Dodging Measure P Oil Slicks

Drilling Ban Legality Hits the Board and the Fan

No on P supporters pack the county board room
Paul Wellman

The supervisors tried to make one thing clear this week: They had only two options with Measure P after the Water Guardians quickly snagged 16,000 signatures this spring in support of a ban on new fracking, acidizing, and cyclic steam injection oil wells. They could either place the item on the November ballot or adopt it right then and there. And on Tuesday, the supervisors found themselves in another tight spot, asked to approve protocols for handling petitions to opt out of the ban if it passes next month.

After four hours of public testimony from both sides — some wore blue shirts, some wore green shirts, all packed the room to the consternation of the fire marshal — the supervisors voted 3-2 in favor of the protocols for handling takings and vested rights. Takings claims would generally be filed by royalty owners alleging the measure deprived them from reaping the financial benefit of their land; assertions of vested rights would more likely come from oil companies wondering if their projects could proceed. Approved by supervisors Salud Carbajal, Janet Wolf, and Doreen Farr (who haven’t taken stances on the measure) and decried by supervisors Peter Adam and Steve Lavagnino (who have spoken out against the initiative), the guidelines will dictate how such exceptions claims get processed.

While the Yes on P supporters commended the protocols, the No side said the procedures didn’t make them feel secure that their existing drilling operations would be allowed to continue, or that they were any less likely to sue the county if the measure passes. County Counsel Mike Ghizzoni reiterated his belief that the initiative would put the county at legal risk but that the opt-out options could somewhat lessen the danger.

In the hot seat, Ghizzoni suggested that the supervisors look into passing an amendment post-election expressly exempting existing operations, which he said would “remove a lot of risk and uncertainty.” Measure P supporters — including lawyers from the Environmental Defense Center (EDC) — have long maintained that the phrase “vested rights” is the legalese equivalent of “existing operations.”

But when asked if he would have written Measure P differently, Ghizzoni made himself clear: “Yes, if we were starting with a fresh piece of paper, I would be looking hard at the California Supreme Court statements that land-use regulations customarily exempt existing uses to avoid discussions like the one we’re having.”

County Counsel Mike Ghizzoni
Paul Wellman

Drilling for Lawsuits

Several prominent Santa Barbara attorneys have said that if there’s one certainty about Measure P, it’s that it will keep their colleagues busy fighting with the county and with each other. For example, Linda Krop, chief counsel for the EDC, disagreed with Ghizzoni that a post-election amendment would be necessary, saying that the state already provides such protections for the county.

Krop — as well as an attorney for the Bay Area law firm that wrote Measure P with help from EDC lawyers — also challenged the near-guarantee from county insiders and Beth Marino, vice president for legal and corporate affairs at Santa Maria Energy, that if the measure passes on November 4, oil companies will claim the law treads on the state’s regulatory turf, especially given Senate Bill 4, which aims to tighten California’s grip on fracking and acidizing (but not cyclic steam injection) operations. Krop called a state pre-emption challenge “a red herring,” as the county has the purview to control land uses. Marino said that “development of the state’s resources is a statewide concern.”

Speakers at Tuesday’s meeting all but promised smaller lawsuits, and the county, which isn’t insured for takings damages, has already received two written threats, Ghizzoni said. Making the biggest hay among the area’s oil companies is the issue of vested rights, granted only when “substantial” work on a project has been conducted and with “substantial” liabilities incurred in reliance of a permit — with the meaning of “substantial” likely differing case-by-case, Ghizzoni explained.

Industry officials also questioned what existing operations would be viewed as “vested,” as oil fields routinely require new permits for individual wells and infrastructure. Although the Yes on P side vehemently maintains that the measure doesn’t apply to current projects or well-maintenance activities, county Energy Division Director Kevin Drude has said that every oil well, even those used for conventional drilling, will eventually need acid treatment for buildup removal. How that practice would be interpreted remains unclear, he said.

These concerns have led oil industry officials to speculate that while Measure P may not immediately affect existing operations, it could bring the majority of Santa Barbara’s industry to a screeching halt within five years. For Santa Maria Energy, the roadblock could come even sooner, Marino said, noting that the company’s final permit for its 136-well cyclic-steaming project — which brought that technique into county consciousness one year ago — isn’t coming until early next year.

