A Long-Buried Oil Spill Casts Beach Town Adrift : Pollution: Unocal is removing tainted soil from Avila Beach, but business district may go with it.

All Mike Rudd wanted to do was build a commercial building in the heart of this quaint, dilapidated beach town. But when he struck oil, his hope of revitalizing the town was doomed.

Rudd, the owner of an Avila Beach bikini shop, discovered oil that had leaked for decades from Unocal Corp. pipelines running under the main street of town. As it turned out, more than 22,000 gallons of crude oil, diesel fuel and gasoline had quietly contaminated the soil and ground water beneath the business district of this seaside haven, eight miles south of San Luis Obispo.

Unocal, whose hilltop tank farm looms over Avila Beach like a medieval castle, bought Rudd’s land and began cleaning up the spill. The oil giant acknowledges responsibility for the spill, which it knew of as far back as 1977, but predicts that it will be at least five years and perhaps far longer before the mess under the town and its popular beach is finally cleaned up.

“They knew oil was seeping down here and they didn’t say anything to anybody,” Rudd said as he looked out on his old property, fenced and vacant. “The thing that makes me the most mad is they haven’t done anything about it.”

The spill has brought commercial development and real estate transactions to a virtual standstill because banks will not lend money on the contaminated property. Some townspeople worry that the spill may pose a health risk, although Unocal and health officials say there is no known danger.

Worse yet, complete decontamination confronts the town with perhaps the ultimate irony: Local merchants fear that the most thorough cleanup--removal of the tainted soil--could mean demolition of the four-block business district and the destruction of their livelihoods.

“It’s basically killed the town is what it’s done,” said Jim Cumming, owner of the Avila Pizza Pantry, half a block from the beach. “The only way to clean it up is to dig up the whole town.”

For Unocal, the contamination at Avila Beach is yet another black mark on its record of operations on the Central Coast. In March, the Los Angeles-based company disclosed that it was responsible for the largest oil spill in state history: as much as 8.5 million gallons of petroleum thinner that leaked into the ocean and ground water from pipes at its Guadalupe oil field, 15 miles south of Avila Beach.

Throughout California, state officials say, leaks from underground pipelines have come to pose a major oil pollution threat, causing spills on land, in creeks and rivers, and in the ocean.

“It’s a big problem because what you’ve got is a very antiquated infrastructure of pipelines in California and they’re not holding,” said Steve Sawyer, an attorney with the state Office of Oil Spill Prevention and Response. “We’re dealing with pipes that have been buried for 40 or 50 years. After a while, corrosion sets in and you get breaks.”

Responsibility for monitoring more than 8,000 miles of buried petroleum pipelines is divided among various state agencies, and some leaks go undetected or unreported for years. State officials cannot say for sure how many pipeline breaks occur, but estimate that there are hundred of leaks, large and small, each year.

Just since January, 1993, more than 800,000 gallons of petroleum products have spilled from ruptured pipelines into such sensitive locations as the Santa Clara River near Valencia, McGrath Lake near Oxnard, School Canyon Creek in Ventura and Grapevine Creek near Ft. Tejon.

There also have been major pipeline breaks in residential areas, including a 1989 gasoline leak that exploded and killed two people in San Bernardino and a 1988 rupture that spilled more than 130,000 gallons of oil onto city streets in Encino and Sherman Oaks.

This month, Gov. Pete Wilson signed a bill that would strengthen inspection and reporting requirements for underground pipelines.

State Resources Secretary Douglas Wheeler, concerned that the state’s aging network of pipelines will lead to further catastrophes, said he will seek additional measures to improve spill prevention and emergency response to land-based oil spills.

“There is a growing awareness of the seriousness of the environmental risk,” Wheeler said. “We have only more of these incidents to expect. We have to be better equipped to predict them and, when they do occur, be better prepared to deal with the effects of a rupture.”

The town of Avila Beach, with a population of just over 1,000, has long been dominated by the oil operations that surround it.

The tank farm on the hill above town is nearly a century old and was acquired by Unocal in 1906--in a card game, according to local legend. At the other end of town, the company built a pier where it loads and unloads petroleum products on tanker ships.

More than a dozen pipelines run under Front Street--the main street of town--from the pier to the tanks. Five of them are still active, pumping crude oil and refined products back and forth for storage and distribution. Other pipelines also deliver crude oil from the San Joaquin Valley to the huge tanks and to a refinery down the coast.

In the early 1980s, Avila Beach was a bastion of resistance to construction of the Diablo Canyon nuclear power plant seven miles away. Now, residents ruefully note that they have become victims of fossil fuels, not atomic energy.

The town seems to be stuck in a 1950s time warp where strip malls and fast-food joints have yet to arrive.

A few new houses have been built on the hill above town, but Front Street has hardly changed in four decades. One-story, flat-roofed buildings, separated by vacant lots, line one side of the street across from the wide sandy beach and fishing pier.

A chronic water shortage has allowed little growth, and the town’s last commercial building was constructed in 1963.

