Local oil drilling part of state budget deal

By Sam Womack/Staff Writer

An offshore oil drilling project that once had strong local support has drawn vocal opposition since the governor added it to the state’s budget proposal this week.

But a representative for the proposed operator, Plains Exploration and Production Co. (PXP), said Santa Barbara County residents can still expect the same benefits from the project off Vandenberg Air Force Base even though the agency approving the project has changed.

A “ground-breaking” agreement between PXP and local environmental groups who have always opposed oil production — including the Environmental Defense Center, Get Oil Out! and Citizens Planning Association — still applies, said Steve Rusch, PXP vice president of governmental affairs.

“There have been a lot of misstatements ... from the various news and print media,” he said.

Project approval, Rusch explained, means PXP shuts down two offshore oil platforms and two onshore processing facilities in the county in less than 15 years.

Also, 4,000 acres of property near Lompoc would be preserved, the project’s greenhouse gas emissions would be mitigated, and funding to purchase clean buses would be provided to the county.

With all the benefits of his company’s project, Rusch said, “if the opponents are successful, the coast could be at greater risk.”

“It isn’t about ‘new’ platforms and pipelines. PXP will use its existing Platform Irene, using well-proven slant-drill technology,” Rusch added.

Platform Irene is in federal waters, but an extended-reach slant drill will be used to tap oil reserves in Tranquillon Ridge under state waters, which are within three miles of the coastline.

The Santa Barbara County Board of Supervisors approved the PXP proposal in October after dozens of residents and activists expressed their support, but the three-member State Lands Commission later denied it.

Now, Gov. Arnold Schwarzenegger and legislative leaders must convince two-thirds of both houses of the Legislature to approve the state budget compromise they hammered out this week, which includes a bill regarding PXP’s project.

The legislation would allow the state director of finance to overturn the Lands Commission’s decision and grant approval.

But it would still need the green light from the California Coastal Commission and the federal Minerals Management Service, according to Thomas Sheehy, chief deputy director of policy of the Department of Finance.

Once all the permits were issued, PXP would write the state a check for $100 million, as an advance payment on royalties.

Over the life of the project, the state could receive $1.8 billion in royalties and Santa Barbara County could get anywhere from $200 million to $313 million in property-tax revenue, according to Rusch.

The previously supportive environmental groups are displeased by the round-about approval because it skirts the system in place, EDC Executive Director David Landecker said.

Rather than count on the PXP project being approved with the same conditions through the state budget process, the EDC will continue to work to allay the Lands Commission’s concerns and reapply for the PXP approval at a later date, Landecker said.