Chevron Denied Permission for Emergency Tanker Shipping : Environment: A spokesman for the oil company says Santa Barbara County officials who made the decision ‘need a refresher class in Economics 101.’

In a blow to Chevron Corp.’s Point Arguello operations, Santa Barbara County officials on Tuesday denied the oil company’s emergency tanker shipping application, forcing the company to scramble to find storage space or cut production from its vast offshore oil fields.

Environmentalists in Ventura County and elsewhere in Southern California hailed the decision, saying that, at least temporarily, the ecologically sensitive Santa Barbara Channel will be spared the risk of an oil spill from a tanker accident.

“We believe the decision that the county reached was correct and we are cautiously optimistic that, at least for the short term, the ecologically fragile Santa Barbara Channel will be protected from tankering,” said Linda Krop, an attorney with the Santa Barbara-based Environmental Defense Center, a public interest law firm representing several environmental organizations.

Echoing Krop was Lisa Weil, policy director for the Santa Monica-based American Oceans Campaign.

“We feel that Chevron’s request is bogus,” Weil said. “This is nothing but a desperate move to play for time and continue tankering.”

Tanker shipments began last August after Chevron obtained a three-year permit from the California Coastal Commission, allowing the company to ship oil only to Los Angeles. But the company failed to meet a key condition of the permit: that it have an agreement by Feb. 1 for an overland pipeline to carry the oil when the permit expired in 1996.

Shortly before the Feb. 1 deadline, Chevron applied for emergency permission to continue shipping by tanker up to 40,000 barrels of oil a day to Los Angeles refineries. The company said an emergency permit was warranted because an oil pipeline it uses to get oil to Los Angeles suffered damage during the Jan. 17 earthquake and was shut down.

In the application, the company contended that because of damage to Four Corners Pipeline No. 1, a crude-oil supply emergency had arisen--a claim rejected by Santa Barbara County officials.

“We’ve denied the emergency tankering request because Chevron has not demonstrated that a crude-oil supply emergency actually existed,” John Patton, director of the county’s resource management division, said in a statement. “We have analyzed the facts, and it’s clear to us that for February, refineries in L.A. have adequate crude supplies.”

But according to G. Michael Marcy, a Chevron spokesman, Tuesday’s decision by county officials was ill-researched and ill-conceived. He also said Chevron has no other economically feasible way to move the oil. Other Four Corners pipelines to Los Angeles are overcrowded, and sending the crude oil in other pipelines to other locations was not economically viable, given the depressed oil market.

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“Santa Barbara County officials need a refresher class in Economics 101,” Marcy said. “I think their decision was a product of a cultural bias against our company that we have had to deal with regardless of the concessions, mitigations and environmental protections we have proposed throughout the history of this project. This is nothing but an arbitrary decision.”

Currently, Chevron and its Point Arguello Project corporate partners are producing about 80,000 barrels of crude oil a day from their offshore fields northwest of Santa Barbara--fields that contain an estimated 300 million to 600 million barrels of oil. If necessary, the companies can store about 800,000 barrels of crude. If that capacity is reached, Marcy said, the company will reduce oil production at the facility.

In a separate defeat for Chevron on Tuesday, State Lands Commission officials said that even if Santa Barbara County had approved the emergency permit, the oil company would not have been able to ship oil from the state-owned Gaviota Interim Marine Terminal because it failed to meet the Feb. 1 deadline in the Coastal Commission tankering permit issued last year.

Marcy offered several explanations for the company’s failure to keep the permit it had fought for a decade to obtain.

During much of 1993, the company was working on such a deal with Huntington Beach-based Cajon Pipeline Co. but broke off negotiations in December after failing to agree on terms or a route for the line, which is slated to run from the Barstow area to Los Angeles.

Chevron instead has chosen to pursue development of the Pacific Pipeline, an oil conduit proposed to run directly south from Kern County to company refineries in the Los Angeles area.

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Marcy said Chevron is negotiating with Pacific Pipeline Co. officials on a deal. But the pipeline company has not yet secured regulatory and construction permits. If it does--possibly by this summer--Chevron will reapply for permits to resume tankering, Marcy said.

The oil company’s 17th and last load of crude oil, an estimated 250,000 barrels, was shipped out of Gaviota Jan. 31 aboard the Chevron tanker Oregon, Marcy said.