Exxon Gets OK to Truck Crude Oil on California Highway -- Update

   By Dan Molinski 
 

Exxon Mobil Corp. (XOM) has been given permission to truck hundreds of thousands of barrels of crude oil on a scenic California highway after the oil was left stranded in storage tanks following a pipeline rupture last year.

"The approval is limited to trucking the total of approximately 425,000 barrels of oil currently in two storage tanks at the Exxon Mobil facility at Las Flores Canyon," Santa Barbara County said in a press release late Monday.

It said was only allowing Exxon to use crude tanker trucks on Highway 101, a move environmentalists had long opposed, "to mitigate the risks associated with long term storage of oil since the pipeline is expected to be inoperable for a prolonged period of time, in excess of at least six months."

Exxon, in an emailed statement Tuesday, expressed appreciation to Santa Barbara county, and said it "will continue to work closely with local officials as we prepare to safely remove inventory from our storage tanks."

In May 2015, a Plains All American Pipeline used by Exxon to haul some 30,000 barrels a day of crude suddenly burst due to corrosion, spilling a large amount of crude oil into the ocean and on beaches, killing wildlife.

That left Exxon with no way to get its crude oil to refineries and facing the prospect of halting production at its offshore California fields.

At that time, it asked the county for permission to use trucks to move its crude oil while the pipeline was being fixed. It said up to eight loaded oil-tanker trucks would use the 101 highway each hour, 24 hours a day, seven days a week. The county rejected that plan in June amid cheers from environmentalists, saying it didn't fit the county's "comprehensive plan."

Santa Barbara said in the press release that Exxon will begin moving the crude in about three weeks, and it will take up to six months to empty the tanks, at no more than 30 truck trips a day. Exxon won't be allowed to refill the tanks.

Write to Dan Molinski at [e-mail]

(END) Dow Jones Newswires

February 02, 2016 11:50 ET (16:50 GMT)

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