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Like oil and water

Sentinel Peak's interests and the good of our county don't mix



Sentinel Peak Resources, the owner of the Arroyo Grande Oilfield (AGOF), is only looking out for itself and its shareholders. The Colorado-based company, which Houston's Quantum Energy Partners formed as an investment tool in 2016, is scrambling to oppose Measure G (which aims to ban fracking and oil well expansion in the county) by misleading the community in three significant ways.

First, they are positioning themselves as a large, long-term provider of jobs in the county. In "Conflicting visions" (July 12), Camillia Lanham reported that the field has "20-plus employees" and more than "100 contract workers in the county," but Sentinel Peak won't say how many of the contractors are county residents or what the average employee salary is. Those jobs pale in comparison to the 20,645 jobs that agriculture supplies in San Luis Obispo County.

Sentinel Peak threatens that Measure G would eliminate these jobs by preventing the oil field's expansion. The irony here is that even they admit there is a finite amount of oil left in AGOF. Both Christine Halley, Sentinel Peak's director of environmental safety and hazards, and California's Division of Oil, Gas, and Geothermal Resources (DOGGR) estimate that the field contains about 25 years of reserves.

Given the finite amount of oil in the field, if Sentinel Peak is allowed to drill 450 new wells on top of the current 185 active wells, the field's employees risk losing their jobs long before 25 years are out. Halley tries to dance around this reality in "Conflicting visions" where the article notes that she "declines to mention specifics about how quickly oil reserves would be depleted should the company intensify its operations," and instead Halley offers this audaciously vague statement: "With ongoing love, it could be ongoing."

Another important point that seems to be lost in the din is that Section 6 of Measure G gives the county Board of Supervisors the power to approve exemptions to the drilling ban for certain projects. Ultimately, Measure G is the safeguard we desperately need against Big Oil's propensity for boom and bust cycles: by moderating the extraction of a finite amount of oil, we extend the amount of time the oil field is operating and contributing jobs and tax revenue to the county.

The second way Sentinel Peak is misleading the community is about where the oil is being used. Halley boasts that the field produces 1,500 barrels per day (bpd) of oil, which she says represents about 15 percent of what the county consumes on a daily basis. But that oil does not stay in our county. According to the 2017 Phillips 66 annual report, after the oil is processed at the Nipomo refinery, it's sent to the Rodeo facility in the Bay Area and then "distributed to customers in California ... [and] exported to ... Latin America." Phillips' 2013 annual report details the oil company's long-term goal: increasing "export capability to more than 500,000 bpd."

The only thing increased expansion and production at the oil field directly correlates to is increased risks for our county. This is the third and most important area in which Sentinel Peak is misleading us: They are substantially downplaying the true costs of the oil field. While the company and its shareholders rake in profits from each barrel of oil, we are left cleaning up the mess. And there are two very serious potential messes: a depleted, contaminated aquifer and the risk of earthquakes from injected oilfield wastewater.

The oil field sits atop the Arroyo Grande aquifer, which is a current source of drinking water protected under the Safe Drinking Water Act. There are 105 water wells within a mile of the oilfield, and more will be drilled when drought returns. Every barrel of oil the field produces is accompanied by 19 barrels of "produced water," which is saltier than seawater and contains dispersed oil, benzene (a carcinogen), heavy metals, and unknown proprietary chemical mixtures used in drilling. It isn't remotely safe or usable until it's passed through a water reclamation facility. Thanks to the oil field, water that could have been left undisturbed underground for when we need it gets pulled up, polluted, partially cleaned, and dumped straight into the ocean via Pismo Creek.

Halley estimates that Sentinel Peak could produce 5,000 barrels of oil a day if they get to drill 450 new wells. She doesn't mention the extra 95,000 bpd of produced water, which is more than the water facility's maximum capacity. All that extra produced water will have to be pumped into wastewater injection wells, which is why DOGGR and the oilfield's previous owners submitted an aquifer exemption request to the EPA in 2016: They need more space at the oilfield to drill more injection wells.

Earthquakes, the second major risk, can be triggered by increased wastewater injection. The Arroyo Grande fault line forms the northern boundary of the oil field, and it could be activated by injected wastewater. In 2005, a swarm of injection-induced earthquakes occurred at the Tejon Oil field in neighboring Kern County. In Monterey County's San Ardo field, there were 96 events ranging from magnitude 2 to 4.5 between 1967 and 2008. An earthquake could also cause previously injected wastewater to migrate underground and contaminate more drinking water wells and other aquifers.

If you're still unconvinced about Sentinel Peak's true interests, Lanham reports in "Conflicting visions" that the company has donated $500,000 this year to Measure G's most vocal opponent: an astroturf group called Stop the Oil and Gas Shutdown, whose spokesperson, Aaron Hanke, is a former vice president of Meridian Pacific, an oil-friendly consulting firm based in Sacramento. Δ

Katie Ferrari is fighting Big Oil in SLO County. For sources, please see the hyperlinked online version. Send comments and letters to the editor to clanham@newtimesslo.com.

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