On Sept. 24, Santa Barbara County may approve millions of new barrels of oil being pumped through its borders while it continues to face a multimillion dollar lawsuit.
At the board of supervisors meeting on Sept. 10, a hearing regarding the Tranquillon Ridge project proposed by Nuevo Energy Co., was postponed by two weeks. The project consists of 22 to 30 new wells for oil and gas production and transportation of the goods via the already existing Platform Irene off the coast of Lompoc. This project differs significantly from prior drilling proposals: For the first time in over three decades, Nuevo is seeking to drill in state rather than federal waters. At the same time, Nuevo is in a legal battle with the county over whether it has jurisdiction to accept or deny the project before it goes to the state level.
County, May They?
Mark Chaconas, assistant to 3rd District Supervisor Gail Marshall, said Nuevo must get approval for permits from the county before it can propose the Tranquillon Ridge project to the state for a lease.
“There is a three-mile line; Platform Irene is allowed to drill into the federal leases three miles and beyond,” he said. “There is an argument that the oil that is located in the state leases is draining slowly into the federal leases toward that oil well. They are requesting that the county allow them to drill into the state well and extend their reach.”
Steve Chase, director of the county’s energy division, said when his office and he were faced with the decision whether to recommend that the county accept the project, there were many issues at hand.
“Currently they’re drilling in the federal waters; they’ve been out there for about fifteen years. Now they simply want to go across the line into new state lease waters,” Chase said. “That lease, if it was to be issued, would be the first state lease issued since the Platform A blowout in 1969 that created our nation’s environmental movement. So there is a lot of sentimental value and a lot of hardened feelings, first of all.”
A Legacy of Oil Spills
The second issue, Chase said, is safety. Under the ownership of Nuevo, Platform Irene has had a dubious environmental record, having caused an oil spill in 1997. During that time, Nuevo had contracted out the operation of the platform to Torch Operating Co.
“In 1997, Torch had an oil spill at that platform [because] the pipeline grew corroded and it ruptured. The pipeline did exactly what it was supposed to do; it sent all kinds of warnings to the operators that something is wrong,” Chase said. “They overrode all of the warning systems and sent oil through the pipeline. Unfortunately that’s the oil that then was spilled. So, for those reasons, Santa Barbara County has a real heightened sense of safety and emergency operations when it comes to this company. And, to the full extent of the powers and authorities that we have, we are applying a set of inspection, monitoring and training standards that are either more extensive or more frequent than what the federal and the state agencies apply.”
“Well, they are questioning and challenging us in court as to our legal authority to do that. Since they’re challenging us in court as to our legal authority, and ultimately said that if they win in court, we won’t have the authority to have heightened safety inspections, monitoring and training,” Chase said. “Therefore, given that situation, the energy division – under my leadership – recommended denial. Only the second time in the history of the energy division, have we ever recommended denial. We’ve been around for almost two decades, which is a lot of projects.”
The county’s district attorney’s office filed a civil lawsuit against Nuevo after the 1997 spill because the operators of the platform violated key safety conditions when the warnings were sent to them.
Nuevo spokesperson Jim Bray said the current lawsuit against the county is not due to heightened safety measures the county wants to enforce, but rather it is intended to resolve the jurisdictional issue that also erupted from Platform Irene.
“One of the dilemmas we were caught in [proceeding the 1997 oil spill] is you’ve got the federal authorities who have jurisdiction over platforms and federal waters, which Irene is [in], and the Department of Transportation, which is a federal agency that has jurisdiction over interstate pipelines, which is what the pipeline running from federal waters to onshore is,” he said. “So we were in a bit of a dilemma during that spill: Whose jurisdiction? Who’s in charge of this? Is it the county or the [federal government]? As part of the settlement of the lawsuit that the county brought against us, we settled for a million dollars, but we asked that the question of jurisdiction be held and presented to the court so a judge will make a decision of who has jurisdiction.”
Who’s in Charge?
The county permits referred to in the jurisdictional lawsuit were issued to the prior owner of Platform Irene: Unicol.
“What’s been implied from the county’s position is that because Nuevo accepted the permit from Unicol, which built the platform, and we bought it from them, and Unicol apparently waived [the condition that the county not have jurisdiction] in their pipeline permit,” Bray said. “[Therefore], we waived it when we accepted the permit when we purchased the facilities, and basically what we’re asking the court is, can you waive that right? Can you waive a jurisdictional issue? Do we have the authority to say Santa Barbara County has overreaching authority into federal issues? Do we have that authority? We don’t think we do. This was all placed before the court to make a ruling on who has jurisdiction on an interstate pipeline and a platform that’s in federal waters.”
