New deal in Huntington Beach oil spill boosts payout to locals to $95 million

About 10,000 people and businesses harmed by the 2021 oil spill off the coast of Huntington Beach – a group that includes local fishermen, tourism companies and some homeowners – will split an additional $45 million in damages, bringing their total to $95 million according to a proposed legal settlement announced Thursday, Feb. 9.

The new deal involves nine companies that own or insure two cargo ships, the MV Beijing and the MSC Danit, that dragged anchors over the underwater pipeline during a storm about 10 months prior to the spill. Last October, lawyers announced a separate settlement in which Amplify Energy, owner of the pipeline, agreed to pay $50 million to people who lost money because of the spill.

The agreement with the shipping companies marks the first time any entity other than Amplify has shared financial responsibility for the 25,000-gallon spill. Last year, Amplify pleaded guilty to a criminal charge related to its response to the spill and agreed to pay for cleanup and damages.

Wylie Aitken, a Santa Ana attorney representing locals harmed by the spill, said that while Amplify and the shipping companies are likely to continue a separate court battle over how much responsibility each bears for the spill, the people and businesses that lost money can enter a different phase of the fight.

“This is no longer an issue for our citizens. They’ll be receiving their compensation, and hopefully exiting this process as soon as possible,” Aitken said.

The next step will be for the court to give final approval to the new agreement, something that could happen by spring. After that, an independent company will be hired to identify everybody who qualifies for compensation and to establish a schedule for payouts. People who believe they are owed money can file a claim via the website by June 9.

Aitken didn’t know how long the payout process might take. He did say any money that goes unclaimed will be allocated to an as-yet unidentified non-profit group, or groups, “connected with the coast.”

Though the spill turned out to be much smaller than early estimates from the Coast Guard and others, its financial impact was vast. Fishermen and lobstermen weren’t allowed in the water for weeks, and what they did catch later in the season was sold for less, or harder to move, because fish buyers were wary of contamination. Likewise, tourism in the region fell, meaning less money for everybody from hotel owners to surf instructors. And some beachfront homeowners suffered because of strong odors from the spill and because cleanup on the coast went on for several months.

Though it’s unclear how the new pool of $45 million will be allotted, the earlier $50 million deal is set to give $34 million to people connected to the fishing industry, $9 million to homeowners and $7 million to tour operators and others. That money will be paid after victims have been identified.

The new deal supports a longstanding claim from Amplify and others that commercial ships damaged the pipeline months before oil started flowing flowing into the ocean off the coast of Huntington Beach. It’s also just the latest twist in a saga that has included national news coverage, misinformation about the scope of the spill, a coastal cleanup involving nearly 2,000 people, and the criminal plea from Amplify.

In early 2021 the Beijing and the MSC Danit were anchored off the coast of Huntington Beach, two of dozens of vessels unable to get into the ports of Long Beach and Los Angeles because of a post-pandemic cargo glut that was affecting shipping around the world. Investigators later determined that during a windy storm on Jan. 25, both ships dragged anchors over the pipeline, moving it about 100 feet. Neither ship reported that event to the Coast Guard.

Field technician Chris Larios with Patriot Environmental shows a tar ball his team collected in Laguna Beach near Anita Street on Sunday, November 6, 2022. The tar is from last year’s oil spill. (Photo by Mindy Schauer, Orange County Register/SCNG)

Months later, around 4 p.m. on Oct. 1 – as residents from Huntington Beach to Irvine were reporting strong petroleum smells in their neighborhoods, pipeline workers heard an alarm warning of a possible oil leak. They did not report that to authorities and, instead, began a series of tests to see if oil was actually spilling. They closed the pipeline around 6 a.m. on Oct. 2 and notified the Coast Guard of the leak about 9 a.m., roughly 13 hours and eight alarms after the initial warning.

The leak became public during the second day of the Pacific Airshow, an event that typically draws tens of thousands of people to the sand in Huntington Beach. The show’s final day, Oct. 3, was canceled.

The location and the crowd also prompted national news crews to offer reports from the beach, many basing their coverage on early estimates that the spill was as big as 300,000 gallons.

Though the spill was found to be much smaller, oil eventually did flow into local marshes and other environmentally sensitive areas. Beaches were closed or restricted for several days and tar balls were found as south as Del Mar.

As part of its plea deal, Amplify agreed to pay a fine of about $7 million over three years and to reimburse almost $6 million to government agencies, pending court approval of the agreement. Last year, the company also paid nearly $1 million to the county to cover its costs related to the cleanup.

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