Article taken from the Santa
Barbara News Press
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Oil & Water
VENOCO WANTS TO DRILL IN
STATE SANCTUARY
Plant expansion will face zoning hurdles
By
MELINDA BURNS
NEWS-PRESS SENIOR WRITER
10/09/05
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| A fisherman puts out lobster traps near Venoco Inc.'s Platform Holly. Venoco's proposal to expand its Ellwood operation includes dismantling two storage tanks (shown below right, behind company Vice President Mike Edwards) and ceasing its barge operation -- a project Coal Oil Point Reserve director Cristina Sandoval, below left, believes will benefit the environment. |  |
Back in 1929, an oilman called it "the rape of Ellwood" -- the furious scramble to drill hundreds of oil wells on the beach west of Coal Oil Point. The discovery of oil at Ellwood briefly made the South Coast one of California's leading producers of crude, and taxes from the field helped pay for things like the rebuilt Santa Barbara County Courthouse. But the oil rush left a legacy of junk behind. As the boom went bust, the drillers abandoned their piers, pilings and cables to rot and rust in the sand. One of these remnant piers, an unsightly structure popular only with pelicans and cormorants, is expected to be knocked over with explosives this week, 75 years after it was erected. A new platform for the birds is going up in its place.
But even as the pieces of the old Bird Island settle on the ocean bottom, plans are under way to expand oil operations at Ellwood, drilling into reserves that were impossible to reach in the 1930s.
Venoco Inc., the owner of Platform Holly offshore and a processing plant onshore, next to Bacara Resort & Spa, is proposing to extend the boundaries of its lease at Coal Oil Point eastward into California Coastal Sanctuary waters. Using extended-reach technology, Venoco wants to drill horizontally from Holly under the sea floor to reserves three miles away off Isla Vista and UCSB. No new platform would be needed.
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The project cost, including 40 new wells snaking off from Holly, is estimated at $110 million. If it is approved, Venoco would be the first to drill into a state sanctuary from a state lease. New oil leasing is banned in state waters, which extend three miles from the California coast.
THIRD TIME A CHARM?
Venoco's proposal marks the third time in the past 20 years that an oil company has proposed drilling into the Ellwood field off Isla Vista. Ellwood oil is medium-grade, suitable for refining into gasoline -- better-quality crude than what lies under some of the leases farther north off Vandenberg Air Force Base.
In the mid-1980s, the Atlantic Richfield Co. estimated it could produce up to 80,000 barrels of oil a day by erecting three new oil platforms off Isla Vista, but the state Lands Commission and county Board of Supervisors rejected the plan. A disgruntled Arco official said he doubted the Isla Vista leases would ever be developed, saying that "unless there is some kind of world catastrophe, we don't see much in the way of offshore development in California."
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In 1995, UCSB and the county squelched plans by the Mobil Oil Corp. to drill into the Ellwood reserves from land. Calling its project "Clearview," Mobil had proposed dismantling Holly and erecting a 175-foot-tall drilling rig next to the Devereux Slough. Opponents dubbed the plan "Drillview."
Now, with oil prices at $66 per barrel, Venoco appears eager to try its hand. In addition to the lease expansion, the company wants to reactivate an idle oil well and a wastewater well in the surf zone at the end of two piers on Ellwood Beach. Mobil shut down the wells in 1994 after oil leaked under the Sandpiper Golf Course. Potential production from the oil well on the beach is estimated at 700 barrels per day.
"The field has almost reached its economic limit, which means this well will have a short production life," said Mike Edwards, vice president of Venoco. "The sooner this well starts production, the sooner it will be gone," he said. "We can then permanently abandon the wells, remove these piers and return this section of the coast to pre-1929 conditions."
Mr. Edwards limited his comments on these latest proposals, saying that the company's applications to the county and city of Goleta were incomplete. In the documents, Venoco states that drawing more oil out of the Ellwood field would improve air quality by easing pressure on the underground reservoir, so the natural seeps would get smaller and release less pollution.
While the extensions would add to Venoco's reserves, Mr. Edwards said that when combined with accelerated production, "the result is a project life not much different from current lease boundaries."
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Laura Loustaunau and Jeff Miller pause during a walk along Ellwood Beach to check out the underside of the Venoco piers. |
Venoco estimates that expanding into the reserves off Isla Vista would triple the oil production from Holly, to a peak of 12,600 barrels per day. Natural gas production would quadruple, to a peak of 20 million cubic feet per day.
But the proposals have aroused the indignation of some South Coast residents, who note that Arco relinquished the Ellwood leases off Isla Vista to the state Lands Commission in 1991. In return, the commission gave Arco the right to expand its operations in Long Beach. It was all part of a court settlement of Arco's $800 million lawsuit against the state.
"We thought that was the end of it," said Carla Frisk, a spokeswoman for Get Oil Out (GOO), a citizens watchdog group. "I don't think anybody foresaw that there should have been a binding agreement that extended to future owners. Maybe that was a mistake."
