Arco Offers Plan to Swap Oil Well Use


In a complex proposal to end one of the most heated California environmental debates of the last decade, the Atlantic Richfield Co. offered Friday to abandon plans to extract oil off the coast of Santa Barbara in exchange for the right to increase operations off the coast of Long Beach.

The oil giant told state and city officials in Long Beach that it is willing to spend at least $100 million to revive sagging wells at an existing platform, a plan the company said could yield 80 million barrels of oil and $650 million in government profits over the next two decades.

Although the proposal would mean 300 more wells off Ocean Boulevard, Arco officials said they would scarcely be noticed, tucked on a man-made island that already holds 300 wells disguised by palm trees and colored lights.

"A person standing at the edge of the Long Beach marina 200 yards away would not be able to see, hear or smell . . . any more than is in operation today," Benjamin Johnson, an Arco reservoir engineer, said during a presentation before the state Lands Commission.

If the state and city give the go-ahead, the oil company said, it will give its Santa Barbara off-shore leases to the state and drop a 1987 lawsuit over the right to drill at Coal Oil Point. Santa Barbara County and UC Santa Barbara, which is next to Coal Oil Point, have complained that the drilling would imperil the environment and marine research.

Russell Schmitt, director of the university's Coastal Research Center, said the campus endorses Arco's plan "with pleasure."

Long Beach officials said they are studying the environmental effects, but are initially in favor of the plan, which would inject water beneath the surface of declining oil wells in hopes of bringing the goo to the top. Arco said it is willing to invest at least $100 million in exploration, and absorb all losses if it fails.

While most of the new oil money would go to the state, a successful operation also could bring $5 million a year to Long Beach, which has been working feverishly to avoid a deficit.

Further discussion of the plan was delayed until Jan. 31 to give Exxon Oil Co., which owns 20% of the Long Beach terminal and is already opposed to the plan, a chance to study the 90-page proposal.

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