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Posts Tagged ‘MMS’



Calbuzz Secret Plan to Plug Gulf Coast Oil Gusher

Thursday, May 27th, 2010

Along with the rest of the nation, Calbuzz finds ourselves in the unlikely position of rooting for the predatory greedbags at BP, desperately hoping they succeed with their latest half-baked scheme to stem the poisonous, filthy geyser of oil that their rapacious recklessness has sent spouting from the sea bottom in the Gulf of Mexico.

The avaricious thieves at BP are trying to stop the toxic torrent with a method called “top kill” which, as the New York Times explains, “involves pumping thousands of pounds of heavy fluids into a five-story stack of pipes in an effort to clog the well .”

Sounds good, but we have one important suggestion:

Instead of thousands of pounds of “heavy fluid,” why not jam up the hole with thousands of pounds of “ bungholes and bores,” the kind of self-absorbed pols and media celebrities who give Calbuzz a major pain, stuffing them down in there until the flow is stopped by the sheer mass and weight of every annoying and unbearable cretin, nitwit and schmuck we can round up.

Feel free to email us your own list of candidates, but for our money, here’s the Top 10 List of “Top Kill” nominees to squish down into the well.

1-Chris Matthews – How we wish this self-deluded pea brained, loudmouth putz, who keeps setting new standards of stupidity, would choke down a couple barrels of sulfurous crude, which might be just the thing to cure his chronic case of logorrhea. Of course, then we couldn’t watch him.

2-Glenn Beck – By itself, the combination of Beck’s fat head and fat ass could be enough to seal off the entire pipe, particularly if we throw his friggin’  blackboard in there with him. Plus: the phony tears this repulsive wiggler loves to shed on cue could take the place of that “heavy fluid” the Times keeps mentioning.

3-Gavin Newsom – The vast clouds of natural gas pouring from the well would help Newsom keep his over-inflated sense of self-importance at a high level, and he’d never even notice a couple thousand extra gallons of oil in his hair.

4-Sarah Palin – Corking up an oily hole would be cosmic justice for Ms. Drill Baby Drill and, given her latest whack job Facebook rant, she’d no doubt be well-pleased to escape the prying eyes of Joe McGinnis.

5-Arlen Specter – The ghastly and decrepit octogenarian has-been is well-suited to navigate any unexpected twists, turns and bends in the undersea pipe, given his sorry history of political contortions, not to mention his authorship of the Magic Bullet theory.

6-John Boehner – A good thick coating of rust-colored grease is just what the insufferable House minority leader needs to keep his unnatural skin color slick and shiny, not to mention that the federal deficit will likely plummet when taxpayers quit forking out for his daily spray man tans.

7-Lindsay Lohan – A mile beneath the Gulf of Mexico is just about the only place Lilo could possibly succeed in not having a drink, or getting a spoon stuck up her nose, for five minutes. The only non-pol to make the list, she’d also finally get a break from her monstrous father, Michael.

8-Bill Clinton – That massive pie hole of his is big enough to head off half the goo destined for the coast of Florida, and the cruel sacrifice of him not being able to hear himself talk for the first time in six decades is worth the chance he might win a special citation Nobel, finally getting even with that anti-fossil fuel goody-goody Gore.

9-Rand Paul – He’s no doubt right that Barack Obama’s bashing of BRITISH Petroleum is un-American, so here’s his chance to be a hero on behalf of private enterprise, nice and cozy in the one place he doesn’t have to worry about people who look different plopping down in a seat next to him.

10-Arnold Schwarzenegger – Putting aside the high-value, practical plugging worth of his bulging pecs, lats and glutes,  the guy ain’t good for much else, let’s face it.

Black Gold, the sequel: On Tuesday, we told you about Democrat John Laird whacking Republican Sam Blakeslee with an ad about offshore oil in the special election race in the 15th senate district, one of two  campaigns in the neighborhood where the issue takes center stage.

A little further south, a hotly contested primary battle in the 35th Assembly District, in Santa Barbara and Ventura counties,  has Democrats and environmentalists divided in their support for coastal advocate Susan Jordan and S.B. city councilman Das Williams.

