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Santa Maria Energy to Push Forward with Drilling Project Under Tighter Conditions

Oil company won’t sue Santa Barbara County over Board of Supervisors' decision to impose stricter emissions standards

The details haven’t been figured out yet, but Santa Maria Energy officials say they will move forward with an oil development project that Santa Barbara County approved last month with stricter requirements for greenhouse-gas emissions.

The proposed North County project will take shape over the next two years, with a total of 136 production oil wells, connecting pipelines and other oil equipment installed on leased property south of Orcutt, according to Bob Poole, Santa Maria Energy's public and government affairs manager.

The company has decided against filing a lawsuit over the Nov. 12 county Board of Supervisors decision to approve the project under a "10,000 business-as-usual" carbon-emissions standard — voiding an emissions threshold the county Planning Commission approved in September.

Santa Maria Energy’s project was previously green-lighted at the county staff-recommended 29-percent carbon emissions threshold, or 62,480 metric tons per year.

Supervisors Salud Carbajal, Doreen Farr and Janet Wolf voted in favor of the appeal filed by the Environmental Defense Center in October on behalf of several environmental groups. Supervisors Peter Adam and Steve Lavagnino — who represent the Orcutt area — dissented.

In a recent letter to supporters, Santa Maria Energy president David Pratt announced the company’s decision to move forward but provided few details as to exactly how the project's overall economic impact would be affected by the stricter conditions.

Proponents of the project, which had been in the county's approval process for four years, had estimated the project would generate tax revenue in excess of $500 million for the county and create hundreds of well-paying jobs.

“It means fewer jobs will be created,” Pratt said in the letter. “And the job creation will occur more slowly. It means fewer taxes will be generated. That means less money for schools, less money for essential public services, and less money for unfunded pension obligations and deferred maintenance of public assets.

“It also means that Santa Maria Energy will have less money to share with deserving community causes. That said, we take seriously our responsibility to be a good neighbor and will do all we can to make fewer dollars stretch further.”

Poole said Santa Maria Energy has begun the process of obtaining proper permits to build, as well as ordering equipment and trying to determine how and where to purchase credits to mitigate emissions through the cap-and-trade program.

The company already extracts oil from 75 wells drilled into Monterey shale and 26 wells drilled into a diatomite layer at its Orcutt Field.

An early estimate by county staff shows that the stricter emissions standards could cost Santa Maria Energy an extra $500,000 annually.

Poole could not provide any closer estimate, but noted the company’s aggravation in complying with an emissions standard that is nearly four times what state law requires, which is just shy of a 16-percent threshold.

Santa Maria Energy’s many supporters have buoyed the spirits of company officials, Poole added.

“We are frustrated that four years of study were ignored by the Board of Supervisors and, instead, they upheld an appeal by the Environmental Defense Center,” he said. “We have an approved project. We’re moving forward trying to figure out how to make it work.

“We don’t want to define ourselves by what we’re against. We want to define ourselves by what we’re for.”

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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