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110 public speakers turned out for this week's hearing on the proposed drilling project

Len Wood / Santa Maria Times

110 public speakers turned out for this week's hearing on the proposed drilling project


Enviros Successfully Challenge Oil Drilling Project

County Makes Santa Maria Energy Reduce Its Greenhouse Gas Emissions


Wednesday, November 13, 2013

“Today, we’re here to talk about a number of things,” said Nathan Alley, an attorney for the Environmental Defense Center. From jobs and taxes to oil leaks and environmental disasters including the 1969 oil spill in Santa Barbara and the recent typhoon in the Philippines, supporters and opponents of Santa Maria Energy’s proposed 110 new oil wells did talk of many things Tuesday, all in their efforts to convince the Board of Supervisors to reject or uphold an appeal of the project’s permitted greenhouse gas emissions.

But after nearly six hours of impassioned comments from the public, pointed arguments from representatives for the Environmental Defense Center and Santa Maria Energy, and heated deliberation among themselves, the supervisors voted 3-2 to require Santa Maria Energy to further reduce its greenhouse gas emissions — down to 10,000 metric tons per year from the previously approved 62,000, at an estimated annual cost to the company of $500,000.

“We are very disappointed that the Board of Supervisors chose to not follow the recommendation of their staff, and we need to analyze this decision further because we have to live in the real world of economics,” said Bob Poole, Santa Maria Energy’s public and government affairs manager, after the vote. “The project has to work for us, or we can’t do it.” The company, Poole added, has 30 days to decide if it wants to sue the county over the decision.

Tuesday’s meeting wasn’t so much a question of if the project, proposed in 2009, would become reality, but how much it would cost the company and the environment. The EDC’s appeal asked that the 110 new cyclic steam injection wells — there are 26 pilot wells on site — be held to a more stringent standard than approved by the county’s Planning Commission, on a 3-2 vote, in September. While the commissioners had voted to hold Santa Maria Energy to a 29 percent greenhouse-gas emissions threshold — meaning the 136 wells’ projected yearly emissions of 88,000 metric tons would be reduced to about 62,000 — the supervisors’ decision will nail the company to a far stricter flat limit of 10,000 metric tons per year.

That 10,000-ton figure was one of the requests of the EDC’s appeal. The law firm had maintained that the 29 percent figure is unprecedented and lower than the long-standing 10,000 metric tons per year threshold the county has borrowed from other jurisdictions since the passage in 2006 of California’s Global Warming Solutions Act (AB 32). Under the law, which aims to reduce the state’s greenhouse gas emissions to 1990 levels by 2020, such energy projects are to be held to at least a 15.3 percent emissions threshold or to reduce or offset with carbon emission credits projected emissions by that amount, although local jurisdictions can be stricter.

Projected to produce 3,300 barrels per day, the 110 new wells, proposed for 32 acres on the company’s Orcutt Oil Field property, would come with two steam generators — the main emissions contributors — as well as an oil pipeline and a water pipeline that would transfer 300,000 gallons daily of recycled wastewater from the Laguna County Sanitation District. The steam would be injected into the porous diatomaceous earth, thinning the oil and releasing it from the pores. It’s not fracking, Santa Maria Energy officials have said, because it doesn’t break the rock.

The EDC’s appeal claimed that the company could negate its emissions entirely, for about $1 a barrel. But Poole has called that claim unfair given the company’s 7.5 percent return-on-investment — Apple makes 20 percent, he said — or about $7.50 per barrel. Nonetheless, Alley said he was pleased with the decision: “We are satisfied with what happened today,” he said. “We’re satisfied that the status quo has been maintained. Ten thousand metric tons is a heck of a lot better than 50,000 or 60,000 metric tons.”

Supervisor Steve Lavagnino
Click to enlarge photo

Len Wood / Santa Maria Times

Supervisor Steve Lavagnino

The 3-2 vote — Supervisors Steve Lavagnino, who gave an impassioned speech, and Peter Adam, who made a failed motion to ease the threshold to the state’s prescribed 15.3 percent, voted no — means that if the project’s emissions exceed 10,000 metric tons per year, Santa Maria Energy will have to employ on-site mitigation measures or buy reduction credits, which county staff said cost anywhere from $2-$8 per metric ton, or the aforementioned estimated $500,000 a year. That amount could fluctuate year to year based on the quantity of emissions the company produces and how the credits market varies.