The district has been ground zero in the long-running battle over the now defunct Tranquillon Ridge plan, and the Jordan-Williams match-up is the political manifestation of local polarization over the project.

Jordan is married to termed out 35th AD Assemblyman Pedro Nava, who led the successful fight against T-Ridge in the Legislature, and when she first announced her candidacy to succeed him last year, Williams said he was backing her.

But Jordan was fighting fiercely against the offshore proposal, which was backed by other local enviros, including Williams, who in short order  dropped his backing of her to declare his own candidacy, saying he was doing it because of T-Ridge, co-sponsored by several Santa Barbara green groups and PXP oil company.

Fast forward to the present, and the two are exchanging volleys of mailers and angry charges on the subject. Williams, seeking to inoculate himself, sent out a brochure  highlighting his past opposition to drilling, without mentioning the politically complicated PXP matter; Jordan counter-punched hard, with a mailer featuring a big ole color photo of the Deepwater Horizon exploding and burning, with a screamer headline: “Das Williams supported the PXP oil drilling deal – even after the Gulf spill.”

At which point the local Democratic county committee, which is led by a close pal of Williams, called a press conference to denounce Jordan for alleged dirty campaigning, a move that served to make it more likely that the PXP offshore drilling will be the decisive issue in the race.

We’re just sayin’: One of the big issues in the T-Ridge debate was whether or not the state would have the power to enforce end dates for PXP to stop drilling off federal platforms near Santa Barbara, a key feature of the proposal.

Jordan, among others, repeatedly insisted the authority on the federal leases would eventually rest with the U.S. Minerals Management Service. and that the agency has a natural pro-drilling bias that could upset the whole deal. After reading the new Inspector General’s report on the MMS, it’s hard to argue with that position.

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Grabbag: Big Ideas, Bad Ideas, Burton Ideas

Wednesday, May 19th, 2010

One of the coolest new campaign tools we’ve ever seen was developed recently by 32-year-old Crystal Martin, a marketing consultant in Yuba City, who thought up and produced an audio mailer for Democrat Jim Reed of Redding, who is running against U.S. Rep. Wally Herger (R-Chico).

It’s an audio mailer — like those greeting cards you can get with recorded songs and voices — that recounts how Herger said “Amen, God bless you, now that’s a great American,” after a man stood up at one of his town hall meetings in Redding and declared himself a “proud right-wing terrorist.”

You can see the mailer here and listen to the pitch — mostly in Reed’s voice. But the mailer also includes a recording of  Keith Olbermann of MSNBC’s “Countdown,” who labeled Herger the “Worst Person in the World.”

Having raised very little money, Reed’s initial mailing was just 2,500. But the mailers generated attention, in the Redding Record Searchlight and on Daily Kos, after a writer for the blog got one in the mail and immediately wrote it up.

Martin, a graduate of UC Davis, said she came up with the idea at her daughter Lorelai’s fourth birthday party when the little girl threw away other birthday cards and was only interested in the one that had audio. “I had an epiphany,” Martin said. If she could do that for clients, people might actually listen to what they had to say.

So she searched until she found a company that could produce the voice chip in bulk and made it happen — for about $1.50 per mailer. The idea was so hot, she’s already picked up jobs from AARP and from a big conservation group.

Martin’s consulting business is Smart Marketing and her new venture is Mailpow, which also now has a system for recording individual voices which can then be sent to legislators, voters or whomever. Calbuzz is impressed.

Keeping score: We have great respect for Joel Fox, keeper of the Prop. 13 flame, even if we often disagree with him on policy matters, but his attempt to trumpet a third-rate poll, purportedly showing Meg Whitman 17 points ahead of Steve Poizner in the GOP primary, is utterly lame.

The survey is sponsored by Fox’s own Small Business Action Committee, and with him and his Howard Jarvis Taxpayers Association cronies strongly backing eMeg, the poll has zero credibility.

Its fanfare release was no doubt aimed at changing the campaign narrative showing Poizner closing fast on Whitman, but if the new PPIC poll, scheduled to be made public tonight, confirms that the GOP race is close, Fox’s move will look just plain silly.

