Lad’s Corner

August 15, 2014

From Lad …

“My concern is that many of our citizens are confused about and/or have no information or bad information about Measure P. This presentation is intended to cause those citizens to be sure they get the right information and suggest to them where to get it from (the County Auditor has Impact Analysis Report available upon request).”

Lad Handelman Worthen One on One

See more from the interview here!







Download: Can the Oil Industry and Environmentalists Bridge the Gap

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Jim Nelson of SOS California responds to questions raised by locals surrounding the current moratorium on oil extraction in the SB Channel…

Assumption: Drilling for oil on the Outer Continental Shelf and other oil deposits in or offshore the United States would have little or no effect on gas prices for decades, if at all.

SOS: Experts and geological surveys conducted by the Minerals Management Service (MMS) indicate that there are 86 billion barrels of oil and 426 trillion cubic feet of natural gas in areas currently “off-limits” as result of the 1981 moratorium prohibiting drilling in these areas. Given the significant advances in drilling and production technology, which have occurred since 1981, most experts believe that these estimates are low. For example, in 1992 the oil and gas industry referred to the Gulf of Mexico as the “Dead Sea” as the Outer Continental Shelf was viewed as a mature province. It was not until the late 1990s that the Deepwater Gulf exploded and has since become one of the more prolific basins in the world.

Assumption: The current price of gas is driven by new demand in India, China, Brazil and other developing countries as well as the international weakness of the dollar. Despite much more significant new leases opened in Alaska and the Gulf of Mexico this year, oil prices have sky rocketed. Leasing in the Santa Barbara Channel won’t change this.

SOS: It is true that demand from developing nations such as India and China have played a major role in the current price of gas. The reason for this is the lack of new sources of supply. If Congress were to remove the 1981 moratorium it would signal to the world that the United States was willing to access these significant “off — limit” reserves– which would bring an immediate reduction in the price of oil. This is evident in the recent decline in oil prices from $140/bbl to $125/bbl today after President Bush lifted the executive order banning offshore drilling. The comment regarding Brazil is simply incorrect. Brazil is a net exporter of oil and a model of responsible development of significant offshore oil reserves.

Assumption: The U.S. currently imports 60% of its oil. Even were it possible to drill in every basin off Santa Barbara immediately (rather than in the 10-20 years it will really take to have new production), it might reduce this number to 59%.

SOS: We prefer to stay focused upon California. The state currently imports roughly 250 million barrels annually or 40% of its oil (principally from Middle East countries). There are an estimated 2.0 billion barrels of oil immediately available in the Santa Barbara channel out of an estimated 14 to 19 billion barrels of oil in total located offshore California. The Santa Barbara Channel is unique in that we already have an existing infrastructure in place so new reserves could be brought online almost immediately. Many of these reserves can be reached with new technology such as slant or horizontal drilling. Developing these reserves would also have the impact of removing the oil tankers transporting foreign oil, which routinely fowl our waters in the Santa Barbara Channel.

Assumption: A significant oil spill of the coast of California would have devastating environmental, economic and social consequences.

SOS: It really is time to get past the 1969 oil spill mentality and the use of fear to manipulate people. Significant new technological advances in safety procedures, which have occurred in the last 38 years, have led to an exemplary safety record. Perhaps the best testament to the failsafe procedures, which the oil industry now has in place can be seen in the aftermath of Hurricanes Rita and Katrina–two powerful 150-year storms which came right through the fairway of production facilities in the Gulf of Mexico. 160 rigs were moved off location and almost 400 platforms and 1,000 subsea wells were destroyed — yet virtually no oil of any consequence was spilled!

Assumption: Many leases already exist that are not being used. The current rush for new leases is nothing more than an attempt to use the current run-up in gas prices as an excuse to get more leases issued now. There is absolutely no evidence that it would lead to more oil production or lower prices.

SOS: The term of federal leases runs anywhere from three to 10 years, due to the time necessary to assess whether there are economically recoverable reserves within a given lease. With oil at historic highs and energy demand significantly outstripping supply, the oil companies have every economic incentive to evaluate existing leases and bring the product to market as quickly as possible. The fact that a number of land — based oil leases are inactive implies that there is substantial risk associated with the lease. One of the major risks is the stream of lawsuits filed by environmental groups that tie up these leases in litigation for years. For example, a federal judge recently stopped oil exploration in areas of Wyoming and Montana due to environmental lawsuits alleging that such development “might” affect the habitat of the sage grouse.

