For the first time in our nation’s history, an off-shore oil producer has agreed to put an end date to their its drilling in exchange for approval to develop untapped undersea oil reserves off the coast of Santa Barbara County.
Houston-based Plains Exploration & Production Co. – known as PXP – signed an agreement with local environmental groups last Thursday, effectively setting a date for the company to shut down its existing off-shore oil production decades before they had originally imagined. In addition, the agreement provides that PXP donate over 3,900 acres of land for public parkland, including 200 acres along Gaviota’s picturesque coastline.
Environmental Defense Center Chief Counsel Linda Krop said she was surprised by the agreement.
“This is unprecedented,” Krop said. “[This agreement] is going to put an end to off-shore oil drilling in Santa Barbara County.”
The agreement comes after nearly a year of negotiations between the oil producer and local environmental groups. The deal was designed so that PXP could capitalize on a long-stalled drilling proposal that would allow the oil producer to drill into state waters, which extend three miles off the coast.
The state of California has not permitted new drilling to occur in state waters for nearly four decades. Not surprisingly, this unofficial moratorium coincides with the Jan. 29, 1969 Santa Barbara oil spill – considered by many to have served as a catalyst for the modern environmental movement in the United States.
PXP Vice President Steve Rusch said that while it was PXP that originally approached the organizations, he was impressed by their willingness to work with PXP.
“PXP approached EDC and the environmental community and offered to address their concerns,” Rusch said. “Surprisingly, at least to me, they didn’t slam the door shut behind us as we left, but rather left it ajar… I have to say that I was impressed… most of all [with] their commitment despite the complete and absolutely foreign concept of support of an oil and gas project in Santa Barbara County.”
To reach the undersea oil field, known as the Tranquillon Ridge, PXP will petition the state, with the support of organizations such as Get Oil Out, the Citizens Planning Association and the EDC, to allow the use of “slant drilling” from one of their four platforms. These wells would tunnel 3,000 to 5,000 feet into the sea floor and then flatten out and reach as far as five miles to drain the reserves hidden beneath state land.
PXP wants to drill 22 wells using this slant-drilling technology from platform Irene, which lies 4.7 miles off the coast near Vandenberg Air Force Base. The Tranquillion Ridge could yield as much as 200 million barrels of oil and 50 billion cubic feet of natural gas. Existing pipelines would carry the oil and gas from Irene to a processing facility near Lompoc.
Before tapping into the reserves, the agreement must first gain the approval of county officials, the State Lands Commission, the California Coastal Commission and the federal Minerals Management Service – which is part of the Department of the Interior. Krop said she is confident that the agreement will make it through the state and federal review process.
“We think it will pass through,” Krop said. “We have a pretty environmentally minded Coastal Commission and State Lands Commission. The feedback I’ve been given is that they are thrilled and its passing is promising.”
Under the terms of the agreement, PXP will terminate its activities on platform Irene by the year 2022, at which time removal would begin. The agreement also states that PXP will shut down its three platforms off Point Arguello, as well as its Gaviota gas processing plant, by 2017. Since PXP does not own these three platforms – they are owned by the oil conglomerate Chevron – removal is not under their control.
PXP plans to donate 148 acres on the Gaviota Coast, near Gaviota State Park, and transfer about 1,000 acres north of Lompoc in the La Purisima Hills to the Trust for Public Land.
In addition, once the on-land facilities are no longer in use, PXP will donate the land to the Trust, which includes approximately 1,200 acres surrounding their Lompoc refinery and an additional 56 acres on the Gaviota Coast now used as a gas processing plant.
In total, the donated lands would equal 3,931 acres.
According to Krop, the EDC hopes that much of this land will be integrated into the State Park system, especially since both parcels lie near existing state parks.
PXP is not the first to try and develop the Tranquillon field. In 2002, Santa Barbara County rejected a similar proposal by Nuevo Energy Co., stating that it would extend the life of off-shore drilling in the Santa Barbara Channel.
Unable to develop off-shore energy, Nuevo sold platform Irene, along with its onshore processing facilities, to PXP in 2004. The Houston oil company acquired its three other platforms in 1999 from Chevron and Texaco.
Rusch attributes his company’s success at possibly gaining access to the restricted reserves to the creative approach PXP took.
“This is an unprecedented, historic, creative, innovative, out-of-the-box, or ball park, agreement that completely obliterates the paradigm that oil companies and environmentalists can never ever reach accord or agreement,” he said.