California blocks state waters oil project

By OGJ editors
HOUSTON, Feb. 11 -- The California State Lands Commission voted not to approve an extended reach drilling project that would have recovered nearly 100 million bbl of oil and brought as much as $5 billion to the financially insolvent state.

Plains Exploration & Production Co., Houston, had proposed in 2005 to drill 17 wells from shore and from existing Platform Irene to develop the Tranquillon Ridge prospect. Drilling was to start in 2009 and continue 5-6 years, and production would last 14 years.

Lt. Gov. John Garamendi, commission chairman and a former deputy Interior secretary under former US President Bill Clinton, said the plan "would signal that California wants to open offshore drilling." Garamendi also said US House Speaker Nancy Pelosi (D-Calif.) and other members of the California congressional delegation had concerns the lease would have undercut their attempts to reintroduce a federal moratorium on offshore drilling.

In return for being allowed to tap oil in the fractured Miocene Monterey formation 4-6 miles off the northern Santa Barbara County coast, Plains had offered to stop offshore oil drilling by 2022 and shut its oil and gas handling plant at Lompoc. Tranquillon Ridge would have been the first new lease granted in state waters since the 1969 oil spill.

Tom Bjorklund of the University of Houston wrote that the US Minerals Management Service estimates that discovered and undiscovered conventionally recoverable oil and gas resources of the Pacific OCS federal waters range from 14 to 19 billion bbl of oil equivalent. Potential in state waters may reach 3.4 billion boe, he said.

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