It could happen here

Waters off the Central Coast are recommended for oil drilling



Almost 40 years to the day after an offshore drilling platform near Santa Barbara malfunctioned, pouring millions of gallons of crude oil into the ocean and polluting 35 miles of coastline, the state’s offshore oil reserves were nearly opened for business again.

The Houston-based Plains Exploration and Production Company’s proposed foray into the Tranquillon Ridge oil field, just off the coast near Point Conception, would have been the first new drilling in California waters since the spill.

The deal would have allowed PXP to drill into state waters from an existing platform, located in federal waters. In return, the company promised to shut down four existing platforms and donate a substantial amount of land for preservation. Several local environmental groups brokered the deal, which was killed last month by the California State Lands Commission. Though scuttled for now, the unprecedented alliance between big oil and grassroots environmentalists may have foreshadowed a more radical mandate heading for waters off the coast of California.

On Jan. 16, in the literal last days of the Bush Administration, the Interior Department released a new energy plan recommending extensive drilling off the Central Coast, from the southern part of SLO County to Point Conception. Federal waters begin three nautical miles from the Golden State shores, and that’s where new drilling could happen—if the plan is approved.

And those inclined to think the waters are safe because Bush is out of office should think again: President Barack Obama has clearly said he’s open to offshore drilling, although he would like it to be part of an energy plan, not the plan. How that applies to the Central Coast is still unknown.

Obama’s new secretary of the interior, Ken Salazar, held a surprise press conference on Feb. 10 to address offshore drilling.

“Today,” Salazar began, “I am once again taking steps to change the way the Department of Interior does business.”

Salazar is slowing down the process set in motion by the Bush Administration, mainly by extending deadlines for public comment and seeking more information about offshore reserves, but in the end, offshore drilling is very much on the table.

Tupper Hall, a spokesperson for the Western States Petroleum Association, an advocacy group for big oil companies in California and five other western states, said his organization is taking the prospect seriously.

“It reflects a change in the national energy policy that is very significant,” Hall said. “It’s a natural and logical development, since the moratorium is lifted, to include those areas in a minerals management plan.”

One of President Bush’s last acts

It took more than a new energy policy to get to this point. Last summer, three major developments at the federal level opened a window for petroleum exploration off the coast. Rising oil prices served as the impetus, though the price spike resulted from futures trading, not an actual supply issue.

Nonetheless, the pressure was building. Central Coast residents were paying as much as $5 a gallon at the pump when President Bush decided to act. On July 14, calling for energy independence, Bush modified an executive order originally passed by his father. The change allowed oil exploration in several coastal areas previously considered off limits.

Around the same time, Bush called on the Department of the Interior to create a new five-year energy plan, even though the last five year plan was only a year or so old. Whereas the old plan was effective until 2012, the new plan—which includes drilling in Alaska, the Gulf of Mexico, and along both Atlantic and Pacific shores—can be implemented in 2010. The U.S. Minerals Management Service, which oversees the sale of oil and other resources to the private sector, estimates that the program could produce 10 billion barrels of oil and 45 trillion cubic feet of natural gas over 40 years.

“This is the last dying gasp of the Bush Administration,” California Assemblyman Pedro Nava said of the plan, “to give a gift to his friends, the oil companies.”

Yet it wasn’t just Republicans who opened the door to offshore drilling. The final barrier was removed on Sept. 30, 2008, when a Democrat-controlled Congress failed to renew the offshore drilling moratorium that had been in place for a quarter century.

Even public sentiment was changing. A poll conducted by the Public Policy Institute of California in July, when oil prices were soaring, revealed that 51 percent of Californians surveyed favored more drilling off the California coast.

