Friday, October 20 , 2017, 3:52 am | Fair 64º

 
 
 
 

Local News

State Lands Commission Outlines Next Steps to Dismantle Platform Holly, Ellwood Onshore Facility

Agency pledges to move ahead with plans to plug, abandon and decommission former Venoco operations while acknowledging costs could exceed $120 million

The State Lands Commission held a town hall meeting last week at Goleta City Hall to provide an update on the decommissioning of Venoco Inc.’s Platform Holly and other facilities along the coast. More than 60 community members attended. Click to view larger
The State Lands Commission held a town hall meeting last week at Goleta City Hall to provide an update on the decommissioning of Venoco Inc.’s Platform Holly and other facilities along the coast. More than 60 community members attended. (Brooke Holland / Noozhawk photo)

The State Lands Commission’s priority in the decommissioning of Venoco Inc.’s Platform Holly and the Ellwood Onshore Facility along the Goleta coast is ensuring the facilities are secured, and public health, safety and the environment are protected, according to a top agency official.

On April 12, Venoco notified the commission that it was no longer able to meet the lease terms and obligations for the South Ellwood Field lease, including the Ellwood Beach Pier leases and Platform Holly.

Venoco quitclaimed its interests in Platform Holly, which sits in the Santa Barbara Channel about 1½ miles off Goleta, and the Ellwood Beach Pier leases after filing for Chapter 11 bankruptcy on April 17.

In total, the Lands Commission will be plugging and decommissioning 32 wells — 30 wells around Platform Holly and two off the Ellwood Onshore Facility processing plant near Haskell’s Beach in western Goleta.

“The SLC has not been in this situation before or had a lessor of this magnitude abandon these types of facilities, but I am confident in our team’s ability to make a decision and pursue this in an efficient way,” said Jennifer Lucchesi, the commission’s executive officer.

“We were faced with a serious situation. Venoco has left their facilities on the state’s land, and we are in the process of working to get rid of those.”

Venoco did not quitclaim four other leases that it holds with the state — the Ellwood Marine Terminal, leases offshore of Carpinteria and an inland gas lease located in the Sacramento-San Joaquin River Delta area.

The decommissioning process consists of three phases.

The first phase ensures 24-hour Veneco staffing at Platform Holly and providing the Lands Commission staff with time seeing the requests for proposals from qualified engineering outfits to plug and abandon Platform Holly and PRC 421. This phase is expected to be concluded by July 31.

Once a contractor is selected, phase two will begin the plug-and-abandon process on the 32 wells. That phase is expected to take 20-36 months, depending on conditions.

Once complete, Platform Holly and PRC 421 will be rendered largely safe, according to Lucchesi.

Venoco Inc.’s Platform Holly rises from the Santa Barbara Channel about 1½ miles off Goleta. With production from the platform shut down since the May 2015 breach of a distribution pipeline near Refugio State Beach, Venoco declared bankruptcy earlier this year. Click to view larger
Venoco Inc.’s Platform Holly rises from the Santa Barbara Channel about 1½ miles off Goleta. With production from the platform shut down since the May 2015 breach of a distribution pipeline near Refugio State Beach, Venoco declared bankruptcy earlier this year. (Sam Goldman / Noozhawk file photo)

“This is the most important part of the effort — the plugging and abandoning,” she said. “This is what is going to make all the facilities safe.”

Phase three includes the final decommissioning and removal of the offshore infrastructure. Lands Commission staff anticipate the development of the decommissioning plan to begin about 18 months after the start of the plug-and-abandon process.

The specifics for the third step have not yet been determined and are highly dependent on funding, Lucchesi said.

The Lands Commission has a $22 million bond with Venoco and, according to Lucchesi, is “an active participant in the bankruptcy proceedings and submitting claims against the Venoco estate to cover the remaining cost of the plugging and abandonment and decommissioning.”

“We have question marks for anything past $22 million,” said Seth Blackmon, staff attorney with the Lands Commission, adding that cost estimates for phase two are as high as $75 million, and the number climbs to more than $120 million when decommissioning the offshore infrastructure is included.

The Lands Commission staff is also looking at prior operators and the extent of their responsibility and liability, Lucchesi said.

The commission, she said, has been “successful” in receiving emergency funding from the state to help start the plugging-and-abandonment process.

“There’s a lot of interest to the facilities after the plugging and abandonment,” Lucchesi said. “It’s an important issue for the local community and the state. We have not focused on any details about the options because our focus is plugging, abandoning and making the facilities safe.”

At a town hall meeting last Thursday at Goleta City Hall, Lucchesi highlighted the history of Platform Holly, which was constructed and put into operation in 1964.

The platform has been out of production since the May 2015 rupture of a pipeline owned by Plains All American Pipeline near Refugio State Beach on the Gaviota coast. More than 123,000 gallons of crude oil leaked from the beach, onshore and into the ocean.

The purpose of the town hall was to provide a status update on the efforts to decommission Platform Holly and the pier facilities, as well as to address community questions.

More than 60 community members attended the meeting. A handful of speakers expressed concern about marine life, public health and the removal of the onshore facility.

“I grew up looking at the facilities weekly, if not daily,” First District County Supervisor Das Williams said. “The removal of the facilities is important to Santa Barbara County, particularly the communities of Goleta, Isla Vista and the Ellwood neighborhood.

“I’m hoping that we won’t have to clean up this mess decades from now.”

The City of Goleta plans to hold a community meeting once city officials better understand the scope of the Lands Commission’s jurisdiction, Mayor Paula Perotte said.

“I can guarantee Goleta’s top priority during this decommissioning process: We will protect public safety and the environment,” she said. “We promise to keep the public informed about developments along the way.”

Click here to view the two-hour Lands Commission meeting in its entirety. The meeting will be rebroadcast at noon and 6 p.m. Wednesday on Channel 104.148 (Channel 19 for Cox subscribers).

Noozhawk staff writer Brooke Holland 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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