Oil Shipping Agreement Is in the Pipeline

A state agency proposed Tuesday to settle a decade-long environmental dispute over transporting oil from the Point Arguello project off the Santa Barbara County coastline by allowing three years of shipments by tanker while a pipeline is built.

But Santa Barbara County officials and area environmentalists--who have opposed repeated requests by Chevron Corp. and its partners in the project for permission to ship oil along the coast--criticized the announcement as premature, misleading and without necessary environmental safeguards.

The proposal by the state Resources Agency--a plan backed by Gov. Pete Wilson--would not require Chevron to commit to building a pipeline until 15 months after the tanker shipments had begun, said Linda Krop, an attorney with the Santa Barbara-based Environmental Defense Center.

In addition, she said, the agency announcement incorrectly implied that all the parties to the dispute had agreed in principle to the proposed settlement.

“It’s a sellout, and it does not provide any incentive for them to build a pipeline,” she said. “This is the result of tremendous pressure brought on the state and local governments by the oil industry.”

Andrew H. McLeod, assistant secretary of the resources agency, acknowledged that the parties did not agree with some aspects of the plan, but said it represented “the conclusion of the facilitating process” between all parties to the dispute.

At issue is whether to allow Chevron and its 17 partners in the $2.5-billion project to send heavy crude oil by tanker from Gaviota to Wilmington until a new pipeline is built.

The dispute for years immobilized the massive project. In the past year, Chevron has begun producing about 30,000 to 35,000 barrels a day, sending 20,000 barrels by pipeline to Northern California and 15,000 barrels by pipeline east through Kern County and then south to Los Angeles County refineries.

Santa Barbara County Supervisor Tom Rogers said Tuesday that the county will not oppose shipments by tanker as an interim measure if at least two conditions are met. The county wants Chevron to ship as much oil as possible through existing pipelines before it ships any by tanker. And county officials want Chevron to commit to the new pipeline before it begins tanker shipments.

Richard Harris, assistant general counsel for Chevron, said that the oil company agrees with the proposal overall and intends to pursue it.

But Chevron also has points of disagreement. For instance, the company does not want to have to use the existing pipelines at all. The oil now sent through Kern County has to be mixed with thinner oil for shipping, resulting in a product that is difficult to sell, Harris said.

Chevron also is opposed to the “milestones” in the plan, which set, among other things, the 15-month time frame by which Chevron must commit to building a new pipeline or discontinue tanker shipments.

The Resource Agency’s proposal came after three months of negotiations between the oil company, the county, environmentalists and the California Coastal Commission, with the Resources Agency staff acting as facilitators.

Santa Barbara County, fearing an increased risk of oil spills and greater air pollution from tanker shipments, denied Chevron’s proposal last year to ship oil by tanker until a pipeline could be built. Chevron appealed the decision to the Coastal Commission, which upheld the county’s position. Chevron subsequently sued the commission and the county.

Under a provision of the state proposal, the Coastal Commission could reclaim jurisdiction from the courts and make the final decision on tanker shipments. County officials, however, prefer that Chevron bring its request back to the Board of Supervisors, Rogers said.

The county has scheduled a public hearing on the issue Monday. The Coastal Commission will discuss the matter in a closed session April 8.