MSC and Cosco Sued for Negligence Causing California Pipeline Oil Leak

In the latest twist in the pipeline that leaked thousands of gallons of crude oil off the coast of Southern California, pipeline operator Amplify Energy filed suit in federal court charging the operators and crew of two containerships with gross negligence, liability, and failure to notify the company after their ships dragged their anchors damaging the pipeline nine months before the leak. The oil company also named the Marine Exchange of Southern California, which manages traffic in the area, in the suit saying it failed to direct the ships away from the pipeline and also to report the incident after it occurred in January 2021.

In October 2021, oil was spotted in the water near Huntington Beach, California near the Port of Long Beach. The U.S. Coast Guard with a unified command identified the source of the leak as an undersea pipeline operated by Amplify Energy carrying oil from offshore platforms to a terminal in Long Beach. The company was initially criticized for its slow response to the leak, but reports that it deployed upwards of 1,800 oil spill response contractors working with the Coast Guard’s Unified Command. More than 25,000 gallons of crude oil were thought to have leaked, requiring a three-month cleanup effort.

The subsequent investigation by the U.S. Coast Guard targeted several containerships before identifying the MSC Danit and the Cosco Beijing as likely having caused significant damage to the pipeline months earlier during a winter storm. After the leak was detected, underwater cameras and ROVs were sent to inspect the pipeline, which has been in place since 1980. According to the lawsuit, the inspection showed that a 4,000-foot section of the pipeline had been displaced by upwards of 100 feet on the ocean floor and that a concrete casing around the pipeline had been broken off. The U.S. Coast Guard said the displacement might have weakened the pipeline and made it more vulnerable to the elements.

“If these parties had not been grossly negligent and if the maritime notification laws had been observed in January 2021, this entire event could have been avoided,” Amplify said in announcing its lawsuit. “The pipeline would not have been displaced or damaged and thus would not have failed,” if the anchor dragging incident had been prevented by following rules which barred ships from the area and if the ships had headed to sea in advance of the storm.

The Marine Exchange of Southern California and USCG issued warnings of an approaching storm on January 25, 2021, and the company contends that more than 20 containerships left the San Pedro Bay anchorage for deep water. The MSC Danit and Cosco Beijing, however, decided to ride out the storm at anchor approximately 4.8 miles off the California coast. 

Winds reached 63 mph during the storm with waves up to 17 feet. Amplify writes in the legal complaint that AIS and radar shows that the MSC Danit began “moving erratically” for approximately three hours during the storm repeatedly crossing the area where the pipeline was located which is in a federally protected zone. Finally, the MSC Danit began raising its anchor reporting it was heading out to sea when Amplify contends the Cosco Beijing drifted into the same area also dragging its anchor and nearly colliding with the MSC vessel. The MSC Danit proceeded out to sea while the Cosco vessel remained at anchor.

In addition to accusing the ships and their crews of causing the damage by dragging their anchors, the oil company also highlights that neither ship reported the incident, nor did the Marine Exchange. “We would have immediately assessed the situation and made necessary repairs,” the company said if they had been notified, "Amplify said it would have immediately sent ROVs to inspect the pipeline and once detecting the deflection and damage would have suspended operations to undertake remedial actions."

Both shipping companies, the captains of the vessels and crews are accused of gross negligence and failing to file reports. Amplify is seeking punitive damage, reimbursement for the cost of the repairs, and lost revenues from MSC, Dordellas Finance Corp, (owners of the Cosco vessel) and Cosco. The oil company also charges that the Marine Exchange should have been aware of the anchor dragging and notified them immediately. They are seeking to require the Marine Exchange to notify companies of potential damage within 24 hours of an anchor dragging incident and for the Marine Exchange to block larger areas in the anchorage during potential bad weather to prevent damage to undersea property.

Amplify reports that it completed temporary repairs and drained the pipeline. In the next stage of repairs to the pipeline they plan to remove and replace the damaged section. The damaged piece will be given to the investigators so that they can examine it and gain a greater understanding to the damage and its causes.