With Sable Offshore Corp.‘s restart of oil production, the Santa Barbara County Board of Supervisors has approved an increase in mitigation fees to fund coastal benefit projects.
Sable took over the Santa Ynez Unit offshore platforms, processing facility and oil pipelines in 2024 and restarted partial operations around March.
The county, California Coastal Commission and environmental groups have challenged the restart in various ways, including lawsuits. The federal government supports it.
The county implemented Coastal Resources Mitigation Fund fees for oil operators as a condition of their permits going back to the 1980s. Revenues are awarded in grants to nonprofits and other groups doing coastal projects. The Cabrillo High School Aquarium in Lompoc is one recent beneficiary of grant funding from these monies.
The Santa Ynez Unit owed $132,750 annually for its fee cycle of 2023-2027 based on a non-operational facility. Since it restarted oil production, county Energy Division staff triggered a reassessment and asked supervisors to increase the annual fee to $318,600.
Supervisors approved the higher fees 4-0 on Tuesday, with Joan Hartmann recusing herself. Hartmann has withdrawn from most Sable-related items and votes due to a potential conflict of interest. The pipelines run near her property.
The fee increase will be retroactive to when operations restarted, said Energy Division planner Jacquelynn Ybarra.
The fee amount is based on the same number of “points” calculated when the Santa Ynez Unit was operating before the 2015 Refugio Oil Spill and facility shutdown.
However, the amount is higher now than in 2015 due to inflation, Ybarra noted.
Steve Rusch, vice president of environmental and government affairs for Sable, submitted a letter requesting that the increased fee amount not be retroactive, but only go into effect after Tuesday’s vote.
This fee is a condition of Santa Barbara County permits for the facilities, and the county notably did not approve a permit transfer from Exxon to Sable. That decision was upheld by a federal court judge.
Because of that, Supervisor Bob Nelson asked who actually gets the bill.
The invoice is sent to Exxon and Sable. In reality, Sable pays it, said Errin Briggs, deputy director of the county’s Energy, Minerals and Compliance Division. “We do recognize the conundrum we’re talking about so we do copy both parties,” he said.
Nelson said the county should just start sending it to Exxon, since it doesn’t recognize Sable as the permit-holder, and Exxon can forward it along if they want to.
Supervisor Steve Lavagnino asked about the county’s ability to charge the higher fees retroactively.
Briggs said the county reassessed the Santa Ynez Unit fees after the oil spill and shutdown and gave the then-operators a refund for non-operational time.
“It’s kind of the same thing here, except now they restarted and we’re collecting more money,” he said.
“It’s gotta be fair both ways and it is, so I appreciate that,” Lavagnino said.
Supervisor Laura Capps asked about the types of projects funded by these fees. Ybarra cited coastal property purchases for restoration, hiking trails, recreation projects and the high school aquarium.
The Point Arguello and Point Pedernales oil operators also pay into the Coastal Resources Mitigation Fund.
Freeport-McMoRan is moving forward with plans to decommission its Point Arguello oil and gas operations. Santa Barbara County approved a related environmental review contract in June.
The company also operates the Point Pedernales pipelines and the Lompoc oil and gas plant. Those facilities have been shut-in (non-operating) since January 2023, when the Phillips 66 export transportation pipeline stopped operating, according to the county.
