Amplify Energy will pay Huntington Beach $5.25 million in oil spill settlement

Huntington Beach officials announced Monday morning the city will be receiving a $5.25-million settlement from Amplify Energy Corp. for the 2021 oil spill.

Mayor Gracey Van Der Mark, Councilmen Tony Strickland and Casey McKeon and City Atty. Michael Gates held a press conference at City Hall to herald their news.

“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 council members Dan Kalmick, Natalie Moser and Rhonda Bolton stepped to the podium to make statements. The microphone was cut as they refuted some of the previous comments made.

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

City public affairs manager Jennifer Carey said the press conference was over when the mayor stepped away from the podium, and it’s standard for the audio and video to 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 podium, Carey had no comment.

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

(Matt Szabo)

The settlement agreement with Amplify was finalized on Thursday and is signed by Gates, Huntington Beach interim city manager Eric Parra and Amplify President and chief 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 has, 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 will 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 due to the spill.

The controversial settlement agreement with Pacific Airshow LLC, released in full in July after Gina Clayton-Tarvin’s lawsuit against the city and Gates was successful, says the city would pay Pacific Airshow LLC 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)

Kalmick noted that the net amount the city receives will be less than $5.25 million because it needs to pay out attorney’s fees to the outside counsel. He added that he only received the Amplify settlement via email at 10:50 a.m. Monday, just 10 minutes before the press conference began.

“This is hiding the ball again in order to control the political narrative here,” Kalmick said. “It’s disingenuous.”

Gates and Van Der Mark, in turn, accused the council minority members who are up for reelection of playing politics just weeks before the election.

“They come to the podium because they’re running for reelection, not because they care about the city,” Gates said.

Added Van Der Mark: “I have never seen three council members so dead set on hurting the residents of Huntington Beach. This is the perfect example of three council members willing to burn down their own city just so they can roll over the ashes.”

Kalmick responded that everything that he and his colleagues said was factual, and not campaigning or politics. He also disputed McKeon’s assertion that the previous council had “unilaterally” canceled the air show without directives from other governmental agencies, a charge that then-Mayor Kim Carr has repeatedly denied and said was outside of her power.

In Huntington Beach, mayor is a largely ceremonial position.

“Everything they say is gaslighting,” Kalmick said of the council majority. “A class will be taught at Harvard one day as the master class on gaslighting that happens at every council meeting and every time they talk about us. It’s all projection.”

Huntington Beach Mayor Gracey Van Der Mark addresses the media during Monday’s press conference at City Hall.

(Matt Szabo)

Kalmick, Moser and Bolton introduced an agenda item at the Aug. 6 meeting seeking to determine the total cost of the airshow settlement, but it was voted down by the conservative majority.

Per general terms, that settlement agrees to give Pacific Airshow LLC $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 LLC, 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 another 30 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.

Gates said the settlement with Amplify was a win for the city.

“This is all political right now, but looking through that fog and that cloud of politics, this is a great day for the city of Huntington Beach, ladies and gentlemen,” he said.

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 he pipeline damage agreed to pay out $45 million.