CAPPS ON OIL :  U.S. Rep. Lois Capps represents much of the coast spanning Santa Barbara and San Luis Obispo counties. She praised Secretary of the Interior Ken Salazar for his Feb. 13 announcement for a “comprehensive energy plan for the U.S. Outer Continental Shelf.” - FILE PHOTO
  • File Photo
  • CAPPS ON OIL : U.S. Rep. Lois Capps represents much of the coast spanning Santa Barbara and San Luis Obispo counties. She praised Secretary of the Interior Ken Salazar for his Feb. 13 announcement for a “comprehensive energy plan for the U.S. Outer Continental Shelf.”
What lies beneath
Despite the new energy plan’s forward motion, Secretary of Interior Salazar called it part of “a process rigged to force hurried decisions, based on bad information.” No one knows quite how much oil and gas lies off the coasts. Even estimates for already-producing reserves change every year, often to reflect more oil than the year before.
On the West Coast, two regions are currently considered the richest in oil and gas reserves. Together, they hold an estimated 1.469 billion barrels of crude oil and 1.477 trillion cubic feet of natural gas. One region is the North Coast near Mendocino, Del Norte, and Humboldt counties.

The other is the Central Coast: an area that stretches from San Luis Obispo County to northern Ventura County.

Between the North Coast and the Central Coast territories, spreading from Bodega Bay to Morro Bay, lies a massive area protected by a trio of national marine sanctuaries: the Cordell Bank, the Gulf of Farallones, and the Monterey Bay. The whole stretch is still considered untouchable.

The Santa Maria Basin covers an area between south San Luis Obispo County and Point Conception. According to the U.S. Minerals Management Service, it holds about 586.5 million barrels of oil and 553.5 billion cubic feet of natural gas, which are considered “technically recoverable,” but still unproved as far as quality or actual volume of resources. Still, if all of the crude oil from the Santa Maria Basin were collected and turned into gasoline, it could fuel America’s cars for about 63 days by 2007 standards, according to the government’s Energy Information Administration.

And the Minerals Management Service considers such estimates to be conservative. Because of state and federal moratoriums, the fields off of California have never been thoroughly vetted. Also, the quality of oil in the Santa Barbara Channel isn’t typically gasoline grade. It ranges from 12 API (slightly less viscous than road tar) to 31 API (slightly more viscous than gasoline-grade crude oil.)

It may seem that all the barriers have been broken down, paving the way for drilling off the coast, but there are still several obstacles in the path of new platforms. The Minerals Management Service estimated that if the federal government sold leases to oil companies, it would still take between five and 10 years before any drilling started. Opponents of offshore drilling point to the delay, noting that opening up the shores last summer would have had no immediate effect on the price of a gallon of gas.

The coast is clear, for now

At least one California congressman—U.S. Rep. Mike Thompson, who represents the coveted North Coast—has already proposed legislation that would permanently ban drilling off his coastline. On the first day the 111th session of Congress met, before the Minerals Management Service even announced plans to drill in northern California, he moved to stop the forward motion.

“For the economic and biological health of our country, it’s critical that we permanently protect this unique area from the environmental hazards of offshore drilling,” he announced in a press release.

One reason the ban on offshore drilling lapsed so gently is that it never had much weight behind it. The “moratorium” was actually a decision made by every Congress of the previous 26 years to not fund new lease programs for offshore oil fields. There was no moratorium per se, just an intentional failure by a bipartisan Congress to provide specific funding during yearly appropriation hearings.

In the summer of 2008, Congress was unable to pass an appropriations bill for the Interior Department. To keep the system from grinding to a halt, funding was allocated based more or less on previous year’s budgets. That means funding essentially went into autopilot, and the lease program, which had previously been without funding, suddenly found some.

The sudden influx set off alarm bells in the environmental community, but not much happened until the Minerals Management Service released the draft energy plan. State Assemblyman Pedro Nava of Santa Barbara and Ventura counties cosponsored a resolution in the state Legislature asking Congress to pass a real moratorium on offshore drilling on the West Coast.

“Every year, I’ve authored resolutions expressing opposition to offshore drilling,” Nava said. “Every year, we ask Congress to pass a permanent resolution.”

Drilling supporters say new technology and better oversight will prevent a replay of the 1969 spill, but there are still plenty of reasons to approach offshore drilling with caution. A coastal zone consistency analysis provided by PXP stated unambiguously: “Increased activities offshore would increase the probability of a spill.” The report went on to state that greater volumes of oil yield bigger spills.
U.S. Rep. Lois Capps, who represents the coastal area spanning Santa Barbara and San Luis Obispo counties, has not made any official move to stop potential drilling, but her aides said she plans to introduce a bill in March that will be far more sweeping than Thompson’s.
“I have fought relentlessly to protect our sensitive coastal areas from new offshore drilling,” Capps said. “Drilling for oil is a dirty and dangerous business that won’t lower our energy costs or make us more energy independent; it merely facilitates our addiction to fossil fuels.”

