Chevron’s $25-Million Gamble : Circle at Sea Tracks Course of Dispute on Big Oil Platform

Longer than a 60-story building laid on its side, the massive $25-million skeleton of a deep-water oil platform is being towed in circles off the Southern California Coast, its destination and fate still uncertain.

The giant oil production rig has been kept at sea on a barge south of the Channel Islands since mid-August--at a cost of $200,000 a day--while Chevron Inc., tries once again to persuade the California Coastal Commission to allow the platform to be located in the Santa Barbara Channel.

When Chevron had the eight-legged erector set loaded on a barge and towed across the Pacific from Japan earlier this summer, the company was betting that it could overcome the commission’s objections to locating Platform Gail in 750 feet of water six miles north of the Channel Islands National Park and a half mile outside the Channel Islands National Marine Sanctuary.

That gamble has not paid off--at least not yet.

In July the commissioners--voting 6 to 6--turned thumbs down on Platform Gail after hearing opponents argue that an oil spill so close to Anacapa Island could threaten the only permanent nesting colony of the endangered California brown pelican. The opponents were concerned because the proposed site is adjacent to heavily used shipping lanes, increasing the risk of a collision that would cause a spill.

In mid-August, the barge carrying the platform arrived off the coast and was ordered into a holding pattern until the commission’s September meeting. At that meeting, to be held Tuesday in San Francisco, the commission will decide whether to change its position on Platform Gail.

To swing a favorable vote, Chevron officials say they are offering to further mitigate the environmental impact of the platform and add more navigational safety devices. “All we need is one (more) vote,” said Chevron’s Douglas Uchikura.

The controversy over Platform Gail once again pits environmentalists against big oil and the Reagan Administration’s effort to develop domestic oil reserves. The fight also offers a glimpse of the conflicting interests inside the Department of Interior, where pro-resource development forces appear to have overcome resistance from the National Park Service.

Proposed for a site nine miles off Port Hueneme, the drilling rig would tower 12 stories above the waves. The platform’s 25 wells would tap oil reserves estimated at 80 million barrels. If completed, Platform Gail would cost $150 million, including drilling rigs, facilities for the crews and some of the most sophisticated oil-cleanup equipment available.

Pipelines would connect Gail to existing platforms five miles to the northwest and to on-shore facilities at Carpinteria, further to the north.

Since the ideal site for Chevron to tap the oil reserves was inside the northbound shipping lane, the U.S. Coast Guard agreed to move the shipping lanes south a half mile. To enhance safety, the platform will be brightly painted and equipped with radar, fog horns, lights and other ship warning devices.

Environmental impact reports from the Interior Department’s Minerals Management Service--the lead agency regulating off-shore oil production--gave the project a green light. “Marine and coastal birds are not expected to experience any significantly adverse impacts during the life of the project,” the agency said.

Within the Interior Department, the National Park Service cautiously expressed “concern” about the “inherent risks . . . of a catastrophic oil spill” posed by Gail’s proximity to both the park and the marine sanctuary. Such a spill would jeopardize both the nesting pelicans and marine life, a park service memo warned.

Threat to Birds

The California brown pelicans’ existence was in jeopardy a decade ago because of the impact of pesticides on the pelicans’ reproductive process, experts said. Their number had been reduced to only one breeding pair on Anacapa Island by 1976. Since then, with the protection of the Park Service and the elimination of all uses of the pesticide DDT, the birds have re-established what is their only permanent colony. The population has risen to more than 1,000 breeding pairs.

The Park Service has also been worried that the platform would create an eyesore for Channel Island visitors. But despite all of its concerns, the service has not opposed the project. One highly placed national park official, who asked not want to be identified, said: “It is this Administration’s policy to develop oil . . . so we don’t have a position on this.”

Some environmentalists have taken a clear position against Platform Gail. Offshore drilling in the channel has been a sensitive issue since a massive oil leak erupted from a Union Oil platform in 1969, destroying marine life and washing crude oil onto 30 miles of beaches.

Ellen Sidenberg, a spokeswoman for Get Oil Out, a Santa Barbara-based environmental group, calls the project “a serious hazard to channel shipping and marine life.” The Sierra Club’s Bob Hattoy stated: “The potential for a spill or shipping lane accident and resulting damage far exceeds any potential oil production revenues. That is just a bad place to have a giant oil rig.”

Some Support Project

Not all environmentalists are opposed to the project, however. Russell Butcher, spokesman for the National Parks and Conservation Assn., said: “In our view, Chevron’s Platform Gail poses no threat to the Channel Islands National Park. . . . We are confident Chevron can do its oil development in a reasonable way.”

A report by the Coastal Commission’s staff points out that because of its impact on air quality, Platform Gail would be “inconsistent” with the state’s coastal policies. In addition, the platform would have an “unquestionable impact” on scenic and recreational resources at Anacapa, according to the staff report. Finally, the report stated, there are “serious doubts” that the sensitive resources off Anacapa could be protected after an oil spill.

Despite the warning of these and other “inconsistencies” with coastal regulations, the commission staff has recommended approval of the project. The report explains that while the “proposed project is not consistent with every Coastal Act policy, it may nevertheless be approved” because there are no alternate locations for the platform and commission failure to approve the project would adversely effect the public welfare--the national need for oil.

Chevron has agreed to “fully mitigate” the air pollution caused by development and operation of the platform through complex agreements whereby it will pay for “off-setting” reduction of air pollution in other parts of the Ventura County air basin. By eliminating 190 tons of air pollution a year elsewhere, the impact of Chevron’s project will have a zero impact on the total environment, staff officials explained.

Alert Through Radar

In addition the company is agreeing to add a sophisticated radar system that will automatically track up to 20 vessels at a time in the channel and warn if any are on a collision course with the platform. Chevron will also donate $150,000 to fund park service reconstruction of the Anacapa Island docking facilities and put up another $250,000 to cover any damage to nets sustained by fishermen using purse seines.

If the commission again rejects the recommendation of its staff and turns down the project, Chevron can appeal the decision to Secretary of Commerce Malcolm Baldridge, who has authority to override the commission and grant the permit as he has done three times before on other projects.

This is forcing some commission members to reconsider their positions, according to Chairman Michael Wornum, who originally opposed the development. He said: “If we turn them down and they (Chevron) appeal, there is no legal certainty that the mitigation we’re requiring will be followed. The secretary of commerce could change that. But if we approve the project with the mitigations, they (Chevron) are bound by that.”

Wornum considers Chevron a “good company” that has responsibly tried to make this project safe and environmentally acceptable. However, he is opposed to any platform so close to Anacapa Island. And he questions Chevron’s decision to construct the platform skeleton before the project is approved.

Even Chevron is having second thoughts about its policy of ordering platform construction while it is going through the two- or three-year process of obtaining the necessary federal and state permits.

If the commission rejects the proposal again this week and that decision is not overturned on appeal to Baldridge, the company could lose its investment because the platform was designed for just one location and could not be used anywhere else, said Uchikura, a Chevron staff attorney.

“We (ordered the platform) because we were under the impression that the government was anxious to expedite the development of resources,” said Uchikura. “But, from now on, we’re going to try to get the permits up front.”