As the outfit most afflicted with OCD about public opinion research methodology, Calbuzz is pleased to see that no one in and around the Rough and Tumble orbit bit on the Fox poll, except for radio talk show host and blogger Eric Hogue, who’s in the tank for Whitman anyway.

On the other hand, we totally agree with Hogue’s argument that Poizner’s dumb attack on eMeg over pornography is beyond the pale.

Putting aside the constitutional issues, the move not only looks desperate but also is likely to backfire: Whitman’s connection to porn being peddled on eBay is tangential at best, and raising the subject three weeks out from the election makes Poizner, not her, the one who seems sleazy.

As for Whitman’s new big idea, convening a statewide “grand jury” to investigate alleged waste, fraud and abuse in government spending: Really?  Brother Lucas over at California’s Capitol reported out this dog with fleas, and said most of what needed to be said to put it to rest.

Except for one item: As far as Calbuzz can tell, the governor doesn’t have the power to convene a grand jury. We asked Whitman’s campaign to tell us what authority would allow it and spokesman Tucker Bounds told us: “Meg would pursue legislation to create the Statewide Grand Jury on Fraud, Waste and Abuse.” Oh. So she wouldn’t have the power to do what she’s proposing unless the Democrats gave it to her? Right.

Shooting at lifeboats: Although Governor Schwarzmuscle’s abrupt withdrawal of support for the Tranquillon Ridge oil project off  Santa Barbara effectively killed the project, a just released analysis by the State Lands Commission suggests the proposal probably wouldn’t have won approval in any case.

The study, sent by Executive Officer Paul Thayer to the three members of the commission Tuesday, concludes that a revised agreement between the PXP oil company and Santa Barbara’s Environmental Defense Center did not allay several environmental and legal concerns that led to the project’s defeat last year.

After the commission, on a 2-to-1 vote, turned down the first PXP-EDC agreement in 2009, the oil company and the enviros reworked their previously-secret agreement and released a new version last month,  hoping the changes would overcome opposition by commissioner and state Controller John Chiang, or win the support of recently appointed Lieutenant Governor Abel Maldonado; the third member of the commission represents the governor, who strongly backed the T-Ridge proposal until his recent flip flop.

But a review by the staff of the commission concluded that promises by PXP to stop drilling in federal waters, in exchange for a new lease to drill into state waters from an existing platform, might not be legally enforceable, because authority for the federal leases would rest with U.S. Mineral Management Service, regardless of the terms of the PXP-EDC agreement.

The staff also said that a new state lease could encourage oil industry efforts to gain more leases for drilling in federal waters, by breaking a 40-year precedent of not allowing new drilling in waters controlled by California, up to three miles from shore.

“Further, the new agreement does not address the Commission’s concern over the increased risk of oil spills created by oil and gas development at Tranquillon Ridge,” the report said. “This risk and its consequences have been demonstrated in the past off Santa Barbara and are now affirmed by the huge spill in the Gulf of Mexico following the explosion and loss of the Deepwater Horizon platform.”

The Burton correction goes national: Check out NPR’s “Wait Wait… Don’t Tell Me!”. Go to the 00:49 mark in the “Lightning Fill in the Blank” portion of the show to hear John Burton and his “Go bleep yourself” correction on Calbuzz as an answer in the national news quiz.

Also, Jason Linkins at Huffington Post took note in his Eat the Press column.

If that’s not enough, check out Craig Silverman’s “Regret the Error” column in Columbia Journalism Review, in which the whole back story is spelled out and the “correction” is analyzed in terms of who wanted (and got) what out of the deal.

Kaboom! And a Happy Earth Day to You, Too!

Friday, April 23rd, 2010

It may be a tad early to assess the political impacts of the explosion and sinking of an BP oil rig off the coast of Louisiana, but it seems safe to say that the horrific images of the disaster won’t speed up the cause of the controversial Tranquillon Ridge project in California.

The strange bedfellow alliance among and between Governor Arnold, several Santa Barbara environmental groups and the Houston-based oil company PXP recently re-launched their effort to resurrect the project, after it was turned down by the State Lands Commission and the Legislature last year.

