Was the Refugio Oil Spill a Result of Greed?

The Refugio oil spill caused not only the death of over 200 animals, but also a big “I told you so” for the environmentalist around US. The question is; could this have been prevented?

According to www.zacks.com, “The cause of the rupture has not yet been ascertained (June 12). However, in early May, federal regulators had found extensive external corrosion along some sections of the pipeline.” Which means that the company responsible for this pipeline, Plains All American, did know about this problem, but decided not to do anything about it.

By looking at Plains All American Income statement, we can see that the revenue for the first quarter (January - Mars) was reduced to almost 50% of last years earning.

Revenue Q1 (millions of dollars)

2015  2014  2013 2012

5,942 11,684 10,620 9,218

The net income was also reduced from 384 million to 284 million, a difference of over $100 million for the first quarters of 2014 and 2015. If Plain All American wanted to fix the corrosion problems, they could have done so with the income generated. But instead they had to pay $65 million to clean up (so far), which means 23% of Plains All American Pipelines net income for Q1 2015.

Plains spokesman Patrick Hodgins has since come out and defended its record to media by reiterating that Plains is one of the largest midstream operators in the nation, and operates substantially more pipeline than many other companies in the PHMSA database.

According to bizjournalz.com, As cleanup continues on the major oil leak in California, the Los Angeles Times reports that federal records show Plains Pipeline LP has had 175 safety and maintenance infractions since 2006.

This means that once every three weeks, Plains All American has a maintenance infraction. Not a good history.

I believe that profit and the avoidance of expenses has cost Plains All American in the long run, since they have only thought about reducing costs for that quarter. If ony companies could pay to prevent huge mistakes, the world would be a better place.

#refugiooilspill

Plains All American Pipeline - Website

Refugio Response Information Website