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Greka on the hot seat
Back-to-back oil spills have inspired local, state, and federal attention to Greka Energy's record
BY SARAH E. THIEN

Date: 01/23/2008

Outraged critics of Greka Energy Corp. got their day in the court of public opinion, and Greka got the chance to defend itself, at a formal hearing before the Santa Barbara County Board of Supervisors this month.


Guys in green:
Greka employees look on as the company's lawyer Robert O'Brien tells the board about possible acts of sabotage committed against Greka. O' Brien spoke before the board of supervisors at their Jan. 15 hearing.
PHOTO BY SARAH E. THIEN
Two major oil spills in two months have focused attention on Greka from county officials, state agencies, and the federal Environmental Protection Agency (EPA).

The county weighed in on Jan. 15, when the Santa Barbara Board of Supervisors met to discuss Greka's past violations and the company's future in Santa Barbara County.

About 25 Greka employees came to the hearing in their green company jackets. They sat in the back of a packed room of concerned citizens, area landowners, and representatives from the various government agencies.

The county presented a report, as did the California Department of Fish and Game, the Santa Barbara County Fire Department, and the EPA. The facts were grim.

Altogether, large and small oil spills at Greka facilities in the county totaled 500,000 gallons from 2003 to 2007. Ultimately, the cost of Greka's spills since 1999 could add up to as much as $1.8 million for Santa Barbara County alone, according to county reports.

By comparison, Sierra Resources, which reported the second largest numbers of spills in Santa Barbara County, spilled 16,800 gallons during the same time period.

"I can tell you if you would take the time to look at the Greka leases and compare them to other operators, you're going to see a vast difference in the way they operate and maintain their businesses," Supervisor Joe Centeno said.

Supervisor Joni Gray had a question for Greka's attorney, Robert O'Brien, who testified on Greka's behalf at the hearing.

"This is a business question. Why would Greka not go vacuum up the spilled oil?" Gray asked.

"I'm sure if there was a way to get it and sell it," O'Brien replied, "the company would do so."

Greka's number of total gallons spilled is based on estimates the company provided to the county's fire department. Sources at the California Department of Fish and Game and the EPA assert that the real number could be much larger.

It also doesn't take into account the spills that occurred before 2003. The fire department has 400 releases on record for Greka since 1999. (The amounts spilled before 2003 were not available.)

The most recent spills in December and January together account for more than 144,000 gallons of a mixture of crude oil and processed water spilled in just two months--almost 30 percent of the total amount spilled since 2003.

"We need to get in there and do something," Supervisor Janet Wolf said at the hearing. "Bottom line, I'm very frustrated."

She wasn't the only one.


Cleanup:
Independent contractors hired by Greka to clean up the spill, took about a week to remove oil and sludge from the creek.
PHOTO BY STEVE E. MILLER
 Will there be a crackdown?

The hearing began with a report from Deputy County CEO Ron Cortez on proposals for tougher new ordinances on any oil company operating in the county.

The proposed new ordinances would include increased penalties and fees for oil facilities that require multiple inspections by government agencies. Companies also would be required to pay for the costs of more than three emergency responses to oil spills per year.

The board unanimously approved the recommendations and ordered county staff to do more research into implementing the new rules. The board is scheduled to meet again in March to review the proposals.

State Assemblyman Pedro Nava of Santa Barbara, who has spoken out against Greka since the December spill, said that he didn't think the board did enough to stop future spills.

"I'm actually very puzzled as to why the supervisors chose not to discuss or consider any of my suggestions," Nava said after the hearing.

A member of his staff presented Nava's suggestions at the meeting.

Nava's suggestions included: that Supervisors should receive, as publicly noticed agenda items, regular reports of spills, and that the county should create a website portal that would notify the public of spills.

Nava's staff also suggested that county supervisors should make landowners ultimately responsible for oil spills that happen on their property.

The board's recommendations, which did not incorporate any of those suggestions, followed testimony by county, state and federal employees, and also by Greka's lawyer.

Assistant Santa Barbara County Fire Chief Tom Franklin described the department's response to Greka's two major spills.

In the case of the first spill on Palmer Road on Dec. 7, Franklin said the flow of spilled oil over several hours could have been stopped sooner if Greka employees had been better able to deal with the emergency.

"Quite frankly, if the employees had been more familiar with the facility, they would have been able to shut it off sooner," Franklin said.

