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Santa Maria Energy Project Heading to Tuesday Showdown at Board of Supervisors

Amid debate over emissions standards and economic benefits, supervisors to take up opponents' appeal of Planning Commission approval

Simply put, all Santa Barbara County officials have to do this week is “the right thing.”

What that means — and what’s at stake — depends on which interpretation of the local oil-drilling debate the Santa Barbara County Board of Supervisors elects to see.

The five supervisors can choose jobs, property tax revenue and energy efficiency on Tuesday by following in the county Planning Commission’s footsteps and approving the Santa Maria Energy oil-development and pipeline project at current carbon emission levels.

Or, they can pick preservation of the planet, forcing stricter greenhouse gas standards.

Passionate supporters on both sides have re-packaged those same arguments since last spring, when officials first held packed public hearings about the proposed project, which would install 136 production oil wells, connecting pipelines and other oil equipment on leased property south of Orcutt.

With the inevitable appeal of the Planning Commission's Sept. 25 decision now before the supervisors, the stage is set for a final showdown Tuesday in Santa Maria, where oil backers have waited nearly four years for a final answer.

                                                                         •        •

About the only thing environmental groups and oil enthusiasts agree on is that Santa Maria Energy’s oil project will likely be approved in some form.

The sticking point is in the level of pollution and emissions threshold that officials will hold the company to.

Kevin Yung, vice president of operations at Santa Maria Energy, outlines the company's operation for a group of Santa Barbara City College students on a recent site visit. (Gina Potthoff / Noozhawk photo)
Kevin Yung, vice president of operations at Santa Maria Energy, outlines the company's operation for a group of Santa Barbara City College students on a recent site visit. (Gina Potthoff / Noozhawk photo)

Planning commissioners green-lighted the project with a 3-2 vote, certifying a final environmental impact report that allowed for a 29-percent carbon emissions threshold, or 62,480 metric tons per year.

Since Santa Barbara County doesn’t have an explicit policy on emissions, staff researched and proposed the subsequently adopted percentage.

California law currently requires a 16-percent threshold for such projects under the 2006 California Global Warming Solutions Act, more commonly referred to as AB 32, which intends to roll back the state's greenhouse gas emissions to 1990 levels by 2020.

What environmentalists want is zero, or at least an emissions level similar to the 10,000 business-as-usual threshold used by San Luis Obispo County and others with established standards.

According to an estimate from the anti-oil group 350 Santa Barbara, at current levels the Santa Maria Energy project’s emissions would be equivalent to adding more than 12,000 cars to local roads.

Santa Maria Energy officials say they’re doing more than their fair share to mitigate emissions by purchasing cap-and-trade program credits, but environmentalists argue the opposite.

Opponents also take issue with the cyclic-steam injection process used by the privately held company, which was founded in 2002.

Santa Maria Energy already employs the process — steam heats the oil in a well to a temperature that produces flow back into the same pipes — to extract oil from 75 wells drilled into Monterey shale and 26 wells drilled into a diatomite layer on 4,000 leased acres at the Orcutt Field two miles off Highway 135.

Water for the cyclic process comes from the Laguna County Sanitation District. Per commissioner approval, water will be delivered to the oil field via a to-be-constructed eight-mile underground recycled water pipeline (instead of by tanker truck).

Potential oil seeps and water contamination from steam injection are concerns raised in spite of repeated assurances from oil company officials.

“Back in the day, you used to be able to stick a well in the ground and (oil) would come gushing out; now we use natural gas,” said Michael Chiacos, energy and transportation manager of the Community Environmental Council. “That uses so much energy.

“We’re in a climate crisis right now. We can’t just keep acting like there’s no problem and just keep emitting carbon emissions.”

                                                                         •        •

Within 10 days of the Planning Commission's approval, the Environmental Defense Center filed an appeal of the decision to the Board of Supervisors on behalf of several environmental organizations.

The appeal alleges two main points: that the commission erred in its decision-making process and that commissioners abused discretion by stamping approval without necessary evidence.

More specifically, the groups say officials weren’t shown a county planning document that requires a 10,000-metric-ton emissions threshold on projects until another standard is adopted.

The interpretation of that document — the county’s Climate Action Study, now called the Energy and Climate Action Plan — is where the two sides disagree, said Beth Marino, Santa Maria Energy’s vice president of legal and corporate affairs.

The 10,000 figure was merely mentioned in the first phase of the overarching Climate Action Strategy, she said, adding that the document later removes stationary sources altogether.

Bob Poole, Santa Maria Energy's public and government affairs manager, said the oil company is already under AB 32 regulation, and is a “covered entity” that seems to be jumping over unnecessary obstacles.

“The appeal is saying we should do more,” Poole said. “We are confident that we have addressed the environmental concerns fully. It’s an apples and oranges argument here. It’s not precedent setting.

“We’re a unique entity. If the environmental community would admit this distinction, then they wouldn’t have to say it’s precedent setting. The Planning Commission came to the right decision.”

Nathan Alley, attorney for the EDC, said staff and even oil company numbers show that full mitigation through the purchase of offsets and credits is feasible, although it would take a chunk of project profits.

“It’s our contention that when you’ve got an external cost — some harm that the company is inflicting on the rest of society — it’s not fair to allow a company just to pollute,” Alley said. “Are we going to make the polluter pay or are we going to essentially ignore the impacts of the energy company’s actions?”

                                                                         •        •

To extract oil from its lease south of Orcutt, Santa Maria Energy pipes in steam to loosen the oil, which is then transported back through the same pipeline in a cyclic
To extract oil from its lease south of Orcutt, Santa Maria Energy pipes in steam to loosen the oil, which is then transported back through the same pipeline in a cyclic "closed loop" process. (Gina Potthoff / Noozhawk photo)

Proponents estimate the project will generate tax revenue in excess of $500 million for the county and create hundreds of well-paying jobs. Many opponents concede the development’s positive economic impacts for a region still in recession recovery. Some have even gone on tours of the pilot oil field through Santa Maria Energy’s education outreach program, and admit the site looks safe and clean.

But aesthetics aren't at the heart of contention.

“The only remaining issue for us is the greenhouse gas emissions,” said Ken Hough, executive director of the Santa Barbara County Action Network.

Thousands of signatures have been collected on each side of the oil debate, which finally comes to a head at 1:30 p.m. Tuesday in room 511 of the Betteravia Government Administration Building at 511 E. Lakeside Parkway in Santa Maria.

Noozhawk staff writer Gina Potthoff can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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