Disaster or Windfall?
Marshall said that among her concerns about the project are the 13 Class One impacts that the Environmental Impact Report (EIR) has listed. Class One impacts are unmitigable impacts that will result if the project is accepted.
“These are the people and this is the same pipeline that erupted in 1997 and spoiled forty miles of beach in the Lompoc area, including surf beach. It is also the same company that has been suing the county over our jurisdiction, over our ability to enforce our conditions,” Marshall said. “I’m not feeling real thrilled about this project and I’m real concerned about the age of the equipment.”
Bray said there are many positive impacts if the project does go through, including the estimated discovery of 200 million barrels of oil and 40 billion cubic feet of gas.
“The other thing is the revenue. For the first time, because of a change in the state law, Santa Barbara County would be able to enjoy oil royalty benefits from offshore production, which they have not been able to do before. And because of that, based on what we think is there … and based on a very conservative estimate, we estimate about $50 million in revenue for the county of Santa Barbara over the life of the project,” he said. “If the life of the project is 20 years, then divide that into twenty, but one thing about oil reservoirs is that they tend to produce prolifically the first five to ten years and then they slowly deplete. So you would see that revenue, most of it, up front in the first ten years. The other revenue, what we estimate to be about $250 million, would go to the state of California because it’s their lease.”
However, Marshall said she does not think that the county will financially benefit as well as Nuevo claims.
“I’m real concerned that they’re throwing around a lot of numbers; they’re saying fifty million dollars to the county over ten years,” she said. “Every time a new oil project has gone into Santa Barbara County, we’ve had these astronomical numbers on what kind of revenue is going to go to the county, and most of the time that never materializes. In addition to which, they are quoting seven million dollars in property tax revenue and, of course, my question to them on that was, ‘and you never appeal your taxes?’ … of course they always do.”
Suing Santa Barbara
Chase said the pending lawsuit filed by Nuevo played a role in the energy division’s decision to recommend a denial for the project.
“At the beginning of the public hearing process before we got to the planning commission in June, I would have said yes, but there is sort of a beauty of this democratic process; you’ll learn as you go, and some new thinking evolved out of the planning commission hearings. The new thinking was, ‘Hey, this new lease has landmark historic status,'” he said. “The second piece of information came from public testimony that said, ‘wait a minute this is the only oil company that has ever challenged the county’s authority, and the reason that all the other projects were approved is because all the rest of the companies agreed to the county’s heightened safety and heightened environmental standards.'”
Victor Tognazzini, a Santa Maria farmer and president of the Santa Barbara County Farm Bureau, said he is in opposition to the county’s current stance on the Tranquillon Ridge project.
“I just violently disagree with what the county has done. The planning commissioners have said, ‘We could approve this except that you have an appeal going against the county.’ An appeal is a constitutional right, and I think that the county would be well served to stand back and say let’s find out what the judge says,” he said. “If the judge says, ‘Well, we deny your appeal; this should be controlled by the county,’ then so be it; but if the judge says, ‘That’s in federal waters; the federal government should be the lead agency,’ the county still has control over what is in the county, and the Lompoc Oil and Gas [processing facility] and so forth. And I think that the county should accept that, but holding the lawsuit over Nuevo’s head is just wrong.”
Marshall said she wants to ensure the project will be conducted in a safe manner.
“Right now I don’t have a lot of trust in these people because they are suing us over the very things that they say they are going to do. They want the jurisdiction to go elsewhere, farther from the community so there’s not so much community input and so that they have more political pull,” she said. “When you get to the state and federal level, you lose local control, and what Santa Barbara County has always demanded is local control.”
Bray said the EIR concluded that the project was the environmentally superior alternative because the existing infrastructure would be utilized and no new platforms would be built.
“It’s not because of the tighter standards or regulations [that Nuevo is suing the county over]; basically, who’s in charge here and that’s what we have placed before the court and asked the court to make a ruling,” he said. “Typically, a county does not have jurisdiction over an interstate pipeline. It’s like saying you have a pipeline that runs from Arizona to California, and the California county that sits on that border wants to tell Arizona how to operate their pipelines. It’s a jurisdictional issue.”
Chase said the decision made at the Sept. 24 hearing will be extremely significant to both sides.
“They are running out of oil with the oil patch that they currently have offshore; they need this new oil patch, but they do not want the county to have heightened authority,” he said.