Assumption: Our  “addiction to oil” needs to be treated by finding alternative sources of energy, more efficient vehicles, more intelligent use of power, conservation, etc.  Investing billions more to pump out a little more oil only prevents those dollars from being invested in alternative energy. The suggestion that new oil development will fund alternative energy research and production is a cynical ruse.  If we want alternative energy, that is what we should invest in.

SOS: The problem is that neither Santa Barbara County nor the state has funding available to invest in alternative energy research. As a result, the funding for the proposal to invest in alternative energy can only come from the imposition of new taxes.  Californians paying almost $5.00 at the pump are already suffering. Development of renewable energy sources will take several decades, which will only drive the price at the pump much higher in the interim. SOS proposes that the county and state use the royalties from the new offshore production to fund the transition to alternative energy sources.

Assumption: Oil is a carbon-based fuel that contributes heavily to creation of greenhouse gases that cause global warming. Investing in new oil production will simply delay the day when we wean ourselves off of carbon-based fuels.

SOS: The mission of SOS California is to educate the public regarding the pollution impact caused by natural gas and oil seeps. While much of the focus has been upon the oil aspect, most are unaware of the significant air pollution caused by the release of natural gas/methane. Specifically 6,075 tons of reactive organic compounds (precursor to smog) are released annually into our air, surpassing all transportation vehicles, which produce some 4000 tons annually in Santa Barbara County. This level of airborne hydrocarbon contaminants can be as high as 10 times that of Los Angeles County.

Assumption: We spend a great deal of money pumping oil out of the ground and then storing it in our “Strategic Reserves.” Leaving oil in the ground will assure that we have a reserve available when it is critically needed, not merely expensive.

SOS: Keeping 85% of US areas off limits to energy exploration has contributed to our current crisis of gasoline almost $5 at the pump. The Strategic Oil Reserve is designed to protect our nation from the economic fallout from another terrorist attack and the potential of another oil embargo by OPEC nations. Leaving the oil in the ground and in the “off-limit” areas can only lead to higher prices at the pump. That is why today polls indicate that over 60% of Americans want to see us access these offshore and off limit reserves.

Assumption: Saying that we need to drill for oil to eliminate polluting seeps in the Santa Barbara Channel is disingenuous.  First, these seeps have existed for hundreds or thousands of years. Second, despite pumping from Platform Holly, adjacent to one of the most active seeps, natural seepage of gasses and oil has continued unabated. The impact of drilling, processing and refining more oil, plus burning it in our cars and trucks, is many times greater than a few natural seeps.

SOS: The natural seeps found in Pennsylvania in 1858 are what led to the creation of the oil industry, which funded the incredible economic success, which our country has enjoyed. The comments regarding Platform Holly are simply incorrect. A UCSB conducted in 1998 determined that the amount of seepage around the platform had declined by 50%. Current estimates are that the seepage in this area has been decreased by 80%.  Annually the volume of oil polluting Santa Barbara Channel waters is equivalent to the 1969 oil spill and roughly every four years we experience the equivalent of the Valdez oil spill. As a result our beaches are among the dirtiest in the world–anything but the pristine beaches we like to talk about–and the oil from our seeps contributes 55% of the tar found on Los Angeles County beaches.

Assumption: The quality of the crude oil and natural gas off of the California coast is terrible and therefore not useful or marketable.

SOS: The oil in the Santa Barbara Channel and off the California coast varies in quality. It tends to be heavier crude and is reflected in the price for which the oil sells.  New discoveries may be lighter or heavier crude. The oil is refined by CA refineries, so it is plenty good enough to supply CA oil needs.  Natural gas off the coast of Santa Barbara is pretty standard natural gas and is needed by CA for natural gas supplies.

Assumption: Rather than focus on new drilling, we need to focus on alternative energy sources. The Senate has failed to renew tax credits for renewable energies like solar and wind, which are critical to encouraging investment in these innovative technologies.  They will expire at the end of this year.

SOS: Californians need relief at the gas pump NOW! Tax credits for renewable energy have done nothing to alleviate this suffering and cannot be expected to have any impact in the near future. SOS believes we need to try something different–responsible extraction of existing oil reserves in the Santa Barbara Channel and offshore California will significantly reduce the seep pollution while providing the funding for the transition to alternative energy sources and other important county programs.