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SLO County debates its authority over Arroyo Grande Oilfield as it gives go-ahead to expand

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A few days before the San Luis Obispo County Board of Supervisors would give the green light to Sentinel Peak Resources to drill 31 new wells at the Arroyo Grande Oilfield, county officials notified the board of a "recent legal issue."

NEW WELLS COMING? After six years in limbo, San Luis Obispo County gave Sentinel Peak Resources the green light to drill 31 new wells at the Arroyo Grande Oilfield (pictured)—drawing criticism from residents and activists. - FILE PHOTO BY JAYSON MELLOM
  • File Photo By Jayson Mellom
  • NEW WELLS COMING? After six years in limbo, San Luis Obispo County gave Sentinel Peak Resources the green light to drill 31 new wells at the Arroyo Grande Oilfield (pictured)—drawing criticism from residents and activists.

On Oct. 12, a state appellate court struck down core aspects of Monterey County's Measure Z—a 2016 ballot measure that voters passed to ban new oil and gas wells and other drilling practices in the county. The court of appeals ruled that Monterey County had overstepped its authority with the measure, and that only the state had the power to regulate existing oil fields, including the drilling of new wells.

"I wanted to highlight that," SLO County Chief Deputy Counsel Jon Ansolabehere told county supervisors at an Oct. 19 hearing about the future of the Arroyo Grande Oilfield, "because it really does limit what discretion the board has on regulating oil and gas facilities in California."

County staff cited the ruling as just one of several reasons to deny the nonprofit Center for Biological Diversity's appeal of a pending 2015 county decision to give Sentinel Peak Resources three more years to complete a nearly 20-year-old plan known as Phase IV to expand production at the Arroyo Grande Oilfield.

The Board of Supervisors waited six years to hear the Center's appeal in order to let the U.S. EPA first decide whether to exempt the below-ground aquifer—where oil wastewater is injected—from the Safe Drinking Water Act. In 2019, the EPA ruled that the aquifer between Pismo Beach and Edna Valley did not hydraulically connect with any current or future source of drinking water, and therefore it could legally serve as a wastewater injection site.

Both the court ruling and the EPA's decision informed the county's core argument on Oct. 19: that the county did not have the grounds or authority to block the drilling. Even though oil operators failed to complete the so-called Phase IV of expansion (125 new wells) within the required time frame of between 2005 and 2015, neither the project's scope nor circumstances had really changed in 16 years. The county's hands were essentially tied, officials said.

"The project does not seek any new approval to install wells or other improvements not previously evaluated and approved," a SLO County staff report read.

The Center for Biological Diversity—and dozens of neighbors, residents, and activists—disagreed. The Arizona-based nonprofit—which aggressively campaigned in 2018 for Measure G, the local ballot measure that mirrored Measure Z in Monterey County but failed at the ballot box—called those arguments red herrings and excuses.

It argued that by not requiring Sentinel Peak to seek a new permit and to undergo new environmental review for new drilling, SLO County was simply abdicating its land-use responsibility to oversee the oil field.

"A free pass," is how Center for Biological Diversity Staff Attorney Victoria Bogdan Tejeda described it.

Center attorneys argued to the board that Phase IV's 16-year-old environmental impact report was woefully outdated (the term greenhouse gas was not printed once, they said). That, they said, combined with the oil field's purportedly shady practice of drilling dozens of replacement wells at the site since 2015, gave the county plenty of ammunition to force Sentinel Peak to start over with permitting.

"The board should've put the brakes on, I think that's what it really comes down to," Bogdan Tejeda told New Times after the hearing. "We were asking for adequate oversight, permitting, and accountability, and it's disappointing some members of the board said we're not going to have that."

County supervisors voted 4-1 to grant Sentinel Peak the time extension—with 2nd District Supervisor Bruce Gibson casting the dissenting vote. Gibson said he thought Sentinel Peak's undrilled Phase IV wells should be re-evaluated alongside any future phases of drilling the company might propose. Previous iterations of a proposed Phase V at the Arroyo Grande Oilfield involved 450 new wells.

Natalie Risner, a local resident who lives within a mile of the oil field, said Gibson's proposal "made real good sense" to her. Risner is most worried about the oil field's impact on her and her neighbors' groundwater supply. Like others, she's not reassured by the aquifer exemption granted by the EPA.

"It's very concerning," Risner told New Times. "Their original Phase V plans were just staggering, the number of wells they want to expand is just—and the amount of water they'd be pulling out of the ground—it's hard to understand how that's not going affect the surrounding water wells.

"The [EIR] that these [Phase IV] wells were approved on is almost 20 years old," she added. "It just seems like they need to do some more review and make sure it's safe."

How much more oil drilling will ultimately be allowed at the Arroyo Grande Oilfield is still unknown.

On Oct. 21, CalGEM, the state's oil and gas regulator, announced the largest proposed buffer zone in the nation between new oil wells and homes, schools, and hospitals, of 1 kilometer (0.6 of a mile). The proposal, which is opposed by the oil and gas industry, would also put additional regulations and requirements on existing oil fields that lie within the buffer zones.

How these rules, which would go into effect in 2023 at the earliest, could impact the Arroyo Grande Oilfield is unknown. Neither CalGEM nor Sentinel Peak Resources responded to New Times' requests for comment for this story.

In the meantime, SLO County residents' quest for local control over oil continues. Charles Varni, a leading proponent of Measure G in 2018, told New Times that the Board of Supervisors' Oct. 19 decision is really an indicator of just how much of a voice localities have.

"This is just very telling of the power that the Board of Supervisors has: If we had a progressive majority on there, Sentinel Peak would be dancing to a much different song right now," Varni said. "The county minerals division may be having new marching orders about permitting new wells." Δ

Assistant Editor Peter Johnson can be reached at pjohnson@newtimesslo.com.

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