The company whose oil spill last October devastated Orange County’s coastline and coastal businesses – and later acknowledged it failed to shut down the pipeline despite hours of alarms – will pay a fine equivalent to 1.5% of its annual revenues to resolve state criminal charges.
The plea agreement, announced Thursday, was heralded as strong accountability by the top state and county prosecutors, after Amplify Energy separately pleaded guilty earlier in the day to a separate, federal charge of negligently leaking oil off Orange County’s coast.
“If you pollute our environment, the California Department of Justice [and] the Orange County District Attorney’s office will hold you accountable. Today we proved that yet again,” said California Attorney General Rob Bonta at a news conference in Santa Ana.
He noted Amplify failed to take action to stop the leak for 16 hours as alarms warned about the spill.
The fine, split between the state and county government, to resolve six state misdemeanor criminal charges is $5 million – equivalent to 1.5% of Amplify’s annual revenues last year of $343 million.
“The numbers are really phenomenal,” said OC District Attorney Todd Spitzer, referring to the settlement amount.
Calling the spill “absolutely devastating,” Spitzer said “Amplify unequivocally hit the snooze button. They knew they had a leak.”
Federal and state prosecutors have not charged any company officials over the spill, but rather the companies themselves, which they’ve used to extract fines and promises to prevent further leaks in order to end the prosecutions.
To resolve separate federal criminal charges filed in December, Amplify recently agreed to pay a $13 million fine and pleaded guilty in federal court on Thursday.
The state and federal deals do not include any jail time or personal fines against company officials.
“I think this is a very strong showing to the rest of the industry,” Bonta said at Thursday’s news conference.
“This will hurt. This hurts.”
In a statement, Amplify’s CEO said the settlement follows through on commitments the company made after the spill.
“We worked diligently to support the successful clean-up and remediation efforts, including deploying upwards of 1,800 oil spill response contractors, have paid covered claims as expeditiously as possible, and continue to work cooperatively with the various state and federal agencies investigating these matters,” said CEO Martyn Willsher.
The company was required by law to quickly clean-up the spill, cooperate with investigations and compensate for damage it caused.
“Amplify Energy remains committed to safely operating in a way that ensures the protection of the environment and the surrounding communities,” Willsher added.
The spill last October leaked an estimated 25,000 gallons off Orange County’s coast, devastating fisheries and businesses that operate in fishing and coastal tourism. Fishing and lobster trapping zones shut down for weeks while authorities conducted safety testing.
The leak came months after one or more ships’ anchors dragged the pipeline during a storm on Jan. 25, 2021, according to federal prosecutors.
The ships’ owners are separately being sued by Amplify and businesses impacted by the spill.
Huntington Beach also was forced to cancel the second day of its massive, coastal Pacific Airshow – impacting hotels, restaurants and other coastal businesses.
Earlier Thursday, Amplify Energy pleaded guilty to violating the federal Clean Water Act over the spill and agreed to pay out $13 million in federal fines.
Federal prosecutors charged Amplify Energy with criminal negligence in December, alleging the company failed to answer eight different alarms in the hours before they reported the spill to authorities.
The company will be placed on probation for the next four years, and pledged to install a new leak detection system and train their employees how to identify and respond to leaks according to a statement from the US Attorney’s Office.
The state settlement announced Thursday has similar probation provisions.
To read the full federal settlement agreement, click here.
The settlement comes just under a few weeks before the anniversary of the spill that shut down Orange County’s coastline for weeks, pouring thousands of gallons of crude oil into the ocean and shutting down business for local restaurants, hotels and other coastal businesses.
The picture of what happened in the early hours of the spill remained murky for months, with Huntington Beach city officials claiming the first reports of the oil spill came hours before the company acted to shut down the pipeline.
In August, the company settled a series of suits brought by local business owners who were impacted by the spill, for an amount that has not yet been announced. And the month before that, the company agreed to a settlement to reimburse the county government nearly $1 million for its expenses related to the spill.
The state also has an ongoing civil case against Amplify.
The headline was updated to reflect that the 1.5% equivalent is based on last year’s revenues, instead of yearly revenues.
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a Groundtruth initiative. Contact him at email@example.com or on Twitter @NBiesiada.
Nick Gerda covers county government for Voice of OC. You can contact him at firstname.lastname@example.org.
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