Venoco will, sooner or later, have to stop shipping its oil by barge and use a pipeline. When they do it is the sticky issue.

The city of Goleta and local environmentalists want it to happen sooner.

“For many years the county and community have been trying to get (Venoco) to transport their oil by pipeline,” said Linda Krop of the Environmental Defense Center. “The biggest concern is the risk of oil spills, and the barge is a single-hulled barge.”

Venoco is in no rush. Building a pipeline is expensive, they say, and the company wants to pay for it with 40 new wells drilled from Platform Holly.

“As you can imagine, since about 2004 most oil operators are rethinking their operations because the price of oil has gone up considerably after about a lull of nearly 20 years,” said Doug Anthony from the county department of energy in a presentation to the City Council on July 16.

Venoco, with its operations in and around the Ellwood area, has been planning to intensify its drilling and extraction of oil and gas while updating its transportation practices from the barge Jovalon to a 10-mile-long pipe that would transport the oil overland directly to the Las Flores Canyon processing facility from the Ellwood Onshore Facility, near Bacara Resort & Spa.

The oil company has already submitted a proposal to the State Lands Commission to drill the 40 new wells from existing well slots. These wells would be used to go beyond their current lease boundaries at the South Ellwood Oil Field beneath protected waters south of UCSB.

The new wells would increase oil production by four times, and double gas production. Money from the increased production, according to Venoco, would go towards financing the placement of the overland pipe.

The EOF, which is currently in an area zoned by the city for recreation, would have to be modified. Approvals for this modification would have to come from the city.

Environmental groups like Get Oil Out! and the Sierra Club are critical of the intensified oil production. They are wary of the potential hazards of increased production, especially given Platform Holly’s age, calling it “a new project tacked onto old facilities.”

Steve Greig, Venoco’s government relations manager, said the platform is subject to numerous inspections by various agencies more than once a month. And while the project’s EIR talks about the structural integrity of the platform, there is also a separate, technically specific document that also studies the platform’s performance with regards to things like chemicals and seismic activity.

Currently the oil from Holly is piped to the EOF, then piped east through Line 96 into the Ellwood Marine Terminal, where it is loaded onto a barge that heads north and west up to the Las Flores facility. The lease for the onshore portion of the marine terminal, which is owned by UCSB, expires in 2016, and the university has no plans to renew it, leaving Venoco with building the overland pipe from the EOF as its only option. With the expiration of the marine terminal onshore lease, the EMT would have to be decommissioned and abandoned, as would Line 96.

“It’s very outdated, definitely inconsistent with local and state policies,” Linda Krop, chief counsel for the Environmental Defense Center, said of Venoco’s practice of transporting oil by barge.

Venoco is the only company that barges its oil on the West Coast. Environmentalists have argued that the new pipeline should be installed sooner instead of as part of a deal that includes the 40 new wells.

“We’ve known the community has had the greatest amount of concern with the marine terminal,” Greig said, “but the marine terminal is operating within compliance.

“In our mind because of the cost (of the new pipeline) we felt it would be a reasonable compromise if we could get support for a lease boundary extension … we felt we had identified what was a win-win for both the community and Venoco.”

The cost of the new pipe would be “in the millions of dollars,” he said.

If the company gets the lease boundary extension approved, the barge would be gone by 2009.

The State Lands Commission is the lead agency for this project and has to give its approval before the of Santa Barbara County, the California Coastal Commission and the city of Goleta.
“Should they deny it, it’s dead in the water,” Anthony said. The EIR for the full-field oil production is expected between September and October.

Incidentally, another Venoco project awaiting approval from the lands commission is the lease renewal for the operation of the offshore portion of the Ellwood Marine Terminal through 2013. The final EIR on that project is expected to be released around September, and a commission hearing on the marine terminal is scheduled for Sept. 13.

Reviving piers

A separate, but related project the oil company is proposing is the recommissioning of piers 421-1 and 421-2, both of which extend into the water from the beach just south of Sandpiper Golf Course. The piers, which have been nonoperational since 1994, have since undergone repairs for a leak, and damage to 421-1’s outer caisson wall, which sheared off during the January 2004 winter storms.

Venoco believes it has a vested right to recommission the piers and has submitted applications to the lands commission, the city of Goleta and the Coastal Commission.

Oil produced at the 421 piers would be shipped to the EOF via pipeline and processed there. From the EOF the oil would be sent via line 96 to the EMT “unless and until” the South Ellwood full-field project is approved, which would then have the oil shipped via the proposed new pipeline from EOF to Las Flores.

While the seaward portion of the pier is in the jurisdiction of the lands commission, the portion adjoining the land is under city jurisdiction. Greig said the company could choose to process the oil and gas on the piers if the city does not give permission for them to be piped to the EOF.

According to the company, the output of the 421 piers would have a maximum 700 barrels per day over a “short lifetime.” While oil and gas production projects typically don’t have sunsets built into them, Greig said, Venoco would be willing to put a end date on the 421 piers’ oil and gas production.

Trucking as a last resort

Venoco also recently filed an application with the city to allow for temporary trucking of oil from the EOF. The idea to apply for the 90-day temporary trucking permit was the result of two incidents last year where the barge Jovalon went down for repairs after a leak was found in its vapor recovery system and after a collision with a dock in the San Francisco Bay.
“There was no other means of shipping (the oil) except for Jovalon,” said Anthony. No other barge is available, he said, because Jovalon is the only one outfitted to meet the Air Pollution Control District’s vapor control restrictions.

The permit would cover a single event over 90 days per year, and would allow temporary trucking of oil from EOF south to Highway 101 via Winchester Canyon onramp in western Goleta. If temporary trucking were needed, that would mean up to 36 trucks per day traveling south on the 101 freeway.

“That’s 36 trucks traveling over a bridge that’s falling apart,” said City Council member Roger Aceves. The Winchester bridge, and on- and offramp are listed by the city for replacement because of degrading materials used in its construction.