Now, the metastasizing oil spill*** in the Gulf of Mexico, and the apparent loss of the lives of at least 11 oil workers that followed a blow-out on a rig on Tuesday night – Earth Day – provide a sudden and grim reminder of the high stakes of offshore drilling.

The T-Ridge plan calls for the lands commission to award PXP a lease to drill in state waters, the first since the 1969 Santa Barbara spill, from an existing platform in federal waters. Environmentalists on both sides of the internecine warfare over the issue insist that their position represents the  best way to prevent more spills like that now engulfing the Gulf.

In the move that split old alliances and fractured California’s environmental community, local groups in Santa Barbara have pushed the T-Ridge plan as a way to trade more drilling in the short run for less in the long run, exchanging their political support for a PXP lease to slant drill into state waters for the oil company’s legal promise – which they insist is ironclad – to cease all drilling from four federal platforms in the area within 14 years.

Amid all the political, legal and financial wrangling over the issue for the past two years, it’s hard to imagine a more powerful argument against  drilling than that presented by pictures of firefighters vainly battling the deadly and violent blaze that sunk the oil rig. It’s worth noting that the T-Ridge platform is located just over three miles from shore, far closer to land than the  Deepwater Horizon rig that sank about 50  miles off the coast of Louisiana.

Many backers of the governor’s proposal have argued that oil drilling operations have undergone huge technological advancements in the past 40 years, making unlikely a massive spill like that poisoned the Santa Barbara Channel in 1969.

Among those who have embraced the technology-makes-it-safe argument are Republican wannabe governor Steve Poizner and his front-running rival, Meg Whitman.

“When I started this process, I was against offshore oil drilling,” Whitman told reporters in Santa Barbara last year, “and then I began to understand deeply the new technology that is available to extract oil from existing wells.”

For the record, Jerry Brown does not support the T-Ridge proposal. As Attorney General, and the lawyer for the State Lands Commission, Brown’s staff recommended that the commission reject PXP’s project last year. As a candidate, Brown “does not believe off-shore drilling is the answer to our problems,” said campaign flack Sterling Clifford.

*Update: Early fears of huge spill may be unfounded.

**Update II (4/24): Now they’ve found an underwater leak a senior Coast Guard official describes as “a game changer.”

***Update III (4/27): Spill now 40 miles X 50 miles - so much for “unfounded” fears.

****Update IV (4/29): Send in the Marines.

FYI: The Associated Press reports “Since 2001, there have been 69 offshore deaths, 1,349 injuries and 858 fires and explosions in the gulf, according to the Minerals Management Service. ”

Weed whacker alert: In order to jump start the T-Ridge proposal, PXP needs to file a new application for a hearing before the lands commission and, so far, has not done so, SLC executive officer Paul Thayer told Calbuzz.

Thayer said that the commission staff, analyzed a revised version of the agreement between PXP and the Environmental Defense Center several months ago. The commission rejected the original proposal last year and still has problems with it, despite some improvements, he said.

The “beneficial aspect” of the new agreement it reviewed is that it strengthens the state’s ability to intervene legally if PXP does not honor its terms, he said. But the final authority over end dates for drilling from facilities in federal waters still rests with the Department of Interior’s Minerals Management Service, not the state: “Ultimately, MMS controls what’s going on out there.”

Thayer also cited the “precedental value” of the existing 41-year old prohibition against any new drilling leases in state waters, which has been in force since the 1969 Santa Barbara spill.

“California’s congressional delegation has made use of that,” in fighting against expansion of drilling in federal waters off the coast of California, he said.

P.S. Kudos to KQED’s John Myers for getting Abel Maldonado on the record about his stance on T-Ridge this week, in advance of his confirmation vote for lieutenant governor, a post from which he gets a deciding vote on the project on the lands commission.

Live from the California Nurses Association: Queen Meg!

The latest in guerrilla theater from the CNA, Queen Meg, escorts, a horse-drawn carriage and a proclamation that reads:
“In honor of her $150 million campaign treasury, the people of California do hereby crown Meg Whitman as Queen Meg of California.  Her husband Griffith Harsh IV is crowned Prince Griffith of Palo Alto, and the Whitman-Harsh royal motto shall be ‘Healthcare for the nobility, Education for the few, Prisons for all.’”

