Monday, April 21, 2008

County approves offshore oil drilling


The Santa Barbara County Planning Commission yesterday approved an offshore oil drilling project that could extract hundreds of millions of barrels of oil over the next 14 years from an area called the Tranquillon Ridge field near Lompoc.
The commission’s approval of the project came 10 days after the Environmental Defense Center and Plains Exploration and Production Company (PXP) reached a rare compromise, in which the two camps agreed on the length of time the company will be permitted to drill.

At the heart of the agreement, which included the environmental groups Get Oil Out! and Citizens Planning Association was a pledge by PXP to cease drilling operations in the Tranquillon Ridge and other nearby offshore and onshore facilities by 2022 — a significantly shorter amount of time than originally proposed.
First District Planning Commissioner Michael Cooney said having and endpoint in sight was the key to his vote.
“It was central to my approval,” he said. “I felt very strongly that it needed to have that ingredient involved.”
Another element that prompted the commission’s favorable vote, which was 4-0 with Commissioner Daniel Blough abstaining, was a pledge by the company to reduce and offset its greenhouse gas emissions. Officials at PXP said the drilling operations will undergo regular audits from the County’s Air Pollution Control District. It will also provide the county $1.5 million to reduce pollution throughout the area.
Under the agreement, operations at Platform Irene, which will be the epicenter for Tranquillon Ridge drilling, will end in 2022 and three other offshore platforms off Point Conception and an oil production facility near Gaviota will be terminated in 2017.
PXP already pumps roughly 8,300 barrels of oil from Platform Irene each day and with Tranquillon Ridge, could pump an additional 30,000 barrels at peak production. The current oil is pumped from wells in federal water as part of the Pt. Pedernales field.
The Tranquillon Ridge project will include drilling 17 new wells over the next several years that will tap into the generally oil-rich area, which is located just off the coast from Vandenberg Air Force Base in state water.
With environmental groups backing the project, the only ones left to oppose it at yesterday’s meeting were oil companies such as Exxon Mobil Corp., which insisted it could cut into the area’s oil reserves more efficiently by constructing onshore facilities on Air Force owned land.
Cooney called the role reversal “surreal,” and said Exxon Mobil’s request for a delay of the hearing to allow them to put a drilling proposal together wasn’t appealing because of the concessions made by PXP. Two other oil companies, Sunset Exploration and Vaquero Energy Inc. also opposed PXP’s project.
“We have a bird in the hand and that’s better than two in the bush,” Cooney said, explaining that PXP believes they can get approval from the State Lands Commission and California Coastal Commission and begin drilling sooner than later with an agreed ending point, while Exxon Mobil would have to start from square one.
Attempts to reach representatives from Exxon Mobil for comment were unsuccessful. The company has 10 days to file an appeal before the Board of Supervisors.
An effort in 2002 by a company called Torch/Nuevo Energy to drill in the Tranquillon Ridge area was denied by the county, which sited concerns over the structural integrity of the platform and its pipelines.
Shortly after that denial, Cooney said PXP purchased the various sites and has spent that time improving infrastructure and building relationships with environmental groups, which are traditionally vehemently opposed to additional offshore drilling.
While its safe to say Cooney is less than thrilled there will be additional offshore drilling, he said the decision wasn’t difficult when taking into account PXP’s current lease with the state and federal governments that allow the company to drill indefinitely.
PXP’s original proposal wasn’t much better, Cooney said. It would have extended the life of the facilities involved with drilling at Tranquillon Ridge by 30 years.
For Fourth District Commissioner Joe Valencia, whose district includes much of Vandenberg and the onshore sites involved, PXP’s agreement with the environmental groups were fine and well, but he said the monetary benefits to the county are what drove his decision.
“I hope that they find oil and I hope it works well,” he said. “If we have some oil let’s get it out.”
If oil is found in the Tranquillon Ridge, it will have an economic impact on the county, but at this stage it’s nearly impossible to predict what that amount will be.
Doug Anthony, deputy director of the County’s Energy Division, said the county usually gets 1 percent of the royalties oil companies are required to give to the state.
He said without knowing how much oil is there, the value of the oil when its pumped from the ground and the royalty rate, the economic benefit to the county will likely be unknown for years.
With all of the praise for PXP’s project, there are still a slew of environmental impacts that remain.
In all, there are 11 “significant and unavoidable” class 1 environmental impacts, 15 “significant but mitigable” class 2 impacts and several other “adverse but not significant” class 3 impacts, according to the project’s environmental impact report.
At the top of that list is the likelihood of a marine oil spill as a result of a pipeline rupture, which would increase from its current level of 0.6 percent to 9.7 percent. Over the lifetime of the project the possibility of a leak, rupture or other incident at either an offshore or onshore facility would increases from 5.4 percent to 11 percent. The magnitude of such a spill would also increase, from 2,913 barrels to 7,926 barrels if drilling occurs at the proposed level.
David Landecker, executive director of Environmental Defense Center, said he approved of the commission’s vote.
“We’re happy that the planning commission approved it,” he said. “It’s really a good deal.”
Landecker said if PXP can get the Environmental Defense Center on its side, he doesn’t think they’ll have a hard time getting the State Lands Commission and Coastal Commission on board as well.
“I think the odds are very good that as each of the decision makers look at this they’ll say this is a good deal for the rest of Santa Barbara County,” he said. “It’s a good deal for citizens and it produces oil.”

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