Mobil Exploration & Producing Inc. has received a surprise setback in its proposed $1.8 billion project to tap off shore oil with extended reach wells from an onshore site in Santa Barbara County, Calif.
The University of California at Santa Barbara (UCSB) late last month rejected Mobil's plan to set up drilling operations on the company's 17 acre site near proposed university housing.
Mobil's Clearview project calls for developing the Coal Oil Point extension of South Ellwood oil field in the Santa Barbara Channel with extended reach wells from the onshore site.
UCSB's move may stymie other efforts to reopen state waters to oil and gas development. That's because the project is considered a model for dealing with strong local opposition to offshore oil and gas platforms.
Santa Barbara independent Molino Energy also has proposed an extended reach project to tap offshore hydrocarbons from an onshore site (OGJ, Oct. 17,1994, P. 46).
SURPRISE DECISION
Mobil said UCSB's decision took the company by surprise, calling it "astounding ... because information from UCSB was to wait until the environmental impact report (EIR) was finished."
But UCSB decided it had enough information without an FIR, said Robert Kuntz, assistant chancellor.
" In our judgment, the proposed Clearview project is incompatible with land uses, both current and proposed," he wrote in a rejection letter to Mobil, the Santa Barbara County Board of Supervisors, university regents, and state officials.
In what UCSB Chancellor Henry Yang termed a consensus decision, a university task force said allowing an industrial facility near its planned 400 unit faculty/student housing project posed a safety hazard and could "devastate" recruiting efforts because faculty housing would be less attractive if located near ail oil facility.
MOBIL'S OPTIONS
Mobil said it is not giving up the project. It has other - if less attractive and more expensive - options.
These include drilling from another onshore site to be determined or expanding Platform Holly, which is developing the 50 million bbl of oil reserves originally contained in the western portion of South Ellwood field (see map, OGJ, July 5,1993, P. 20).
At stake is more than 100 million bbl of oil in state waters off Coal Oil Point near UCSB that Holly was not designed to reach.
ARCO tried to develop Coal Oil Point extension with two proposed platforms in the early 1980s. It gave up when the state and county rejected the project in 1987, essentially objecting to the sight of more platforms on the horizon. ARCO then quitclaimed the two Coal Oil Point leases, PRC 308.1 and 309.1, to the state.
California State Lands Commission staff in 1993 suggested the leases could be developed via extended reach wells from shore.
Mobil took up the idea, in 1993 acquiring ARCO's interests in Platform Holly and its related leases 3120, 3242, and 421, the nearby Ellwood processing plant and marine terminal, and
an under-water oil/gas seep containment structure.
Mobil proposed early dismantling of Platform Holly in exchange for developing the quitclaimed leases via a safer, onshore drillsite. Extended reach wells from that site would tap reserves 3 miles offshore and as much as 10,000 If below the seabed.
Mobil said the Coal Oil Point reserves could be reached from Holly by expanding platform capacity and adding well slots. But that would not have the environmental benefits of the Clearview proposal.
"We still think it's a great project, and we're hoping to find some good alternatives," Mobil told OGJ.
Total original proved reserves of South Ellwood field, including the Coal Oil Point extension, are an estimated 155 million bbl of oil and 150 bcf of gas. Only one third of that can presently be reached by Holly.
OTHER DEVELOPMENTS
In other developments related to Mobil's Clearview, project:
- An environmental coalition will continue with plans for an initiative proposal that would give final authority to voters instead of county supervisors (OGJ, June 26, Newsletter). "Threats to our coast still abound, and there are all sorts of other options for Mobil," said Greg Helms of the Santa Barbara Environmental Defense Center.
- Mobil still plans to buy a golf course that was intended to act as a buffer between onshore Clearview facilities and UCSB's proposed housing. Mobil said that could be used as a drillsite, but it also would entail permission from UCSB to drill under its property.
- Santa Barbara County canceled a June 26 hearing on rezoning the Clearview property from residential to industrial due to UCSB's decision against Mobil.
- Mobil's operations on the UCSB property, mainly oil storage, will not be affected until its lease expires in 2016. The related Ellwood oil processing plant 2 1/2 miles away is designed to process as much as 20,000 b/d but is limited to 13,000 b/d because of air quality constraints. Current South Ellwood production via Holly is about 5,000 b/d.