Excloo: Secret Agreement on T-Ridge Revealed

Monday, January 18th, 2010

platformnewA secret agreement between PXP oil company and a Santa Barbara environmental group sheds new light on aspects of the controversial Tranquillon Ridge offshore oil plan that are central to Governor Schwarzenegger’s latest bid to win approval for the project.

A hard copy (now available in pdf) of the previously undisclosed agreement provided to Calbuzz offers an inside look at the terms of the pact that gained the Houston-based PXP the key political support of the influential Environmental Defense Center, which has been prominent in the decades-long fight against offshore drilling in California.

The group’s endorsement of PXP’s application for a lease to slant drill into state waters, from an  existing platform under federal jurisdiction, more than three miles offshore, has bitterly divided California’s environmental community.

Financially at stake are billions of dollars in new revenue for PXP, plus as much as several billion more for the state treasury from royalties on the lease, which the governor insists are needed to address the state’s budget mess.

Despite Schwarzenegger’s aggressive push for the lease last year, the State Lands Commission rejected PXP’s lease application. After a raucous battle, the Assembly later defeated a bill to overturn that decision. Now, Schwarzenegger is pushing for the lands commission to rehear the lease deal, which is framed by the confidential PXP-EDC agreement.

As a political matter, the environmental issue boils down to this: the EDC and its allies argue that trade-offs made by PXP in the confidential agreement in exchange for environmental support ultimately will end some offshore oil drilling; environmental foes of the deal say it is absurd to attempt to end offshore drilling by allowing more of it, and say the deal inevitably will advance oil industry efforts to expand the practice.

PXP and EDC representatives told Calbuzz they have recently amended their original agreement, reached in April 2008, in order to beat back major arguments used to defeat the deal twice before. A spokesman for PXP and an attorney for EDC both said the revised agreement would be made public if PXP gets a new hearing.

krop_lg

Linda Krop

Our own review of the original agreement, which was obtained from sources who requested anonymity because of concerns about retribution, meanwhile provides the first definitive look at a host of issues that, for nearly two years, have been the focus of political gossip, rumor, speculation, charges and counter-charges.

Today we’re publishing a post of unusual length and detail because we think the PXP matter, along with the AB32 climate change controversy, represent the most important environmental issues facing California.

Our research for this piece includes the previously secret document, a face-to-face about its terms with Linda Krop, chief counsel for the Environmental Defense Center, who negotiated it, and an email exchange with Scott Winters, PXP spokesman and vice president of corporate communications. Here is a look at key issues, with a major Weed Whacker Alert:

I-Secrecy: “Negotiated behind closed doors” secrecy

PXP and EDC have declined to make their agreement public, saying it contains proprietary information that could aid the company’s competitors. Their insistence on confidentiality was a major factor in the twin defeats of the deal last year.

If granted, the requested lease would be the first by the state since Union Oil’s disastrous 1969 Santa Barbara oil spill, and opponents of the deal successfully argued that it is outrageous even to consider such a change without a full public airing of its conditions.

“The fate of public lands cannot be decided in contracts negotiated behind closed doors,” Controller John Chiang, a lands commission member, said in explaining his vote against it last year.

Our review of the document showed there is no formal confidentiality clause to legally prevent its release to the public. Linda Krop, lead attorney for EDC, who negotiated the agreement, told us in an interview:

PXP asked if the agreement could be confidential because it explains how they do business with their partners and such, and they didn’t want the rest of the industry to see that. We said, ‘sure, that’s not a problem’…That was just the agreement going in (to negotiations).

PXP and EDC said they recently incorporated amendments to the agreement to address criticisms raised at the initial State Lands Commission hearing by strengthening written assurances that the promised benefits of the agreement will materialize.

PXP spokesman Winters said, “We recognize the concern the confidential nature of the agreement generated” and pledged that the revised agreement will be made public — if and when the lands commission schedules a new T-Ridge hearing.

