ARGUELLO SUIT SEEKS $100,000/DAY DAMAGES

Partners in the long delayed $2.5 billion Point Arguello oil development project have sued Santa Barbara County over its denial of an interim tankering permit for the project. The suit, filed last week in a Los Angeles U.S. district court, claims damages exceeding $100,000/day from the delay. It is not clear what time period is covered by the claim, but the county approved a series of permits in 1984-88 authorizing various phases of the project.

May 27, 1991

2 min read

Partners in the long delayed $2.5 billion Point Arguello oil development project have sued Santa Barbara County over its denial of an interim tankering permit for the project.

The suit, filed last week in a Los Angeles U.S. district court, claims damages exceeding $100,000/day from the delay.

It is not clear what time period is covered by the claim, but the county approved a series of permits in 1984-88 authorizing various phases of the project.

Three platforms, a marine terminal, an onshore oil and gas processing plant, and two pipelines have essentially remained idle for about 3 years (OGJ, Apr. 20, p. 37).

Plans call for the project to start up in June at 15,000-20,000 b/d of oil shipped via existing onshore pipelines to refineries outside Los Angeles. It is permitted to produce as much as 100,000 b/d.

SUIT ALLEGATIONS

The suit alleges the county violated state and federal law by depriving Arguello partners, led by Chevron U.S.A. Inc., of their property rights.

It noted the county adopted ordinances allowing marine transportation of the crude but "misapplied these ordinances to deny tankering."

The county also argued for use of the All American and Line 63 pipelines to carry the oil to Los Angeles, "a patchwork scheme requiring crude oil blending that was not envisioned by the county's own ordinances," the suit claims. The partners contend the alternative plan is clearly infeasible for economic and environmental reasons.

"In making its decision, the county has acted to the economic and environmental detriment of neighboring Kern and Los Angeles counties and against the nation's interest in securing vital energy production.

"By its decision, the county is also denying Santa Barbara residents an important source of local tax revenue."

Chevron's partners are units of Texaco Inc., Phillips Petroleum Co., Pennzoil Exploration & Production Co., Union Pacific Resources Co., Oryx Energy Co., Koch Industries Inc., Oxbow Energy Inc., Harvest Corp., and Simmons Santa Barbara Ltd, along with three undisclosed pipeline companies.