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State wins legal battle over controversial oil operation in Santa Barbara County

California Coastal Commission
The state has won a legal battle over its use of an oil facility once owned by a now bankrupt oil company in Santa Barbara County. The facility is being used to monitor, and safely dispose of dangerous gas from Platform Holly off the Goleta Coast.

Trustee for bankrupt oil company sued state, claiming company should be compensated for use of oil facility to help keep dangerous gas in check.

A court has rejected a claim by a trustee for a bankrupt oil company which sought more than $160 million dollars from the state in connection with some shuttered Santa Barbara County oil facilities.

After the Plains All American Pipeline ruptured on the Gaviota Coast in 2015, Venoco no longer had a way of getting oil from Platform Holly to oil refineries.

The company filed for bankruptcy, and the state was stuck with removing the platform, an onshore facility, and two old oil piers, The state needed to reactivate part of the Ellwood Onshore Oil Facility to monitor and treat dangerous gas still coming from the platform.

But, the trustees sued the state, saying it should pay the trust $161 million dollars for use of the facility. A Delaware bankruptcy court rejected the suit, saying Venoco created the problem, and the trust shouldn’t profit from it.

Lance Orozco has been News Director of KCLU since 2001, providing award-winning coverage of some of the biggest news events in the region, including the Thomas and Woolsey brush fires, the deadly Montecito debris flow, the Borderline Bar and Grill attack, and Ronald Reagan's funeral.