Josh Curtis, an environmental scientist with the state fish and game agency assigned to help oversee the cleanup of the two spills, said that Greka has been a difficult company to work with on these latest spills and also in the past.

"They're unwilling to spend the money necessary for cleanup," he said.

Curtis was on scene at the second large spill on Jan. 5 right before rains hit the Central Coast. He testified that he instructed Greka employees on the correct way to build a dam to stop the flow of oil down the creek in preparation for the rains that would come.

The dam was built incorrectly, Curtis said, and because of that, the distance covered by the spill nearly doubled when the dam broke.

The company should have hired a specialist immediately, he said.

"They waited until 1:30 or 2 p.m. that day to put in the call to a clean-up contractor, and only then because they were forced," Curtis said.

An expensive spill

Curtis works in the Department of Fish and Game Office of

Oil Spill Prevention and Response. Part of his job is to calculate how long it will take for an ecosystem to return to normal after an oil spill.

In an interview after the Jan. 15 hearing, Curtis said he responded to the scene of a spill by Greka in the same creek in 2005. His estimate for recovery time was two years.


Palmer Road:
The first major spill happened on Dec. 7 and spilled at least 58,674 gallons of oil and processed water into a creek next to Palmer Road in Los Alamos.
PHOTO BY STEVE E. MILLER
 "Just as that creek was recovering," Curtis said, "they spilled again."

The Department of Fish and Game is reimbursed by Greka to offset the amount of money the agency spends responding to spills, but the county of Santa Barbara is not reimbursed. That issue was brought up at the hearing.

According to the county's report, each time the county's fire department responds to any spill or other accidental release at Greka, county taxpayers have to pay the bill. Each hour the county fire department spends at a Greka site costs $450.

With more than 400 response calls since 1999, that equals at least $179,332.

That amount could increase tenfold, to $1.8 million, according to the county, once additional hours for cleanup oversight, research hours, associated meetings, and follow-up inspections are factored in to the expense.

Greka has paid fines in the past and continues to do so. EPA On-Scene Coordinator Robert Wise said that Greka was fined $1 million and is currently on probation until 2010 for disposing of contaminated water into wells.

The company was accused of threatening groundwater supplies and violating the federal Safe Drinking Water Act. The company was also cited in 2007 for making false statements to the EPA.

The EPA still is on the site of the January spill investigating the contamination of a county-owned building near the Greka facility.

"We've found some interesting things," Wise said.

Underneath the building, adjacent to the site of a Greka oil field, was a significant amount of oil, Wise said. The EPA tested the air quality inside the building and found it unsafe, he said.

In defense of Greka

Greka attorney O'Brien reiterated the company's earlier statement that sabotage was at fault during the last two spills. The attorney said the oil company also has been making improvements.

"Have there been violations in the past? Absolutely. Is Greka improving? Absolutely," O'Brien said.

Hong Kong-based Green Dragon Gas is the parent company of Greka.

O'Brien said Greka hired an independent investigator whose findings led the company to believe that the spills in December and January were caused by an outside party.

"You can talk about sabotage," Board of Supervisors Chairman Salud Carbajal told O'Brien at the hearing, but pointed out the hundreds of earlier spills. "Were those sabotage, too?" she asked.

O'Brien said the investigator determined that a phone line connecting to the alarm company was pulled out and a valve cover had been cut open, and that both actions led to the severity of the January spill.

He asked the county to approve the use of county sheriff's deputies to patrol Greka's facilities to prevent more acts of sabotage.

In response, Curtis, who was on scene after the spill, said that that even if the valve cover was cut, the oil would have spilled someplace else.

"Their containment was breached in another area," Curtis said.

O'Brien also testified that he didn't believe that it was a coincidence that the second spill spread onto property owned by Supervisor Brooks Firestone.

Firestone recused himself from the hearing because of that incident and also because his family owns land that contains a Greka lease. Firestone would not say how much money he makes from that lease.

Firestone had been scheduled to speak during the public comment period of the hearing, but did not appear.

"I had a couple of things that I wanted to say at the meeting, but I decided not to," Firestone said in an interview after the hearing.

Assemblyman Nava said Firestone might not be the only county official who owns land with oil leases. "You might want to ask the chairman why the board doesn't want the public to know who has leases with Greka," Nava said, but he did not elaborate.

Contact Staff Writer Sarah E. Thien at sthien@santamariasun.com.


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