Monday, April 25, 2005

A New Wave Of California Drilling

California's heavy crude offshore has largely been offlimits to oil companies ever since a 1969 well blowout in Santa Barbara that fouled 40 miles of beach and hundreds of square miles of the Santa Barbara Channel, eventually turning up in the channel islands of Anacapa, Santa Cruz, Santa Rosa, and San Miguel. The political blowout (PDF), as surprising at the time as it was vigorous, drew together people of all kinds of political backgrounds, causing then-President Nixon to remark that the "incident has frankly touched the conscience of the American people."

That's where things lay for several decades, but now smaller exploration and production companies, pursuing the higher prices available today, have quietly restarted, according to the Los Angeles Times:

Drillers are reworking wells and considering reviving old platforms in places where exploration is allowed. They're attempting to extend the life of leases on undeveloped offshore tracts holding a combined estimated 1 billion barrels of oil and 500 billion cubic feet of natural gas that the companies have been forbidden to tap.

And, most controversial of all, the industry has been pushing quietly to lift federal bans on new oil exploration off California's coast, prompting an outcry by environmental groups.


"We're sacrificing pristine areas with the disingenuous claim that it will relieve high gas prices tomorrow, and that's just not true," said David Newman, spokesman for the Natural Resources Defense Council, one of 10 environmental organizations that recently sued the Bush administration for recommending the extension of 36 leases of undeveloped tracts off the California coast.

A number of companies are thinking about restarting operations offshore, including Carpenteria-based Venoco, Pacific Energy Resources Ltd., Aera Energy, Exxon/Mobil, and Arguello are all looking into opening up existing wells that have been shut in (filled with concrete) in Long Beach and Santa Barbara. New drilling activity, however, still seems to be off-limits:
California for many years has blocked new exploration in state waters, which lie within three miles of the coast, where leases have not already been granted. Drilling in new federal unleased areas is prevented by a presidential moratorium instituted in 1990 and due to expire in 2012 and a congressional moratorium that has been renewed each year since it was enacted in 1981.
Environmental groups filed a lawsuit on March 8 to prevent further activity; they claim that even though the leases are inactive, oil companies continue to press for their extension by minimizing the environmental damage caused by their presence, citing surveying activity that causes damage to marine life. Some in the industry think with high oil prices, renewed drilling activity might take place, but
"Realistically, any drilling would be years down the road. Some of the plans, if they come in, could be within five to 10 years," [John Romero, spokesman for the Interior Department's Minerals Management Service,] said.
Nothing is certain, of course, as with any drilling activity, and the industry still recalls problems at the Point Arguello project in the 1980s, which was attended by years of expensive lawsuits and ultimately found little produceable petroleum.
But H. Sterling Burnett, senior fellow at the nonprofit and nonpartisan National Center for Policy Analysis in Washington, says energy company officials are eager to tap the outer continental shelf, where untouched energy reserves may be bigger than estimated, perhaps exceeding those in Alaska.

"The companies would not be fighting to have the leases extended if they didn't think there was the potential of a big find," Burnett said. "We suspect there's more oil off the coast than there is in ANWR."