California Rejects Oil Agreement between Industry and Greens

Published April 1, 2009

The California State Lands Commission has rejected an agreement by industry and environmental groups that would have allowed environmentally friendly oil production off the coast of Santa Barbara.

According to the commission, the economic and environmental benefits of the agreement are outweighed by the presumption of possible future harm if the agreement should inspire additional offshore oil production.

Fearing Future Cooperation

Natural oil seeps off the shore of Santa Barbara are responsible for substantial pollution of regional waters, and area environmental groups are eager to mitigate the problem. Oil companies want to take advantage of the seeps, which they see as an abundant oil resource, and thereby help clean up the environment.

The State Lands Commission voted 2-1 in late January to forbid oil production offshore from Santa Barbara.

Lt. Gov. John Garamendi (D) cast the deciding vote on the commission and, according to the Los Angeles Times, said allowing new production in state waters would suggest the state welcomes offshore drilling and would encourage oil companies to look into additional offshore oil production opportunities.

That, according to Garamendi, would negate any economic and environmental benefits from oil production off the coast near Santa Barbara.

State Controller John Chiang (D) cast the other no vote, doing so without comment.

Economic Gains, Local Support

Tom Sheehy, representing the California Department of Finance, voted for the proposal, citing the economic benefits of oil production and the royalty payments that would help the state fight its frightening deficit crisis.

Under the proposed production agreement, the oil industry agreed to close other, less-productive offshore platforms. Recognizing the substantial environmental benefits that would accrue from the agreement, “a parade of local officials, residents, and environmental activists insisted the plan would have advanced efforts to protect the coast,” the Times reported.

Bruce Allen, cofounder of Stop Oil Seeps California—a nonprofit group devoted to reducing natural oil and gas seepage in the ocean—attended the hearing and was disappointed with the vote.

“SOS California feels it’s the wrong decision because oil and gas resources can be developed safely and have positive environmental benefits along the central coastline,” Allen said. “It is to California’s benefit to develop its offshore resources.”

Allen noted oil drilling relieves pressure beneath the surface of the ocean and thus curtails natural seepage. He cited a 1999 University of California-Santa Barbara study that documented, over a 22-year period, a 50 percent reduction in seepage in the immediate vicinity of Platform Holly.

A 2002 report from the National Academies’ National Research Council documented that, of the 76 million gallons of oil that enter North American ocean waters each year, 47 million gallons—62 percent—seep into the waters naturally from the ocean floor.

Missed Opportunities

Tom Tanton, a senior fellow at the Pacific Research Institute, noted the Santa Barbara County Board of Supervisors voted 3-2 in 2008 to send a letter to Gov. Arnold Schwarzenegger (R) encouraging him to allow expanded oil exploration and extraction off the county’s coast.

“The people of Santa Barbara are the ones most directly affected by such a decision, but their decision was cast aside,” Tanton said.

As a result of the commission’s decision, “California will forego advanced technologies that will continue to make oil drilling safer for the environment,” said Tanton. “The state will also miss out on millions, perhaps billions, of dollars in oil-royalty revenues.

“The effective prohibition of oil production off California’s coast runs counter to California’s ambitious global warming efforts. By requiring that oil be transported farther distances to reach state consumers, it simply increases the amount of fuel—and hence carbon emissions—required to serve the consumer market,” Tanton added.

Drew Thornley ([email protected]) writes from Texas.