development west of the Mississippi at the time, and
acquires enough land for future expansion.
1998
Acquires the All American Pipeline and executes IPO of
Plains All American (NYSE: PAA).
1999
Acquires Scurlock Permian and Chevron West Texas Pipeline.
2001
Management and investor group acquires controlling interest
in PAA’s GP from Plains Resources and separates the midstream business from the
exploration and production business.
2001
Plains All American acquires CANPET and Murphy Oil Company's
midstream crude oil assets, consolidating the two into what is now known as
Plains Midstream Canada.
2004
Acquires Link Energy’s North American crude oil and pipeline
operations, effectively doubling Plains’ asset base.
2006
Completes merger with Pacific Energy Partners and makes
eight acquisitions, entering the refined products and barging businesses.
2012
Acquires Canadian NGL assets from BP and five crude oil rail
terminals from U.S. Development.
2013
Executes IPO of a portion of PAA's General Partner (NYSE:
PAGP).