Chevron Tanker Bid Approved : Petroleum: Company gets the go-ahead for a controversial plan to transport oil by tanker in the waters off Santa Barbara.

One of California’s longest and most bitter environmental battles concluded Wednesday when the California Coastal Commission approved Chevron Corp.’s controversial plan to transport oil by tankers from its giant Point Arguello offshore oil project near Santa Barbara.

The decision, which caps a decade-long battle pitting Chevron against local officials and environmentalists, will allow Chevron to increase production from the $2.5-billion project to 85,000 barrels per day from about 50,000 barrels now.

But the approval, which was granted by a 7-4 vote during a crowded public hearing in Santa Monica, carries several restrictions.

Chevron will have to ship at least 40,000 barrels a day from the Arguello project by pipeline and then would be allowed to ship as much as 50,000 barrels a day on double-hull, double-bottom tankers. Oil from the project is destined mostly for Los Angeles-area refineries and for northern California.

Chevron now ships Point Arguello oil to Los Angeles in a bizarre, north-south trek because it was prevented by county officials from shipping in state waters. The oil is transported from Point Arguello, about 20 miles offshore, by pipe to a processing facility at Gaviota. The oil then travels by pipeline about 300 miles north to Martinez in the San Francisco Bay Area, and then is shipped back south by tanker through international waters to Los Angeles.

Chevron will be allowed to begin shipping oil from the project by tanker within the next two months after final permits are granted.

“We are pleased that the majority of the commission agreed with (the plan),” Chevron spokesman Michael Marcy said.

The decision ends a long-running dispute between Chevron and Santa Barbara County over the project, which is located just offshore of the wealthy resort city of Santa Barbara.

Opponents, citing the recent wreck of the Braer tanker in the Shetland Islands off Scotland, expressed concern about the threat of a spill off the California coast.

Santa Barbara officials are opposed to the use of tankers and want all the oil carried in pipelines.

“The recent tanker spill strengthened our conviction,” Santa Barbara Mayor Sheila Lodge told the hearing.

Other opponents contended that pipelines aren’t safe either and that Chevron should transport its oil by truck to Los Angeles.

“All the good intentions in the world won’t prevent an unfortunate accident” said Jane Yokoyama, a commission member.

Under the decision, Chevron will be allowed to ship oil from the project by tanker only until Jan. 1, 1996. In the meantime, the company hopes a new pipeline will be built to carry the oil to Los Angeles-area refineries.

Wednesday’s approval requires Chevron to meet several milestones toward the construction of a pipeline. If those milestones are missed, Chevron would either have to reduce by half the amount of oil carried by tankers or cease tankering altogether.

Chevron is the lead partner in the project, and other partners include Texaco and Phillips Petroleum Co. For the approval to take effect, all of the partners will have to agree on the conditions laid down by the commission.

Chevron executives who attended the hearings said the company will have to discuss the new permit with its partners before it can officially drop its pending lawsuit and accept the permit. But most observers said Chevron and its partners are likely to accept the permit.

“I’m not in a position to say we accept or reject it,” Chevron environmental counsel Richard Harris told Bloomberg Business News. “But I think what (the commission) decided is a permit is better than a lawsuit.”

Company officials said a circular and costly method of transporting the oil prevented increased production at Point Arguello by Chevron and its 10 partners.

Point Arguello, has an estimated 300 million to 500 million barrels of recoverable oil, the largest domestic oil discovery since Alaska’s Prudhoe Bay in 1968. Peak production is about 100,000 barrels a day.