Venoco Inc.’s lease-line adjustment proposal may not go before the State Lands Commission until summer at the earliest, but commissioners have implied that the project is already dead in the water.
As part of the proposed adjustment, the oil company would return 3,800 acres of its lease — including all of the near-shore area off Goleta — to the state of California in exchange for 3,400 new acres east of its current boundary.
In September, Venoco upped the ante by offering to close down the field’s Platform Holly and the Ellwood Onshore Facility 15 years earlier than in the original lease-line adjustment request, and subsequently cede its leases back to the state.
Right now, there is no set end date for Venoco’s offshore leases, which means it can extract oil and gas as long as it deems it to be economical, which the company estimates to be roughly 40 years based on current technology.
“Oil drilling must not be expanded,” said State Lands Commissioner and state Controller Betty Yee in a Jan. 31 statement about the proposal.
“The Santa Barbara Channel is a world-renowned habitat that hosts vast terrestrial and marine diversity that deserves protection from the adverse environmental impacts of further oil drilling.”
Lt. Gov. Gavin Newsom was blunter when the Venoco project came up during public comment at the commission’s Feb. 7 meeting.
“I wanted to just say that project’s dead,” he said. “But that would be my opinion, which I guess I can express. As the Controller expressed hers in writing, I’ll do it more publicly.”
Newsom and Yee are joined on the commission by California Department of Finance director Michael Cohen.
Commission spokeswoman Sheri Pemberton told Noozhawk that commission staff are currently revising portions of the project’s draft environmental impact report for recirculation. The draft EIR was originally circulated last fall.
Once the final EIR is completed, the project will go before the commission, which Pemberton said will not be its next meeting on April 20. Commission staff are still processing Venoco’s application, she added.
According to Yee, the State Lands Commission has not approved new coastal oil drilling in California since 1969 — the year of the Santa Barbara oil spill, which helped spur the modern environmental movement.
Platform Holly, from where the oil is drilled, is the only remaining platform in state waters in the Santa Barbara Channel. It was rendered nonoperational after the May 2015 Refugio oil pipeline leak.
In December, the commission adopted a resolution supporting the Obama Administration’s ban on new offshore oil and gas development in the Outer Continental Shelf offshore California.
The resolution opposed attempts at modifying the ban, and directs commission staff to ensure the ban remains in place.
Venoco’s proposed acreage exchange would leave 20 million barrels of oil in the ground while opening up access to 60 million barrels in the new area, Chris Peltonen, Venoco’s Southern California geoscience manager, told Noozhawk in September.
The plan would close down and remove Platform Holly, two miles off the Gaviota coast, and the onshore facility on Hollister Avenue between Sandpiper Golf Club and Bacara Resort & Spa after 25 years.
Venoco would then “quit claim” its leases back to the state. The proposal also commits Venoco to halting any plans to move forward with its Paredon project leases just off the coast of Carpinteria.
Extracting the new oil will not require any new infrastructure, company officials have said. Six of the 30 well slots Venoco already operates in the oil field would be extended horizontally eastward in the Monterey Formation to get at the oil.
The company told Noozhawk in September that fracking is not part of the proposal.
Venoco’s local operations have been stalled since the Refugio spill and the subsequent shutdown of the ruptured line that took its oil to market. The pipeline was operated by Plains All-American Pipeline, which Venoco later sued for lost profits.
“We’re hopeful commissioners will take the time to examine the final environmental review and reconsider the benefits of this proposal,” Venoco Chief Operations Officer Mike Wracher said in a statement.
“We’re confident that when folks see past the heated politics of the moment and look at the details and promise of this project, they will recognize that it not only provides important economic and energy benefits to the state and local communities, but also helps meet our environmental goals through its early end of offshore oil production off the Central Coast. The status quo does neither.”
Environmental groups cheered Newsom and Yee’s comments.
“The State Lands Commissioners’ opposition to Venoco’s plans to expand drilling offshore Santa Barbara County represents a significant step towards protecting our environment, public health and economy, all of which rely on a clean coast,” Linda Krop, chief counsel of the Santa Barbara-based Environmental Defense Center, said in a statement.
The new drilling would take place in ecologically sensitive areas like the Campus Point State Marine Conservation Area, environmental groups say.
For many in Goleta, however, Venoco’s operations can’t end soon enough.
Environmentally minded residents bristle at the notion of oil operations in their backyard with the Refugio spill still a fresh memory. City Hall is eager to shut down Venoco’s Ellwood Onshore Facility, which is considered a legal nonconforming use of land zoned for recreation.
If the city does shut down the facility, Venoco’s only choice would be to send oil via pipeline to Las Flores Canyon for processing, Krop said.
A city study, she pointed out, found that Venoco recouped its investment in the EOF in 2009.
“They could do that and keep producing, or they could decide it’s not worth it,” she told Noozhawk. “Even if they did have to shut down, it’s not like they’ll be doing it at a loss.”
Venoco’s own amortization study said it would recoup the investment in another 40 or so years — what it says is the lifespan of the South Ellwood Oil Field.
In 2015, the city sued the State Lands Commission over its approval of restarting Venoco’s oil-production facility at Haskell’s Beach, alleging the commission violated the California Environmental Quality Act by certifying an inadequate EIR.
That case is still in Santa Barbara Superior Court.
— Noozhawk staff writer Sam Goldman can be reached at sgoldman@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.