News Release (C-5-98)

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For Immediate Release (C-5-98) Contact: Communications Office (916) 324-9670 July 22, 1998

$43.8 Million Settlement Reached in Guadalupe Oil Field Case

SACRAMENTO -- A $43.8 million civil settlement has been reached with Unocal Corporation for environmental damage caused by forty years of leaking petroleum operations at Unocal's Guadalupe Oil Field in San Luis Obispo and Santa Barbara Counties. The settlement, filed today in San Luis Obispo County Superior Court by the state's environmental agencies, includes compensation for natural resource damages for injuries to wildlife, habitat, and recreational use, as well as for civil penalties and costs. Additionally, Unocal agrees to follow the cleanup order issued by the Central Coast Regional Water Quality Control Board on April 3, 1998. This settlement results from six years of investigation, damage assessment and negotiation.

"This enforcement action serves two important purposes; it helps to restore the ecological damage done, and it underscores our belief that actions like this help to keep a level playing field for all California businesses so they will do right by the environment," said California Secretary for Environmental Protection Peter M. Rooney.

"With this settlement, cleanup can begin, and we have the opportunity to provide water quality enhancement projects. Because degradation of water resources which will continue to take place for a very long time at this site, water quality projects are important," said Russ Jeffries Chairman of Cal/EPA's Central Coast Regional Water Quality Control Board. "This was a team effort among our sister environmental agencies and the Attorney General's Office, and we are very grateful for the assistance."

Unocal contaminated much of the 2700 acre site with hundreds of leaks from a pipeline system that delivered diluent throughout the Guadalupe Oil Field from the 1950's until the early 1990's when production at the field ceased. Diluent, a refined petroleum product, was used to enhance crude oil recovery from wells. Unocal did not report the leaks to state officials, though it was required by law to do so. State officials discovered the leaks when an informant called Department of Fish and Game in 1992, and search warrant was subsequently executed. Current estimates of the amount of diluent leaked range from 8.5 million gallons to over 12 million gallons. Both ground water and surface waters in the vicinity of the site have been contaminated by these leaks.

Under the settlement, Unocal agrees to comply with a cleanup order issued by the Regional Board on April 3, 1998. That order's initial goal is to eliminate pollution threats to surface waters, and define the first phase of cleanup. Unocal will excavate sixteen plumes at the field, beginning this fall. The order also mandates certain bioremediation techniques, pumping, additional characterization and pilot studies for potential innovative cleanup techniques. The Regional Board will evaluate this work, and will issue further cleanup orders as appropriate.

The monetary portions of the settlement to be paid to the state include:

1. $11.1 million to fund future inland response protection and pollution response activities;
   
   
2. $9 million for natural resource damages to fund natural resource restoration projects;
   
   
3. $15 million to fund water quality projects;
   
   
4. $7.4 million in penalties, natural resource damage assessment, and litigation costs.

The agreement includes a $1.3 million credit to Unocal for monies paid to the County of San Luis Obispo under a related criminal settlement reached in 1994.

The state agencies involved in investigation and settlement negotiations include Cal/EPA's Central Coast Regional Water Quality Control Board, Department of Toxic Substances Control, Department of Fish and Game's Office of Oil Spill Prevention and Response, Coastal Conservancy, and the Attorney General's Office.

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1998 Releases | Archived Press Releases