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Linda Krop announce the agreement with PXP

Paul Wellman

Linda Krop announce the agreement with PXP


SB Enviros Endorse Offshore Oil Proposal

In Historic Agreement, Petrofuel Company PXP Will Preserve Land, Shut Down Offshore Platforms


Originally published 4:00 p.m., April 11, 2008
Updated 12:29 p.m., April 16, 2008

(Photo: Environmental Defense Center attorney Linda Krop, representing Get Oil Out, called the agreement groundbreaking and historic. )

It wasn’t exactly a case of the lion lying down with the lamb, but by Santa Barbara standards it appeared to be the next best thing. A high-powered gathering of Santa Barbara’s most determined anti-oil crusaders assembled by downtown’s Courthouse this past Thursday to announce their endorsement of an offshore oil proposal. Specifically, they came together to voice support for a proposal by Houston-based oil company Plains Exploration and Production (PXP) to expand offshore operations from Platform Irene into the oil-rich Tranquillon Ridge, nearly six miles off Point Concepcion.

Doing most of the speaking was Environmental Defense Center attorney Linda Krop, who has been fighting oil companies in various ways since 1985. Representing the organizations Get Oil Out (GOO)-founded in the aftermath of Santa Barbara’s historic 1969 oil spill-and Citizens Planning Association (CPA), Krop used terms such as “historic,” “unprecedented,” and “ground-breaking” to describe the deal. In this instance, the facts might live up to the hyperbole. To obtain support from Santa Barbara’s environmental establishment, PXP agreed to several significant concessions. As Krop enumerated everything PXP had agreed to do, she repeatedly exclaimed, “And that’s not all!”

PXP attorney Steven Rusch (left) discusses the details of the agreement
Click to enlarge photo

Paul Wellman

PXP attorney Steven Rusch (left) discusses the details of the agreement

First, PXP pledged to shut down all operations at Platform Irene-located offshore in waters under federal jurisdiction-in the year 2022, 15 years sooner than it might otherwise have had to. Additionally, PXP agreed to shut down three other platforms in federal waters in the Pt. Pedernales Field-Platforms Harvest, Hidalgo, and Hermosa- located off the coast of Point Concepcion. Although these platforms are clearly waning in their productivity, there’s no deadline for them to cease operation under the terms of their federal leases. If prices continue to rise, these platforms could remain economical for years to come.

Beyond that, PXP agreed to commit to shut down two more oil and gas processing plants-one in Lompoc scheduled to cease production in 2022, and the other located along the Gaviota Coast, scheduled to cease in 2017. Furthermore, PXP also agreed to transfer 3,900 acres of land over to the Trust for Public Land. Of that area, about 200 acres are located in Gaviota, the site of an existing oil facility. The remaining 3,700 acres are home to the environmentally protected Burton Mesa Chaparral, meaning little development could have occurred there without a serious fight. And of that Burton Mesa land, 800 acres had been designated as the site of a massive housing proposal near Lompoc on which PXP had initially proposed building 1,700 homes. According to the terms of the agreement, PXP has officially abandoned its efforts to secure approval for this proposal, which critics had assailed not just for its size, but for its perceived status as “leap-frog development” that would promote urban sprawl for Lompoc.

As for the enviro-blessed Tranquillon Ridge lease, PXP agreed to develop it in a carbon-neutral fashion, either installing the best available technology to reduce emissions or purchasing carbon offsets at the price of $10 per ton. In addition, the company agreed to donate $1.5 million to Santa Barbara transit agencies to help promote mass transit. Krop indicated the funds could be used to purchase 10 hybrid buses.

Driving PXP to the bargaining table with the enviros has been the exploding price of oil, which as of press time fetches roughly $110 a barrel. That’s about four times the price it was when PXP bought out Nuevo Energy, its predecessor at Platform Irene and the Pt. Pedernales Field platforms. According to some estimates, there may be as much as 200 million barrels of oil buried underneath Tranquillon Ridge. If true, that’s roughly one-quarter the total amount of oil that’s ever been pumped and brought to shore in Santa Barbara County since 1896, when oil production records were first kept.

Having worked in the Santa Barbara Channel oil patch for nearly 30 years, PXP Vice President Steven Rusch knows how big a legal monkey wrench environmental critics can wield. As a former Exxon employee, he saw firsthand what damage Santa Barbara’s eco-Davids could inflict on petro-Goliaths. Why waste time fighting with the likes of GOO and Krop when the price of oil has achieved such stratospheric proportions?

Specifically, PXP is hoping to persuade the Santa Barbara Planning Commission, the California State Lands Commission, and the California Coastal Commission to give it a green light to do something that no oil company has ever been allowed to do in the Santa Barbara Channel: install new wells on an existing federal oil platform utilizing extended-reach drilling technology capable of sucking oil out of California’s sub-sea petroleum reserves. In seeking this approval, PXP is flying in the face of a state-imposed moratorium on any new leasing in the channel passed by the California Legislature in 1994. But included into that legislation was fine print that would allow the State Lands Commission to say yes, if so inclined.

PXP is not the first company to seek such approval for Tranquillon Ridge. Nuevo Energy-which owned Irene for 10 years-tried, but was shot down by county planners in 2002. It didn’t help Nuevo’s cause that it had sued Santa Barbara County, disputing the county’s legal right to regulate plant safety both on and offshore. PXP quickly dropped that litigation when it bought out Nuevo Energy three years ago.

When PXP first unveiled its Tranquillon Ridge proposal, GOO, CPA, and Krop immediately objected that it would effectively increase the lifespan of a project that was starting to exhibit signs of dangerous decrepitude. Pipelines grow corroded over time. In 1997, for example, Nuevo suffered a serious leak as a result. PXP wasted little time beating a path to Krop’s door. Rather than fight a prolonged battle over the technical minutiae of environmental law, PXP’s Rusch sought to avoid warfare at almost all costs. Out of the ensuing negotiations, the deal announced last Thursday was reached. The matter goes before the county’s Planning Commission on April 21, and clearly the deal successfully softened the hearts of county energy planners. They bestowed their “conditional approval” upon PXP’s Tranquillon Ridge plan.

In the aftermath of last Thursday’s press conference, Rusch reflected out loud on the deal just announced. Initially, he conceded, he’d been skeptical about the prospect of negotiations, given the legendary intransigence of Santa Barbara’s environmental opposition. “Negotiation-that was kind of an oxymoron when you’re dealing with these groups down here,” Rusch said. But under the bright sunshine of Thursday morning, Rusch almost appeared to be pinching himself. “We just did what nobody thought could be done,” he said.

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