State Lands Was Right to Reject Slant-Drilling Deal

Agreement to End Oil was Enforceable and Beneficial to our Community and State

Contrary to the letter that appeared on-line in the Santa Barbara Independent on March 19, the agreement between PXP and EDC, GOO! and CPA, just like any contract in the State of California, is enforceable. Had the authors of the letter – none of whom live in Santa Barbara County or opposed this project as originally proposed by PXP - contacted us, we would have been happy to provide them with the following:

o The contract with the environmental groups requires PXP to (1) shut down production from four operating platforms and two onshore processing and support facilities (which now have no termination date); (2) quitclaim its leases to the State on a date certain; and (3) remove the onshore facilities and convey the land to the public for permanent preservation;
o PXP also has a contract with The Trust for Public Land (TPL) that requires the conveyance of the cleaned properties on a phased schedule related to the end dates;
o The County of Santa Barbara imposed enforceable conditions in its Final Development Plan that require PXP to cease production from the Tranquillon Ridge project in 2022;
o The State Lands Commission (SLC) and California Coastal Commission (CCC) were asked to include the end dates in their approvals, so that they could also enforce them; in fact, we offered to give the State Attorney General the ability to enforce all of the terms of the agreement between the environmental parties and PXP.

Why would the environmental groups and TPL enter into agreements that are not enforceable? The answer is simple: we wouldn’t. The agreements were reviewed by several expert attorneys who confirmed their enforceability.

While it might be technically possible for the federal government to interfere with contractual rights and local and state approvals, this has never happened in this type of situation. In fact, had the State approved this project, such interference would have been highly unlikely, given the broad support by a wide range of interests, as well as the County and the State. Even the spokesperson for the U.S. Minerals Management Service testified at the SLC hearing that the end dates contained in our agreements were reasonable, thus rendering such interference unlikely.

Here in Santa Barbara County, we are constantly fighting a host of other oil development proposals and leasing pressures. Now that the SLC hearing is over, we invite the signers of the March 19 letter to join us in our ongoing efforts to protect our coast from the many other threats of new oil development, as well as our efforts to get existing oil operations out.

Linda Krop, Chief Counsel, EDC

Others on the coast out side and within Santa Barbara are just as dedicated to fighting oil development and the continued use of fossil fuel. They can think, research and analyze for themselves as did the State Lands staff, Attorney General's office and consult other unbiased experts in exercising due diligence. Krop cannot insist that every one has to take the leap of faith and accept the advocacy position of those receiving compensation for the deal.

With respect to Ms. Krop's comment, "Had the authors of the letter – none of whom live in Santa Barbara County."

What does it matter if the authors live in Santa Barbara County? It's everyone's coast, everyone's ocean and everyone's coastal resources that are at risk. As stated during the State Lands Commission (emphasis on state) hearing, there isn't a Santa Barbara Lands Commission making the decisions here.

As one of the signers of the letter and a graduate of the UCSB Environmental Studies Program, I share EDC's interest in protecting the California coast from further offshore drilling. Working as an urban planner and environmental advocate, I look forward to partnering with the Santa Barbara community to encourage sustainable development that protects our green infrastructure while demanding smart growth and measured resource utilization.

While I respect the integrity of the environmental community in negotiating the deal with PXP, the State Lands Commission, the Assembly Coastal Caucus, and the State Attorney General have noted some deficiencies, iterated in our letter above. While PXP states they would shut down production at Tranquillon Ridge in 2022, the spokesperson for the US Minerals Management Service retorted in her testimony, “We like this project, but we have a problem with the end dates.” MMS makes it clear they intend to meet their governing statute which requires that all recoverable oil be extracted. They also will not agree to taking down platforms. No end dates, no deal.

Onshore facilities could be removed, but PXP does not own the Gaviota facility and the partnership agreements are confidential. Given that platforms would continue to exist, even if onshore facilities are closed, new ones could be constructed. The MMS five-year leasing plan makes it clear they would push for new facilities up and down the coast. Though the plan has been postponed for 180 days, the PXP-EDC deal would give justification to new federal Outer-Continental Shelf leasing. The message to DC: California considers financial contributions to its general fund a benefit that outweighs the risk of contamination of its coastline. Remember, 35 existing leases in the Santa Barbara Channel could be opened to new drilling without a moratorium in place and could be used to justify new processing facilities.

Comprehensive solutions to our national oil addiction cannot be negotiated in a backroom between a few interested parties. Ending urban sprawl, demanding alternative transportation modalities, and developing an alternative energy economy are the only way to get oil extraction proposals out of the Santa Barbara Channel.

Ms. Krop fails to recognize that the secret deal she negotiated with PXP confirms to many that environmentalists are merely legal extortionists.

Fighting to preserve our coastal resources is already difficult. We don't need to do it with the albatross of "having our price" hanging from our necks.

The EDC/PXP proposal represented a substantial change in state policy regarding offshore drilling. As others have stated, such a change should be subjected to a thorough and comprehensive public review, and should not come about via a special deal that benefits only a few in Santa Barbara.