Gov. Arnold Schwarzenegger also remains a stalwart opponent of new drilling.

OIL AND WATER :  This map shows oil and gas reserves off the Central Coast. This area—together with part of Northern California’s coast—is being considered for drilling. The dotted line running along the shore represents the boundary between state and federal waters, about three miles out. - IMAGE COURTESY OF DEPARTMENT OF INTERIOR/MINERALS MANAGEMENT SERVICE
  • OIL AND WATER : This map shows oil and gas reserves off the Central Coast. This area—together with part of Northern California’s coast—is being considered for drilling. The dotted line running along the shore represents the boundary between state and federal waters, about three miles out.
More history

Santa Barbara’s 1969 spill was catastrophic. Though it happened more than six miles off the coast, it managed to blanket 35 miles of coastline with goo.

The areas slated for drilling by today’s proposals straddle the boundary between state and federal waters—just three miles out.

California’s Coastal Sanctuary Act, a reaction to the Santa Barbara spill, keeps drilling out of state waters, with the exception of existing operations. The PXP plan was to slant drill from an existing platform into state waters. The State Lands Commission axed the proposal, saying there was no was no way to enforce a kill date that was part of the agreement, and it would have set a dangerous precedent implying that California was open to new drilling.

To open that box would release unknown consequences for California, though it wouldn’t yield a windfall in new taxes, because California is the only oil-producing state that doesn’t impose a severance fee for companies extracting an irreplaceable public natural resource. In other words, California just gives away oil.

In the Santa Maria Basin, there are already more than 40 oil leases between the federal government and companies that hope to drill for oil and natural gas there. Only a handful of the leases are active. The rest are stalled by lawsuits filed by the state. That’s been the case for years. Thus, although energy companies are poised to suck the oil out, offshore drilling in California has been standing still for some time.

Hall, of the Western States Petroleum Association, said he wouldn’t expect the state of California to just roll over on offshore drilling.

“Our industry is very aware that although the federal moratorium has been lifted, there remains a lot of resistance at the state level to offshore development,” he said.

Before the Central Coast could truly see more offshore oil drilling, several things have to happen:

• Stage one is a draft plan, which was completed on Jan 16. The plan is currently in a review period that will last until mid September.

• After review, the plan has to be re-introduced and go through another 60 days of congressional and presidential review. Next, it requires approval from the Secretary of the Interior.

• Finally, before any drilling can happen, there must be an environmental impact study, in accordance with the National Environmental Protection Act. Then there’s a separate process for each lease.

During his address, Salazar also called for a comprehensive report by the U.S. Geological Survey and the Minerals Management Service, which would compile all known information regarding offshore reserves. The plan is now being looked at in the context of a broader energy policy. Salazar certainly didn’t rule out offshore drilling, but he said he wants to see a more comprehensive approach to energy, including offshore wind, tidal, and wave power.

The plan is also the subject of several hearings before the Natural Resources Committee, on which Congresswoman Capps sits.

Capps issued a quick response to Salazar’s conference, calling it “an important step forward to meeting our nation’s energy needs while ensuring our most sensitive and economically vibrant coastal areas are protected for future generations.

“I’m pleased the Department will base its future leasing decisions on the strongest, most objective science available instead of campaign slogans, especially in areas that have previously been off limits to drilling for decades,” she wrote.

Salazar said he wants better information about what resources are out there, a proposition that worries many environmentalists, because it makes drilling for the fuel even easier in light of the next perceived energy crisis.

Yet even if the final plan does call for sweeping development off the Central Coast, the state could step in and the leases could go the way of the dozens of others in SLO and Santa Barbara counties: stalled out, stuck in the sticky California legal system. ∆

Contact staff writer Kylie Mendonca at [email protected].


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