Chevron Loses Appeal to Ship Oil by Tanker

In a victory for environmentalists, a state board on Wednesday denied an appeal by Chevron Corp. to ship heavy crude oil by tanker along the Ventura County coast until a pipeline can be constructed over the next four years.

The ruling by the California Coastal Commission upheld a decision by Santa Barbara County supervisors that the only environmentally safe method to move oil from Santa Barbara to Los Angeles is by underground pipeline.

Chevron officials said their only remaining recourse may be to sue the county or the Coastal Commission. The company cannot profitably use existing pipelines to move oil from Santa Barbara County to Los Angeles, officials said.

“This pipeline scheme is just not an option for us,” said Richard J. Harris, assistant general counsel.

Chevron and its 17 partners in the Point Arguello oil field project asked for a ruling that would allow for further discussion of whether the companies would be allowed to use tankers to ship up to 100,000 barrels a day through the Santa Barbara Channel within miles of the Channel Islands National Park for the next four years. Once linked together, existing pipelines could handle only about 40,000 barrels per day, officials said.

The tankers would travel in established shipping lanes, which pass between the coast and the environmentally sensitive Channel Islands.

After four years, Chevron officials said, the new pipeline would be complete, and they would ship all oil underground. Under the current permit issued by Santa Barbara County, the oil companies must move their oil by pipeline. To ship any oil by tanker, they must apply for a new county permit.

Santa Barbara County officials said Wednesday that they would welcome a permit application to ship by tanker any oil that is beyond the capacity of the existing pipelines while a new pipeline is being built over the next four years.

But commissioners and community activists said before a meeting in Montecito of about 500 people that they did not trust Chevron’s commitment.

“They promised us to use a pipeline in 1983,” said Thomas W. Gwyn, chairman of the 12-member commission. “I am not convinced this is a good-faith offer.”

Shipping oil by pipeline is far safer than shipping by tanker, commission staff and oil industry critics said.

“If we choose hazardous and pollution-intensive tankering rather than an environmentally safer alternative simply because it is cheaper for Chevron, we will set a precedent that will call for further environmental sacrifices along the same lines,” said Henry Feniger, a spokesman for Get Oil Out.

Wednesday’s 8-3 ruling with one abstention was the latest setback for Chevron and its partners in their efforts to begin producing oil from the $2.5-billion Point Arguello project off the coast of Santa Barbara County.

The project, which includes three offshore platforms and a processing center at Gaviota, was approved by Santa Barbara County supervisors with the condition that Chevron transport the oil by pipeline if pipelines are available.

At issue Wednesday was whether it is economically and environmentally feasible to ship the crude oil by pipeline. Coastal Commission officials contend that the oil, once thinned with a lighter grade, can be economically moved through existing pipelines.

Pipelines have oil spills, but they are less frequent and usually involve a much smaller quantity than tanker spills, officials said.

But Chevron representatives argued, and three commission members agreed, that the question should be explored further before being denied. Chevron and its partners sought a finding by the commission that would have allowed them to reopen the debate at a later commission meeting.

“I don’t believe all the impacts have been adequately addressed,” said Commissioner Dorill B. Wright, Port Hueneme mayor.

“Our proposal limits tankering to four years, and that’s a better deal than tankering over and above (the pipeline capacity) for the entire life of the project,” Harris said.

Point Arguello project manager C.L. (Lew) Blackwell Jr. said the partners would announce in the next week whether they intend to sue.

“Our next step may be to seek judicial remedy,” he said.