Santa Maria oil company ordered to pay $65 million judgement

March 6, 2023

By KAREN VELIE

A federal court last week ordered a Santa Maria based oil company to pay $65 million for gross negligence to the United States and California.

On March 2, the U.S. District Court for the Central District of California entered a final judgment against HVI Cat Canyon, formerly known as Greka Oil & Gas. The civil suit brought on behalf of the U.S. Environmental Protection Agency (EPA), the U.S. Coast Guard, the California Department of Fish and Wildlife, and the Regional Water Quality Control Board.

The United States and California filed the suit alleging that HVI Cat Canyon, which previously owned and operated multiple oil and gas production facilities in Santa Barbara County,  was liable for:

• 12 oil spills into waters of the United States in violation of the Clean Water Act
• 17 oil spills into waters of the state in violation of state law
• Reimbursement of the federal and state governments’ costs of cleaning up the oil spills
• Natural resource damages under state law for harm to fish, plant, bird, or animal life and habitat
• Numerous violations of federal oil pollution prevention regulations identified in 16 EPA inspections across 11 facilities

The court’s judgment follows an earlier 65-page opinion dated Feb. 25, in which the court awarded the United States and California the full amount of civil penalties, response costs, and damages that they sought at trial.

“We applaud the court’s decision to hold HVI Cat Canyon responsible for the full extent of the harm they caused,” said Assistant Attorney General Todd Kim of the Justice Department’s Environmental and Natural Resources Division. “This outcome is a prime example of strong federal and state partnership and persistence in pursuing justice against a company that long flouted its compliance obligations.”

“HVI Cat Canyon, formerly GREKA, is being held accountable in their long history of multiple violations and on-going non-compliance across many agencies,” said Regional Water Board Chair Jane Gray. “This judgment is a testament to the multi-year efforts of agencies and the legal system’s ability to provide justice for egregious actions perpetrated against the environment.”

The court found that the 12 spills into waters of the United States, which occurred from 2005 through 2010, resulted from HVI Cat Canyon’s gross negligence.

“Based on the totality of the circumstances, the spills evinced a pattern of reckless disregard for good oilfield industry practices, and a series of negligent acts or omissions by HVI concerning oil spill prevention, and pipeline and facility inspection and maintenance,” the court wrote.

In total, the court found that the spills had discharged approximately 26,584 barrels of crude oil and produced water, a briny waste by-product of oil production. The court also ruled that HVI Cat Canyon had committed a total of 60 violations of the federal regulations at 11 facilities for a total of 86,842 days of violation.

Ultimately the court held HVI Cat Canyon liable to the United States for $40 million in civil penalties for the spills, $15 million in civil penalties for the violations of federal regulations, and $2.5 million in cleanup costs.  The court also held HVI Cat Canyon liable to California for $7.7 million in civil penalties and nearly $200,000 in natural resource damages and cleanup costs.