He Will Miss Unocal

The pending departure of Unocal Corp., a 104-year native of the local and state oil community, is a sad example of a trend that is threatening the California oil industry and the state economy.

At a recent economic forecast seminar in Ventura County, a UC Santa Barbara economist noted that the loss of manufacturing jobs is the most significant reason for the county’s continuing stagnant growth.

Unocal was born in 1890 in Santa Paula and was one of the many oil manufacturers that, through more than a century of tax revenues and lucrative manufacturing jobs, helped California achieve its powerful economic base. As we all know, that base has eroded in recent years due to a recession.

But it is more than a temporary economic downturn that has oil companies such as Unocal looking to sell its state operations. In fact, oil manufacturers trying to do business in California are finding fewer opportunities due to unfriendly or cavalier business conditions imposed by government.

For example, at a time when production along the outer continental shelf is near capacity, transportation options to the huge Los Angeles refinery market are being limited or written off, forcing companies to compete for dwindling pipeline space.

Recent negative transportation developments include the indefinite shutdown of a crucial Four Corners Pipeline Co. line running from Kern County to Los Angeles, which was damaged by the Jan. 17 earthquake; the rescinding of a permit for Chevron to tanker crude oil from Point Arguello to Los Angeles, and the permanent shutdown of a 13-year-old Exxon offshore storage and treatment facility that used tankers to transport oil from the Santa Barbara Channel to Los Angeles.

In each of these cases, government disinterest or regulation was unresponsive to the needs of the oil industry, causing area manufacturers to transport state oil to other refineries’ areas--especially Texas--at a significant loss of revenue.

It’s important to remember that Unocal isn’t leaving the state because oil is no longer a profitable type of business. Rather, it is choosing to invest in other states and countries where government believes in opening doors for the oil industry--not slamming them shut.

ED LYON

Ventura

Ed Lyon owns Gaviota Maintenance Services Inc. and is past president of the Coastal chapter of the American Petroleum Institute.