Krop said she was surprised by the vociferousness of the criticism about the lack of transparency, claiming it is not unusual for environmental groups to keep private the legal agreements or settlements it makes with corporations applying for permits or leases before public agencies. Said Krop:

It caught us off guard. The reason we did not think that was an issue (was) because the project was going to be decided at public hearings before the county, the State Lands Commission and the Coastal Commission…Had we known it was going to be an issue, we would have talked about it up front, but it caught us by surprise…If we get a second chance, it will be a public agreement, and we will never have a private agreement again.

II-Money: Who gets what

EDC legally repmoneyresents in the matter two other Santa Barbara non-profits, Citizens Planning Association (CPA) and Get Oil Out! (GOO). Amid the bitter debate within California’s environmental community, one of the charges leveled by T-Ridge foes is the suggestion that the non-profit EDC benefits financially from the agreement, and from its public support of PXP.

On this point, Section 1.6 of the agreement (“Reimbursement of Expenses of Environmental Parties”) states that:

Upon all Parties’ execution of this Agreement, PXP shall pay $50,000, and upon the State Lands Commission’ approval and PXP’s written acceptance of all the leases necessary for the Tranquillon Ridge Project, PXP shall pay an additional $50,000, for a total of $100,000, to the Environmental Defense Center, as reasonable compensation for work performed by EDC on behalf of GOO! and CPA pertaining to the environmental and permitting review for the Tranquillon Ridge Project, and the negotiations leading up to and implementation of this Agreement.

The oil company also made other financial commitments, in addition to the terms about oil drilling, which are discussed below.

These include ceding for conservation nearly 4,000 acres of onshore lands in Santa Barbara County now used for production and processing of oil yielded by offshore operations. These land transactions, per the agreement, are to be managed primarily through the non-profit Trust for Public Land. The agreement does not state the value of the land.

The company further agreed to a pay a maximum of $298,507, at a rate of $20 per ton, to offset any new greenhouse gas commissions from the T-Ridge project, to the Santa Barbara County Air Pollution Control District. PXP also promised to pay the air quality district $1.5 million, over 14 years, to “administer a transit bus technology program” within the county to help reduce greenhouse emissions.

PXP’s potential royalty payments to the state are estimated at several billion dollars, according to Winters, who said the county of Santa Barbara could receive several hundred million in property tax revenue on oil produced from new T-Ridge operations.

In exchange for these commitments, among others, EDC and its clients made promises of public support for PXP’s efforts to obtain the lease and all necessary approvals, saying they would:

…in a timely manner communicate…support for the granting of all approvals required for the Tranquillon Ridge Project pursuant to the agreement. These communications shall be in writing (with copies contemporaneously delivered to PXP), and include oral testimony at public hearings of Santa Barbara County, the State Lands Commission, and California Coastal Commission…

In the event PXP requests the Environmental Parties to communicate their support…to any other governmental agencies with entitlement jurisdiction, EDC shall do so on behalf of (CPA and GOO!), in which event PXP shall pay EDC’s reasonable fees, together with reimbursement for any of EDC’s reasonable and actual out-of-pocket costs incurred.

Krop termed “ridiculous” the notion that this contractual arrangement could support the perception that EDC was due a $50,000 bonus payment once PXP secured approval from the lands commission. Noting that “every settlement has a reimbursement,” she stated that PXP has now paid the full $100,000 to EDC, which she said actually “shortchanged” the many hours she and her staff devoted to the project. Krop:

For environmentalists, it’s never been about the money, it really has been about ending current oil production and stopping future oil production…We did get paid the full $100,000…because we put twice that (amount of time) by the time we were done…The reason we advocated for this is because we want the end dates (for offshore oil drilling). We want the benefits of the agreement.

As for PXP’s profit, Winters claimed “the state stands to gain as much, or more in all price scenarios, than PXP.” He characterized speculative reports that the company stands to gain upwards of $20 billion from the deal “not even remotely realistic” but declined to say how much increased income the project could mean for PXP.

