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Governor Arnold’s Big Oily Surprise

Disputed Santa Barbara Offshore Oil Deal Makes a Comeback

By Jerry Roberts

Thursday, May 21, 2009

Governor Arnold Schwarzenegger’s bid to resurrect a defeated plan to authorize a new lease for oil drilling off the Santa Barbara County coast caught environmentalists by surprise, and suddenly reignited a family feud that had finally cooled.

“This hit us out of the blue,” said Linda Krop, chief counsel for the Environmental Defense Center (EDC), who stands squarely in the middle of the dispute. “Things are changing by the minute.”

Pedro Nava
Click to enlarge photo

Paul Wellman (file)

Pedro Nava

Last week, faced with a looming budget deficit of more than $20 billion — $553 worth of red ink for every man, woman, and child in California — the governor set forth an ugly agenda for fixing the mess. Included in the long list of cuts, cuts, and cuts was a lonely proposal to raise revenue — $1.8 billion during the next 14 years — by resurrecting the Tranquillon Ridge offshore oil project, which was turned down by the State Lands Commission last January.

That deal, negotiated between the EDC and the Houston-based PXP Energy Company, involved a novel swap to give both sides some of what they wanted: PXP, already drilling in federal waters off the coast near Vandenberg Air Force Base, would gain additional drilling rights in nearby state waters until 2022; in exchange, they agreed to permanently shut down four existing platforms that year, along with a batch of other pro-environment concessions.

“You cannot get away from the fact that it’s still the first new offshore lease in California since the [1969] oil spill,” he said in an interview from the Assembly floor. “It doesn’t matter how much lipstick you put on that pig.” — Pedro Nava

The agreement split environmentalists, as the EDC and its many allies argued that trading expanded drilling in the short term for the long-term benefits of permanent platform shutdowns was worth it. Veteran coastal advocate Susan Jordan, who joined her husband/Assemblymember Pedro Nava and a handful of other environmentalists, disputed that there were no ironclad guarantees about shutdowns and that, in any case, agreeing to more drilling in Santa Barbara sent a terrible political message that could only encourage efforts to drill off California.

The governor and his advisers failed to check in with local environmental backers of the project before going public, which left the EDC in an awkward position, scrambling to learn details of exactly what was being proposed. On Friday morning, Krop told the Associated Press she was strongly against the plan; when I talked to EDC’s Executive Director David Landecker a few hours later, he sounded much more open to it. By Monday, though, EDC was back to leaning strongly against the governor.

“We’re definitely hearing a whole lot more concern about this process,” Krop said, after a weekend taking the temperature of the enviro community. “We [want] to make sure that whatever process unfolds is fair, and respectful of the various agencies and jurisdictions.”

As a political matter, Schwarzenegger’s surprise move raises two key, separate but related questions:

• On the merits: Should the substance of the original PXP deal be pursued politically, in an effort to overcome the State Lands Commission’s vote against it?

• On process: Is Schwarzenegger’s proposal, essentially to end-run the State Lands Commission vote through a legislative budget trailer bill, proper?

At press time, a consensus among environmentalists seemed to be coalescing in opposition to Arnold’s proposal; opinions remain polarized about the PXP deal itself, however. The dynamic is clear in the Jordan/Das Williams Democratic primary race for Nava’s soon-to-be-vacant seat. Williams got in, earlier backing Jordan, for the stated reason that she opposed EDC’s deal.

Williams said he “stands with EDC” in looking for alternative ways to breathe new life into the agreement with PXP, and to address environmental concerns raised by Lands Commission staff. But he added, “It’s not right to sidestep the process just because [the commission vote] didn’t go our way.”

“My gut feeling is [Schwarzenegger’s plan] is the right thing obtained the wrong way,” he said.

Jordan remained adamantly against the whole deal, arguing that “the production shutdown dates in the confidential PXP deal were not enforceable” and that PXP’s promise to donate 3,500 acres of onshore property is also shaky.

“At a time when California, and local and statewide environmental groups are asking the federal government not to allow new drilling off its coast in federal waters,” she said, “the kind of dramatic shift in state policy that PXP represents needs to be debated thoroughly at the highest levels, to follow California’s existing laws — not be rammed through in the dead of night in a budget trailer bill.”

Nava, a leader of the Legislature’s Coastal Caucus, was less subtle. “You cannot get away from the fact that it’s still the first new offshore lease in California since the [1969] oil spill,” he said in an interview from the Assembly floor. “It doesn’t matter how much lipstick you put on that pig.”