“It’s one of the last, if not the last, unspoiled beach towns in California,” said Nancy Argo, who runs a beachwear store on Front Street with her husband. “It’s not Carmel. It’s not Newport Beach. Time has stood still here.”

Hoping to bring modest improvement to the commercial strip, the citizens of Avila Beach arranged last year to buy water from the state, ending years of a building moratorium.

They quickly learned, however, that oil contamination, not water shortages, would spoil growth plans.

Jim Bray, a spokesman for Unocal, said it is difficult to determine when pipes under Front Street began leaking or even how much fluid seeped out. “It was leaking for some time,” he said. “No one knows for sure how long.”

But Bray said the breaks occurred before the mid-1970s, spilling an estimated 15,000 gallons of diesel, 7,000 gallons of gasoline and an unknown amount of crude oil. The plume of contamination extends well under the beach and fishing pier, but apparently has not seeped into the ocean.

The problem came to light in 1977, when petroleum fumes collected in the basement of a building on Front Street and exploded. At the time, Unocal fixed a pipeline leak and installed an underground wall to hold back future seepage but did not attempt to clean up contaminated soil.

“My understanding is that it was brought to our attention in 1977,” Unocal spokeswoman Terry Covington said. “At that point, there was a barrier wall put in to protect Front Street from the contaminated area. Obviously, that wasn’t sufficient.”

It was not until 1989, when Rudd began to develop his nearby property, that the problem resurfaced. This time, the extent of the contamination became public and Unocal promised to clean up the spill.

“I think it’s a crying shame Unocal can do this to just ordinary people,” Rudd said angrily. “I wouldn’t buy a gallon of Union Oil gasoline if I was dying. I don’t think anyone who comes to Avila Beach should ever buy another gallon of Union Oil gasoline.”

Bray, however, noted that the company did not take action sooner because today’s standards are much different from those of the 1970s.

“At the time, no one thought there was a wider problem than the immediate leak at the site,” he said. “Environmental laws and the way of doing business have changed a lot in the last 15 years.”

Avoiding a potential lawsuit, Unocal bought Rudd’s property for more than $500,000. Today, the choice land across from the fishing pier is empty except for wells that monitor the seepage.

Unocal officials say they have undertaken a long-term effort they believe can clean up the contamination without requiring the removal of any buildings or unduly disrupting the town.

The company installed a permanent vapor recovery pipeline under Front Street in 1992 to capture underground gases from the spill and pipe them up to the tank farm, where they are burned.

In addition, Unocal began a program of “bioremediation”--aerating the soil so that bacteria naturally present in the ground would consume the spill at a faster rate. Bray estimated that the bioremediation will take at least until 1999, and possibly much longer, to clean the site.

The oil company has also offered to guarantee loans for property owners who want to develop, refinance or sell their property, but no such transactions have been completed.

More important, Unocal has quietly begun purchasing and leasing contaminated property on Front Street, including buying the well-known Avila Grocery and Deli.

Officials at the Regional Water Quality Control Board, which oversees the cleanup, say they were not notified of any spill at Avila Beach until 1989 and are not satisfied with the pace of the cleanup since that time. “There haven’t been any aggressive methods of removal,” said senior engineer Robert Baldridge.

Earlier this month, the board voted to set a cleanup standard for Avila Beach that is far stricter than the 100-parts-per-million threshold used until now by Unocal. In ground water, for example, the board set a limit of 1 part per billion for benzene and 1 part per million for total petroleum hydrocarbons.

Evelyn Delany, chairwoman of the San Luis Obispo County Board of Supervisors, believes that tougher standard will compel Unocal to seek a more drastic solution--decontaminating the town by excavating tons of tainted soil, up to 15 feet deep. Most of the buildings that sit over the contamination could be saved, she said, but some might have to be destroyed.

“I think ultimately they’re going to have to dig out the contaminated dirt and dispose of it properly, or clean it, and fill the town with clean dirt,” the supervisor said. “Some of the buildings can be jacked up and held in place while they are removing the dirt and putting in new dirt. I think demolition would be a last resort.”

Massive excavation, causing disruption of the entire commercial area and loss of business, is exactly what some residents fear will be needed.

“They’re going to have to clean it up and it’s going to put me out of business. They’re going to have to bulldoze,” said Micki Sue Leister, who owns a beachwear shop and food concessions on Front Street.

The anger is widespread.

“They have a way of losing a lot of petroleum products and not telling anybody,” said Cumming, who had hoped to build a small motel next to his pizza restaurant. “They’ve been working on (the cleanup) for five years and basically gotten nowhere. They’re buying up the town but that’s no solution to the problem.”

Others complain that word of the spill and frequent work by Unocal tearing up Front Street for the vapor recovery system have combined to hurt business.

“Avila Beach used to be a paradise,” said Bill Price, owner of a Front Street beachwear store. “We don’t have crime. We don’t have stoplights. But we do have contamination.”

Slow Spill

Crude oil, diesel fuel and gasoline that leaked from Unocal Corp. pipes prior to the mid-1970s have saturated the soil under Avila Beach’s main commercial street and its popular beach. This map shows the most contaminated areas.