III-An End to Drilling: How, When, Whether

santa-barbara-view-from-riviera-resize

As a policy matter, the most important issue raised by the PXP agreement is whether or not the negotiated “end dates” — when the company promises to stop drilling both at Tranquillon Ridge and from three other platforms located in coastal waters under federal jurisdiction — can be legally enforced.

(A bit of complicated, but unfortunately relevant, waaay in-the-weeds history:

Coastal waters up to three miles from shore are formally known as “California State Tidelands.

Since 1938, oil leases in them have been under the jurisdiction of the State Lands Commission. The three-member body includes the Lieutenant Governor, the state Controller and a representative of the governor’s Department of Finance.

Until the 1969 Santa Barbara oil spill, which galvanized the start of the global environmental movement, the state had granted 35 leases for tidelands. Since then it has granted none.

In 1994, former state legislator, and current state schools chief, Jack O’Connell of Santa Barbara, successfully passed the California Coastal Sanctuary Act, which allows new state leases only under a few conditions. Two of these include: a) areas where oil in state waters drains into federal waters and b) cases in which the lands commission determines it is “in the best interest of the state” to allow such a lease.

The U.S. government has authority over oil leases in Outer Continental Shelf waters beyond three miles from shore. Starting in 1981, there was a federal moratorium on new leases off the California coast, which expired in 2008.

Under an pre-existing federal lease, PXP now operates Platform Irene, just outside the three-mile limit. That operation sucks oil out of the sea at a point near an underwater geological formation known as Tranquillon Ridge, where oil drains from state into federal waters).

Because PXP’s state lease application apparently meets condition a), the key question for the lands commission, in deciding whether to grant a state lease at T-Ridge, is whether the project meets condition b), by being “in the best interest of the state.”

Schwarzenegger says it does, because the state needs the money; project opponents say it does not, because it would set a dangerous political and environmental precedent. The State Lands Commission backed the latter view last year, when it turned down the project, 2-to-1.

PXP first applied for a state lease in 2004; during the EIR process, EDC opposed that effort. At the suggestion of then-Lieutenant Governor John Garamendi, according to attorney Krop, the company came to EDC in 2007 seeking a compromise.

Within a few months, Krop said, they had offered to include in a possible deal three other platform operations now under federal lease, in an area known as the Pt. Arguello Project, south of T-Ridge (if you’re still with us, remember this name). The result of those negotiations was the confidential pact signed in April 2008, under which EDC now supports PXP’s application to the lands commission.

IV- What are “end dates”?

The no-longer confidential agreement calls for PXP, if granted the state lease, to end operations in both federal and state waters near Tranquillon Ridge by the end of 2022. The company also promises to shut down its onshore production facilities connected to those operations, ceding the land for public use. PXP also agrees to remove permanently, not just decommission, the infrastructure known as Platform Irene.

Recall the aforementioned Pt. Arguello Project. PXP operates it through a majority partnership it has with other oil companies.

The EDC pact says PXP will ensure the end of drilling operations from three platforms — known as Harvest, Hermosa and Hidalgo — in that federal project area, within nine years of the company receiving the T-Ridge state lease. The PXP-EDC agreement also calls for turnover for public use of onshore lands where Pt. Arguello-related production facilities now operate.

Caveat: the agreement states that unnamed “third parties are responsible for the abandonment of the three Pt. Arguello platforms.” While PXP promises not to oppose any effort to remove the actual platforms, it does not promise or guarantee they would be removed.

Will it ever end?

The so-called “end dates” for drilling are described in the agreement, variously, as “irrevocable and non-modifiable,” and “pre-determined and absolute.”

As a legal and political matter, however, the key question in the T-Ridge debate is whether these dates would be enforceable. Both the lands commission staff and the attorney general’s office reported to commissioners last year that they were not, a crucial factor in the defeat of the lease application.

Opponents of the deal say there are simply too many future unknowns and unknowables -– market conditions, the price and availability of oil and who controls the state and federal governments, for example — to assure that the promised end dates would be honored.

One key factor here is that federal leases -– including those for platforms Harvest, Hermosa and Hidalgo — are under authority of the Department of Interior’s Minerals Management Service (MMS), which ensures that federal leases generate income for the U.S. government.

