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Lots more oil wells to go in near Pismo

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The same week a Texas company announced it was producing, nationally, 15 percent more oil than last year, San Luis Obispo County's Board of Supervisors gave them more news to celebrate: After almost a year of debate, the company now has permission to drastically increase the level of operations at its Price Canyon property.

The unanimous decision allows Plains Exploration and Production (PXP) to build 95 new oil wells and 30 steam-injector wells - bringing the total count in the canyon to 215 wells. Once those wells are completed, which could take several years, PXP's production will increase to an estimated 5,000 barrels a day.

That means that at current crude oil prices - about $63 a barrel - PXP could gross well over $114 million a year from Price Canyon.

The Houston, Tex., company has actually had permission from the county's planning department for its new wells since September 2004. But at supervisors' meeting earlier this year, an appeal by a nearby resident named Helen Hale brought the project to a halt.

In a letter, Hale told the county that contamination of her well water, which is located about a mile from PXP's operations, was creating health problems.

Hale is a close relative of John King of King Ventures - the San Luis Obispo investor and developer. Hale and her husband Orlen, King's brother-in-law, live on tract of land that King plans on developing into luxury homes and vineyards.

When testing of the Hales' well showed no contamination, King Ventures filed additional documents arguing that the expansion of drilling would affect areas surrounding the oil field.

County planners argued back that already-completed environmental reports answered those charges. But despite the repeated delays, in June the board of supervisors asked its staff to go back and re-address water-monitoring issues.

This week, everyone seemed to finally be happy with the answers they were getting.

Along with the oil wells, PXP will also build three, water-quality "sentry wells" between the oil fields and both King Venture's property and Pismo Creek.

Rachel Koveski, with King Ventures, said they were "very pleased" with the water-quality monitoring plan the county approved.

Officials with Pismo Beach - PXP's fields are located about 3 miles away from the city - also walked out of the meeting smiling.

During the meeting, both Mayor Mary Ann Reiss and Mayor Pro Tem Arlene Gonzales-Gee thanked PXP for the agreement they'd made to financially compensate the city for the estimated 700 trucks that will drive through each month on their way to the Conoco-Phillips refinery near Nipomo.

But both were worried about an evening ban on trucks that was proposed for between 4 and 6 p.m.

This a tourist town, said Gonzalez-Gee, and that really doesn't fit with the hours people would be on the street.

"Those trucks will be on our streets at dinnertime," she said.

After some quick wrangling between the county and PXP, the council members got their wish: No trucks from 5 to 7:30 p.m.

The Pismo area has a long and famed relationship with oil. As is commonly known, the city takes its name from the Chumash word for the tar they used on their canoes. Spanish missionaries took note of the oil seeps in the canyons around the city and in 1907 the first drilling rig went in.

Today, more than 15.5 million barrels have come out of the ground in Price Canyon - one of only four places in the county oil is drilled. Oil is also extracted in Nipomo and two other places on the border with Kern County.

- Abraham Hyatt

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