Saturday, January 24, 2009
MALIBU ENVIRO WATCH:
Deal Goes Before State Agencies that Could Lead to Resumption of Offshore Oil Drilling in California

• No Longer under the Radar—Questions Are Being Raised about PXP Proposal •

BY ANNE SOBLE

No sooner has the death knell sounded for a major liquefied natural gas project off the coast of Southern California, than the specter is being raised of the resumption of offshore oil drilling if a privately brokered deal in the Santa Barbara area receives the approval of the California State Lands Commission and the California Coastal Commission within the next three weeks.
The proposal has major implications for Malibu as it could open the doors to oil leasing and exploration in state and federal waters now that the federal moratorium has been lifted and the Minerals Management Service, an agency within the U.S. Department of the Interior responsible for offshore oil and gas leasing, announced the sites of possible new lease sales this month, including some in Southern California.
The deal set to go before State Lands Commission on Thursday, Jan. 29, coincidentally the 40th anniversary of the catastrophic Santa Barbara oil spill, cited as one of the catalysts for the development of the contemporary environmental movement, could set back that movement, despite some enviro groups backing the proposal in seeming disregard of its broader implications.
The package was brokered for two Santa Barbara groups—Get Oil Out and the Citizens Planning Association—with Texas-based Plains Exploration and Production, or PXP, to allow 17 new wells at Tranquillon Ridge, the first from a federal platform into state reserves since the moratorium.
PXP maintains that the project falls under an exception in the California Sanctuary Act, which otherwise prohibits new oil and gas leasing in state tidelands, because resources from Tranquillon are reportedly being pilfered from a well in federal waters, and the state is losing money in royalties.
CSLC staff, which has recommended against the project, says drainage is minimal and the state already receives 50 percent of royalties from the well in question.
Monies from the new drilling would go into the cash-strapped state General Fund. But what also gives the project momentum is that, in exchange for the right to develop the Tranquillon lease, the company would agree to stop its offshore oil drilling operations by 2022 and make major land donations and financial contributions for air quality improvements in the Santa Barbara area.
Ironically, the environmental law firm that brokered the deal for the local groups and is shepherding it though the approval process is the same one hired to help successfully kill the BHP Billiton Cabrillo Port LNG project northwest of Malibu in 2007.
That firm, Environmental Defense Center, also Santa Barbara based, is now lobbying for the PXP package, the specific terms of which, including any payment to EDC and others, largely remain closeted.
Equally important, EDC has used its considerable clout in the environmental community to bring other enviro organizations on board.
The Malibu Surfside News is making requests for information about the terms of the deal brokered by EDC, but previous media requests for more information have been denied and honoring such requests is reportedly precluded by the terms of the confidentiality agreement with PXP.
It is this secrecy that prompted the State Attorney General's Office to question the enforceability of any provisions in the deal to cease oil production by a set date, or even the so-called benefits that might accrue to the greater Santa Barbara area.
In addition, the CSLC staff in its recommendation of denial, cites similar concerns about the unknown terms of the package and the overall unenforceability of a private agreement.
Commission observers report the three-member CSLC may be spit 2-1 against the deal, as it was on Cabrillo Port, which would kill the proposal. But there is strong political pressure on its members because of the package's support base and the state budget crisis. Because the PXP deal is only now beginning to attract attention, public opposition is in its early stages.
Although Governor Schwarzenegger has talked the talk of no drilling off California, some Sacramento insiders say the state’s cash crunch may change his walk on the issue. The State Lands member expected to vote for the deal so far is the governor's director of finance, Michael Genest.
The other two members of the commission, both of whom opposed Cabrillo Port, are being lobbied aggressively on behalf of the project.
However, Malibu Assemblymember Julia Brownley and other state legislators have voiced their concerns about the PXP package in a letter to CSLC member Lt. Gov. John Garamendi on Jan. 12. The dozen members of the Assembly Coastal Caucus stressed the uncertainty of the project fostered during what they describe as the “drill here, drill now, pay less” hysteria when gas prices skyrocketed,
The Coastal Caucus letter states, “[The proposal] breaks California’s longstanding statewide ban on new offshore oil leasing in state waters and exposes our coastal resources to irreparable damage from spills. Our coastal resources that provide economic benefit in terms of tourism, recreation, scenic beauty, coastal land real estate value, wildlife, etc are priceless and should not be sold and certainly not by a group of [private organizations].”
Also, on Jan. 22, Malibu’s State Senator Fran Pavley sent a letter to the third CSLC member, Controller John Chiang, who now chairs the panel, stating, “We caution that premature approval of this lease without a robust discussion and statewide vetting of the long-term consequences it holds for all of California and the nation would be ill advised.”
If the State Lands Commission approves the drilling project, it is expected to be on the agenda of the California Coastal Commission's meeting in February. The Coastal Commission does not have the broad policy review options of State Lands. The CCC's authority on the matter is limited to determining whether the project is mitigated to the greatest extent feasible.
Coastal Commissioner and Malibu resident Sara Wan told The News this week that she is concerned the proposal "changes a 40-year opposition to offshore drilling and sets a terrible precedent, opening up the possibility of drilling everywhere along the coast."
Wan said, "We need to send a clear message that the coast of California is not for sale. There is no amount of money that can make up for the damage to coastal resources and the coastal economy when there is an oil spill." She said it is particularly important that this be the message that state agencies send to Congress and the Obama Administration as federal oil drilling policy is undergoing review.
Among broader concerns that some critics say are being disregarded by the groups that have jumped on the PXP bandwagon is the project's continuation of the nation's fossil fuel dependence and that it undermines the overall goals of the environmental movement in general.
The CSLC meeting is scheduled for noon on Thursday, Jan. 29, at the Hotel Mar Monte, 1111 East Cabrillo Boulevard in Santa Barbara.