Friday, October 07, 2005

BOB (Or, "Big Oil...Bad!")

Oil is bad. It kills birds and seals and soils the beaches where it washes up after an oil spill. Big oil companies are worse. They're greedy, they cheat and manipulate and lie. All in pursuit of the Almighty Dollar. I mean, after all, who is it that brought us The War in Iraq?

A local SB county energy firm has come under investigation by the US Attorney's office in Los Angeles:

The U.S. Attorney's office is investigating possible criminal acts committed by Greka Energy in Santa Barbara County, according to court documents filed this week.

Attorneys for the federal law enforcement agency revealed their probe in a motion filed Wednesday in Superior Court in Santa Maria.

The document states that the federal government would not honor ”use-immunity“ granted to six potential witnesses in a civil suit filed by the county District Attorney's Office against the company.

If granted, use-immunity assures that testimony from a witness cannot be used against the person in a criminal case.

”The USAO hereby notifies the court and any interested parties to the state action that the USAO is currently investigating criminal charges against Greka Energy, the Santa Maria Refining Company and various individuals, and therefore does not intend to be bound by any grant of immunity offered by plaintiffs in the state action,“ Assistant U.S. Attorney Dorothy Kim wrote.

The Santa Maria Refining Company is a subsidiary of Greka.

The U.S. Attorney's Office, which has an office in Los Angeles, has jurisdiction to enforce any alleged violations of federal law, including environmental measures such as the Federal Clean Air Act.

In anticipation of possible criminal charges, Greka officials have hired Los Angeles attorney Steve Cochran - best known locally for his work on the Michael Jackson criminal case - to represent the company.

”I have been retained by Greka in the federal matter,“ was all Cochran would say about the case when contacted Thursday.

Calls to several Greka officials were not returned.

Sounds pretty bad, don't it! What do we got here, price-gouging, fraud, market-manipulation?

No, not exactly. We're not talking Enron here. Seems that Greka is in violation of safety standards and other regulatory requirements: In a lawsuit filed last year, county prosecutors alleged that Greka has operated many of its onshore oil and gas facilities without permits and failed to repair and maintain deteriorating infrastructure likely to cause explosions and fires and the release of poisonous gas.

The suit also claimed that the company did not train or equip employees adequately, and failed to respond to an alert system designed to prevent an underground pipeline rupture.

Greka argues it is now in full compliance with safety regulations and denies ever posing a threat to public safety.

Sadly, such will likely find it's way into somebody's anti-Big-Oil talking points somewhere, no doubt. It will be yet another black-eye for the industry, something akin to the Kinder-Morgan pipeline rupture in Arizona two years ago. Something that the industry doesn't need.

To be sure, such infractions are serious and are rightfully treated as such. If true, the US is right to impose penalties on the firm and to gain assurances that the problems are resolved, never to occur again.

In today's environment, when gas is $3-a-gallon, when people are considering new development and enlargement of refining capacity in the US for the first time in decades, such a development is the last thing anybody needs.

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