Venoco's plans also have left some Goletans wondering why they bothered to raise more than $20 million to save Ellwood Mesa from housing development. The monarch butterfly grove, native grasslands and vernal pools on the bluffs above the beach are a magnet for nature lovers.
"There's a huge investment at Ellwood," said Diane Conn, program director for Citizens for Goleta Valley, a nonprofit group. "Why would we want to muck it up with an oil accident? All it takes is one stupid mistake and we've got the whole mouth of the slough contaminated."
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| Venoco Inc. wants to reactivate an oil well and a wastewater well in the surf zone at the end of these two piers on Ellwood Beach near Bacara Resort & Spa, part of a broader plan to expand its Ellwood operation. | |
As for restarting the two wells on the beach, Ms. Conn said, "It's a waste of our time to even have to deal with it. It flies in the face of the community to want to drill oil right there on the shoreline, in an area that's so sensitive."
Santa Barbara County is doing more than its share with 19 oil platforms along its coast, Ms. Conn said. "If they really care about us, they should understand how long we've lived with this oil production near our shore," she said. "We've really had enough."
NO MORE BARGE
But even Ms. Conn and Ms. Frisk approve of some of Venoco's plans -- mainly, the company's proposal to dismantle and remove two large oil storage tanks next to the Devereux slough and to discontinue shipping oil by barge.
The tanks were discovered to be leaking earlier this year and are undergoing major repairs, which Venoco expects to be completed in about a month. The barge anchors three times a month at a mooring off Ellwood Beach, filling up with oil from the tanks. It is the only marine terminal in state waters off the tricounties.
In its place, Venoco plans to build an oil pipeline from its processing plant to Las Flores Canyon, 10 miles up the Gaviota coast on the north side of Highway 101. The firm's proposal would have the pipeline operational by 2007. At Las Flores, Venoco's oil would be routed to Los Angeles.
Cristina Sandoval, the resident director of UCSB's Coal Oil Point Reserve, said she and the docents who guard the Western snowy plovers on Sands Beach have noticed nauseating propane odors when the barge is anchored, just half a mile away. They have made complaints, Ms. Sandoval said, but Venoco tells them the smells are coming from natural seeps.
"We are right in front of their barge operation," she said. "We know that we don't smell this odor any day the barge is not here. We've never felt we're taken seriously. I would love to see this barge operation disappear."
According to Venoco, much of the pollution at Ellwood will disappear once the barge and its tugboats are gone, along with the onshore tanks.
"Abandonment of the Ellwood marine terminal and cessation of barging will eliminate the long-term risk of a hydrocarbon release in the sensitive West Devereux Slough area," Venoco states in its application. The risk of an oil spill, it says, "will be reduced to zero."
Yet according to the county Air Pollution Control District, Venoco's Ellwood operations -- not including the storage tanks or the barge -- released 160 tons of hydrocarbons and other smog-creating pollutants into the air in 2004. The amount is legal under Venoco's permit -- but it makes Venoco the fourth largest industrial air polluter in the county. (The top three are the Celite Corp. a diatomaceous earth mine outside Lompoc; Platform Harvest, owned by the Plains Exploration and Production Co., off Point Arguello; and BreitBurn Energy Co., owner of the old Unocal oil field on Orcutt Hill, south of Santa Maria.)
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Since 2000, the air district has issued 50 notices of violation against Venoco at Ellwood, 34 of them at the oil and gas processing plant, records show. The violations included faulty report-keeping, unplanned flaring of gas, and oil and gas leaks.
With or without an expansion, the company's lease with UCSB for the storage tank property will expire in 2016. University officials say they are not considering renewing it; they want to return the property to open space. As for the mooring lease, it is under review by the Lands Commission and could expire in 2013.
"If we support Venoco's project in order to get rid of the marine terminal, we're not really gaining that much," said Ms. Frisk, the GOO spokeswoman. "It's not really a great deal for the environmental community."
Goleta Mayor Jean Blois said she is most concerned about Venoco's plans to expand operations at the Ellwood processing plant, which was built in 1964. The plant operates around the clock. Some residential neighborhoods are less than half a mile away, and a number of new homes are proposed north of the slough.
"We have never encouraged them to enlarge the plant at all," Ms. Blois said. "Residents have often complained about it in the past."
Local policies limit new onshore oil and gas development along the coast to Las Flores Canyon and Gaviota. Without rezoning, city and county officials told Venoco, the company's onshore plant expansion cannot be approved.
Local governments also have requested information on the possibility of shipping oil from Holly by pipeline to a processing plant in Ventura, bypassing Ellwood entirely. They contend that Venoco should move its gas processing to Platform Holly.
e-mail: mburns@newspress.com
STEVE MALONE / NEWS-PRESS PHOTO