In what one of the 110 public commenters said seemed like a “civil war between North and South County,” Santa Barbara County residents — from climate change deniers and science teachers to Santa Maria Energy employees and millennials concerned about the planet they’ll inherit, and for many seniors, the one they’ll leave behind — argued to the supervisors the project’s benefits and drawbacks. Proponents of the project, many of whom wore yellow in line with the company’s honeycomb logo, invoked jobs (50-75 permanent full-time positions, according to Santa Maria Energy officials), as well as property tax revenues ($3 million a year) for the county’s general fund and schools, and a yearly economic spurt ($170 million) for the county.

Opponents of the project, however, cited concerns about what could go wrong in the wake of what could go right. They worried about everything from oil seeps — a subject the supervisors looked at earlier in their meeting — and the detriments to farmland and health, to the overall effect the emissions would have on climate change. According to the federal Environmental Protection Agency, 62,000 metric tons per year — the figure approved by the Planning Commission—is the equivalent to the emissions from 12,900 cars. Ten thousand metric tons equals just over 2,000 cars.

“There’s certainly no doubt in my mind that global warming is real and has been accelerated by human activity, particularly the burning of fossil fuels,” said 3rd District Supervisor Doreen Farr, who voted in favor of the stricter threshold. Farr noted that she has visited the proposed site and understood the economic incentives, but that greenhouse-gas emissions’ environmental toll required the county to “pick up the pace.” First District Supervisor Salud Carbajal and 2nd District Supervisor Janet Wolf, who each voted for the 10,000 metric tons figure, both stressed the need for the county to “balance” its economic interests with its environmental concerns.

Beth Marino, Santa Maria Energy's vice president of legal and corporate affairs
Click to enlarge photo

Len Wood / Santa Maria Times

Beth Marino, Santa Maria Energy’s vice president of legal and corporate affairs

In arguing the case for Santa Maria Energy, Beth Marino, the company’s vice president of legal and corporate affairs, said imposing the 10,000 tons per year threshold would make Santa Barbara County seem inhospitable to business. “We live in this community, and we take our responsibilities seriously,” she said, referring to the berms surrounding the facility and its live monitoring system and environmental protections. “No single project can be held solely responsible for climate change,” she said.

Joining Adam in voting against the stricter limit was Lavagnino, visibly tweaked by the EDC for not reaching out to him. “I didn’t get a phone call; I didn’t get an email; I didn’t get a contact from anybody at the EDC,” he said. “They just felt like, ‘It doesn’t matter. We’ve got our votes. We’ve got this thing in the bag. We’re not going to talk,’” Lavagnino continued, saying he believes in climate change. “I think we do need alternative energy. But how many wind projects have been brought before us? How many solar projects? How many wave technology projects?

“You’re not hurting an oil company today. You’re hurting a community,” he went on, noting several of the nonprofits that Santa Maria Energy contributes to. Lavagnino also admitted that he has “softened considerably” on social issues like programs for the homeless and mentally ill, but that those services require funding that revenue from the project could generate. And forcing the company, Lavagnino said, to spend $500,000 a year on reduction credits — which don’t have to be purchased from California companies and aren’t currently available in-county — isn’t right. “Don’t cost this county millions of dollars so we can go plant trees in another state,” he said.

Tuesday’s vote didn’t set an official county standard, but it could make the case for the 10,000-ton mark stronger for future projects. For instance, before the supervisors dealt with Santa Maria Energy, they discussed 85 emergency 15-foot-long seep cans recently installed by Pacific Coast Energy Company, an oil company whose own 96 cyclic steam injection wells — approved in 2006 — sit right next door to Santa Maria Energy’s proposed wells at the Orcutt Oil Field.

According to the county, steam injection is believed to exacerbate the occurrence of naturally occurring seeps, and although Pacific Coast Energy Company has since taken action to prevent 90 percent of new leaks, some supervisors questioned if Santa Maria Energy’s new wells could seep, too. Buried under that discussion was Pacific Coast Energy Company’s recent application for 96 more steam injection wells.

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