Huntington Beach settles with pipeline owner for $5.25 million in 2021 oil spill

Huntington Beach officials announced Monday that the city would be receiving a $5.25-million settlement from Amplify Energy Corp. for the 2021 spill of 25,000 gallons of crude.

The spill off the Orange County beach city damaged beaches and wetlands and killed scores of birds and fish. Houston-based Amplify owns the pipeline.

Last year, Amplify settled a class-action lawsuit with businesses and residents affected by the oil spill for $50 million. Additionally, the shipping companies linked to the cargo ships accused of causing the pipeline damage agreed to pay out $45 million.

Mayor Gracey Van Der Mark, Councilmembers Tony Strickland and Casey McKeon and City Atty. Michael Gates held a news conference at City Hall on Monday to herald their news of the latest settlement.

“We want to thank Amplify for working with the city to properly resolve this dispute,” Van Der Mark said. “It is great news for the city that we can now move forward and put these conflicts to rest.”

After they spoke, minority faction Councilmembers Dan Kalmick, Natalie Moser and Rhonda Bolton stepped to the lectern to make statements. The microphone was cut as they disputed some of the preceding comments.

The conservative majority then came back to the lectern, and the microphone went back on as they wrapped up the 45-minute news conference.

Huntington Beach’s council factions have a contentious relationship, and sparks have flown at a number of council meetings.

City public affairs manager Jennifer Carey said that the news conference was over when the mayor stepped away from the lectern and that it is standard for the audio and video feeds to be shut down at that time.

Asked why the microphone came back on later as Strickland and the conservative majority stepped back to the lectern, Carey had no comment.

Huntington Beach Councilmembers Natalie Moser, left, Dan Kalmick and Rhonda Bolton address the media at City Hall on Monday.

(Matt Szabo / Daily Pilot)

The settlement agreement with Amplify was finalized on Thursday and signed by Gates, Huntington Beach interim City Manager Eric Parra and Amplify President and Chief Executive Martyn Willsher.

“We did not create this mess, yet we have been taking all of the abuse while we’ve been cleaning up the mess that was created,” said McKeon, who was elected with Van Der Mark, Strickland and Mayor Pro Tem Pat Burns in 2022. “The previous City Council took a pass on solving this problem and didn’t fulfill their fiduciary responsibilities. With today’s result, we have successfully resolved this conflict and made the city whole.”

Kalmick, Moser and Bolton, who are running for reelection this fall, said they were not presented all of the information that the current council had, though they were limited as to what they could disclose because of closed session rules. The previous council did not pursue litigation against Amplify.

“Why is this being announced right before the election?” Bolton said. “We’ve had outside counsel for nearly two years, and it did not take two years to do this.”

The settlement states that Huntington Beach and Amplify participated in mediation sessions on July 15 and Sept. 16 of this year. The statute of limitations to file a lawsuit against Amplify — three years — came up a couple of weeks ago, but Gates said the parties decided to handle the matter prior to litigation.

Gates said all of the money would go to the city. It will not have to share it with Pacific Airshow LLC, which saw the final day of its 2021 air show canceled because of the spill.

The controversial settlement agreement with Pacific Airshow says the city will pay Pacific Airshow up to $2 million of money recovered that was attributable to damages that the air show sustained. But Gates explained that negotiations with Amplify were based on the city’s damages and no one else’s.

“There will be no sharing, there will be no contribution, there will be no claims to this $5.25 million,” he said. “This is to the city exclusively.”

A U.S. Air Force Thunderbird flies over the Huntington Beach Pier during the first day of the annual Pacific Airshow on Oct. 4.

(James Carbone)

The settlement with Pacific Airshow, per general terms, agrees to give the company $4.99 million over a six-year period, as well as waiving or refunding fees for the shows from 2021 to 2023.

The city has no long-term contract with Pacific Airshow, but that settlement also gives it the exclusive right to host a show in Huntington Beach at least once a year for a decade, with the option to renew that right for up to 30 more years.

A state audit of the air show settlement, approved by the California Joint Legislative Audit Committee in May, is listed as on hold pending litigation on the California state auditor’s website.