Judge halts oil, natural gas exploration off coast

The Associated Press
Saturday June 23, 2001

SAN FRANCISCO — A federal judge halted oil and natural gas exploration off central California’s coast Friday, saying the area can’t be drilled or explored until the federal government studies the environmental impacts and the California Coastal Commission approves of the plan. 

The decision by U.S. District Court Judge Claudia Wilken is a major blow to petroleum companies that have left their leases dormant while natural gas and oil prices have neared all-time highs. It comes as California struggles through an energy crisis. 

Environmentalists hailed the decision, which affects the proposed developments off San Luis Obispo, Santa Barbara and Ventura counties. 

“We think it’s a bad idea to have additional oil and gas drilling off the coast,” said Drew Caputo, an attorney with the Natural Resources Defense Council. 

For now, the decision blocks any attempt to build the first new oil platforms off California’s coast since 1994. No drilling to explore for oil deposits has been conducted since 1989. 

At issue is an amount of oil that could be large enough to run California’s refineries for two years and fuel five months worth of the state’s natural gas demands.  

Those estimates are about one-fifth the amount of energy within Alaska’s Arctic National Wildlife Refuge, where the Bush administration wants to drill. 

Sarah Christie, the Coastal Commission’s legislative coordinator said she hoped that Friday’s decision would not prompt louder calls to drill in the Arctic refuge. 

“It’s certainly not the intent ... to push offshore oil exploration into a different but equally sensitive and magnificent and valuable place on the map,” she said. 

California sued to block the exploration days after President Clinton’s Interior Secretary Bruce Babbitt extended the leases for ten years in 1999.  

The lawsuit contended that Babbitt’s decision was subject to review by the state under a federal law giving California authority to determine whether offshore drilling in federal waters is consistent with the state’s coastal protection plans. 

Babbitt’s order allowed the companies to begin paperwork on their plans, but banned all physical work on the leases, including drilling wells, until the U.S. Minerals Management Service completed an environmental impact study on new drilling. 

Under the Coastal Zone Management Act, amended in 1990, Congress gave states a say in any activity affecting coastal communities. 

Mary Nichols, resources secretary to Gov. Gray Davis, said she was gratified by the decision. 

“We were really not happy about having to file the lawsuit, but we believed – the governor believed – we were right on the law and it was important to defend California’s right to protect our coast,” Nichols said. 

Davis said he will continue working to make sure California’s coastline remains protected. 

“Nineteen months ago I said that when it comes to offshore oil leases, California is entitled to be the engine, not the caboose on the train,” Davis said in a statement.  

“Should this decision be appealed, I will vigorously pursue all legal remedies to ensure that actions taken by federal agencies concerning leases for oil and gas production along the California coast fully comply with the law.” 

The oil companies have paid $1.25 billion for the 40 leases, each covering about a nine square-mile expanse of ocean. The leases were issued between 1968 and 1984. Four of them expired in 1999. 

Oil exploration off California’s coast has been an explosive issue since 1969, when a massive oil spill soiled the Santa Barbara coast.  

Offshore rigs account for roughly 20 percent of the state’s petroleum production, and offshore gas could prove to be a key resource as California seeks to solve its energy crisis. 

The oil companies affected by Friday’s decision include AERA Energy LLC of Bakersfield, Conoco Inc. and Nuevo Energy Co. of Houston; Samedan Oil Corp of Santa Barbara; and Poseidon Petroleum LLC, which could not be located. Calls to the other companies for comment were not immediately returned. The Western States Petroleum Association declined comment. 

“I don’t know what the implications are at this point,” said the companies’ attorney, Steven Rosenbaum. He said he had not seen Wilken’s ruling and declined further comment. 

“This is good news, Californians prize their coast and additional oil development has no place here,” said Bruce Hamilton, national conservation director for the Sierra Club.  

“It’s good to know those promoting it have been set back and eventually we need permanent protection.” 

Wilken, in a highly technical ruling, said that the federal government in 1999 illegally extended the companies’ 10-year leases. The extensions are called “suspensions” in legal jargon. 

She said the government “must provide the state of California with a determination that its grant of the lease suspensions at issue here is consistent with California’s coastal management program.” 

Wilken ordered all leases terminated until the federal Minerals Management Service complies with her order.