In explaining his opposition to a state lease for PXP, Controller Chiang wrote this in a post for the California Progress Report:

My concerns also include the enforceability of ending the Tranquillon Ridge oil drilling operations in 2022 and the Point Arguello operations in 2017. The support of environmentalists for this project would not exist without dates certain on which drilling would stop, but neither the proposed State Lands Commission lease nor the PXP agreement can provide certainty about these end dates.

The federal Minerals Management Service receives royalties from the oil production in federal waters and is compelled by law to encourage drilling until it is no longer economically viable.

The state cannot interfere with the contracts between PXP and MMS. Because the MMS will not agree to the proposed end dates, and because we are continuing to experience severe volatility in the energy market, there is likelihood that market forces in 2022 would dictate whether or not the federal government would continue seeking revenue from this project.

V. The ultimate leverage

leverageBut Krop told Calbuzz the Controller is “not correct” in his statements about the position of the federal government.

She said she met in Washington last fall with federal officials. At that time, MMS officials told her, she said, “we want to make this happen” She added that if and when state lands commissioners rehear PXP’s application, she will present evidence the federal issue should be “off the table.”

“When we met with MMS folks back in D.C. in September, they said, ‘that’s a viable option,’” Krop told us.

Winters said the the scenarios about difficulty enforcing end dates are not realistic, because the onshore facilities to support future drilling at the sites would be removed. He also said the new agreement would make California’ attorney general a party to the pact, to give specific authority over the deal to the state. He also told Calbuzz that in the amended agreement:

…a new provision has been added that requires PXP to forfeit 100% of any profits the project generates if it operates beyond 14 years for any reason.  In addition, the agreement includes a clause that requires PXP to waive its rights to apply for any extension at the end of the life of the project.

As for the other enforceability issues, Krop strenuously argued that the original agreement she negotiated was ironclad:

Under our agreement, those (onshore) facilities cannot be used for production of oil and gas after the end dates…

By everybody’s prediction there’s going to be hardly any oil and gas left in these fields. If (MMS) were to lease them, all the new platforms, pipelines, processing facilities would have to be built. It’s just not going to happen…

You’ve got a .0000001 percent chance, (of offshore drilling taking place on the sites after the end dates). Right now you have a 100 percent chance they’re going to keep producing. That’s what’s frustrating to me, is that people in Sacramento don’t get that…We’re not supporting a new project, we’re supporting a project that is going to shut down production.

In this exchange during the interview, however, Krop acknowledged that if unforeseen circumstances led to leasing arrangements and drilling past the end dates, enforcement of the EDC-PXP essentially would be left to her group, by filing a lawsuit:

Calbuzz: So what you’re saying is, the enforceability is ultimately the legal leverage that you would have as one of the parties to this agreement.
Krop: Right.
Calbuzz: In other words, if they violated this agreement, you would have to go to court to sue to enforce it.
Krop: Right. We would go to court, (Trust for Public Lands) would go to court…

As for the political argument by opponents that granting PXP a state lease would send a powerful political message that California’s long-held consensus opposing offshore drilling is crumbling, the EDC attorney claimed that any such perception “is based on people telling untruths.”

The politics is the truth. If everyone would stick to the facts, I’m saying, if everyone would quit twisting the truth, the perception would be the truth. The truth is, the drilling’s happening and we’re shutting it down.

VI. And Now, a Word from Your Sponsors

wagging-finger

We’ve done our best to present the facts of this as fairly as possible, but figuring out who’s right among environmentalists on this one requires an ability to foresee and forecast the future — about the oil market and shifts in government leadership, among other things — which we admit we lack.

Amid the passion and strained relationships within the environmental community,  it seems to us that some people on both sides of this complicated issue share the same policy goal — to protect California’s precious coastal environment. It’s sad to watch them attack each other’s motives.

That said, as innovative, perhaps visionary, as the EDC proposal may be as an environmental policy matter, the group’s appreciation for hardball politics in Sacramento and Washington seems to us at times naive. Moreover, four decades of principled opposition to new offshore oil drilling is precedent we’d be loathe to see California forfeit on a risky bet that oil companies would willingly stop drilling for oil.