Measure P's Katie Davis
Paul Wellman

Drilling for Numbers

At a seminar held earlier this month, Marino and other Santa Maria Energy representatives — media-shy CEO David Pratt made an appearance, too — addressed what they said were “tall tales as tall as Bigfoot and as scary as the Loch Ness Monster” perpetrated by P supporters. Chief among them is a concern that the company plans on drilling more than 7,000 cyclic steam injection wells in the years to come. The expansion estimate was included in an SEC filing when the company had planned to merge with a firm earlier this year. Santa Maria Energy spokesperson Bob Poole shrugged that number off, pointing to the four years it took the company to get just 136 wells approved and saying that future plans are “not defined.”

All of Santa Maria Energy’s plans and many of those of other area operators will depend on what happens November 4. Currently, approximately 1,500 oil wells dot the county — all of which are north of Gaviota — and about one-third of them use cyclic steam injection, said Drude. Fracking wells and applications for fracking are nonexistent, Drude said, and have been since the county enacted stringent rules in 2011 after it caught Venoco engaging in the controversial practice.

While fracking and acidizing techniques break and dissolve rock formations, the cyclic steam process injects steam into the ground to thin the oil. (Or, as Santa Maria Energy representatives said at their seminar, the process is like putting honey in the microwave to thin it for your morning toast.) But steaming produces four times the greenhouse gas emissions of conventional drilling, Drude said, calling it a “carbon intensive” process.

Concerns over a spike in cyclic steam injection wells — most of the 900 wells on the county’s radar would use that method — and consequent emissions are partly what spurred the Water Guardians to act on the issue now, rather than wait until 2016 as some groups reportedly advised them to do.

Studies pointing to well casing failures, concerns about subsequent aquifer contamination, and fears of surface expressions like that from a cyclic steam well in Kern County that sucked an oil field worker underground to his death are just some of the warnings oft-invoked by the Yes campaign against allowing the industry to expand. “Just like anything in life, there are failures. Failures do happen,” Drude said. But, he added, in his 24 years working for the department, he hasn’t encountered any well failures.

Santa Maria Energy's Bob Poole
Paul Wellman

Drilling for Votes

Not surprisingly, opponents of Measure P have clobbered the competition on the fundraising front, amassing $4.5 million in donations mostly from Californians for Energy Independence, a statewide political committee backed by Chevron, ExxonMobil, and smaller Santa Barbara County operators. Proponents have raised $258,000. “No” ads have been plastered on television for weeks, but the “Yes” side says it will have its first television ad coming soon.

In the meantime, both camps are focusing on voter outreach and registration, with Isla Vista high on the priority list, especially for supporters. Reelection campaigns for Assemblymember Das Williams (an early Measure P supporter) and Congressmember Lois Capps (who hasn’t taken a position) have helped get approximately 4,000 students registered, with many saying 7,000-8,000 students would be a goal for “Yes.” Supporters are hoping that races for the Isla Vista Parks District and the Santa Barbara City College Board will mobilize young voters during a midterm election lacking larger hot-button issues.

The county firefighters union, the Deputy Sheriff’s Association, and the Santa Barbara Police Officers Association have all endorsed the “No” side, alleging that Measure P would subtract from crucial county funding. Basing their belief that existing operations will be gone in a matter of years, opponents argue that the $20 million the oil industry pays in property taxes to the county — most of which goes to schools, the General Fund, and County Fire — would disappear along with current and future jobs.

Not going away anytime soon is the need for oil, said Santa Maria Energy’s Poole, echoing his cohorts’ arguments that Santa Barbara County — the only county in California with its own Energy Division — already has strong rules in place, and as such, can produce oil under safer conditions than foreign countries do. “The sky is not falling, Chicken Little,” he said. “There is a false illusion that if they stop oil wherever they can, that will allow us to fly around in solar planes tomorrow.”

But prominent Water Guardian Katie Davis said that she wants Santa Barbara County to be a leader on climate change issues, which means moving away from fossil fuels and looking to the future. “Regardless of whether Measure P passes or not, we will at some point stop producing oil, because it’s a finite resource,” she said. “That is true.”


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