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Santa Maria Sun / News

The following article was posted on July 10th, 2019, in the Santa Maria Sun - Volume 20, Issue 19 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [santamariasun.com] - Volume 20, Issue 19

State commission terminates oil and gas leases offshore Santa Barbara County

By Zac Ezzone

The State Lands Commission terminated three oil and gas leases and a right-of-way lease for a pipeline off the coast of Santa Barbara County after the companies holding the leases failed to pay rent for more than three years.  

Carone Petroleum Corporation stopped making annual rental payments on the oil and gas leases in 2015. Signal Hill Services stopped making annual rental payments on the pipeline right-of-way lease in 2016, commission senior attorney Seth Blackmon said during the June 28 meeting where the commission approved these terminations.

The oil and gas leases cover almost 4,000 acres of ocean that will now be returned to California’s Coastal Sanctuary, which means the area can’t be leased in the future, according to a statement released by the commission after the meeting.

The areas in the oil and gas leases haven’t been productive since 1992, so there isn’t any infrastructure that needs to be removed, Blackmon said at the meeting. However, the pipelines within the right-of-way lease area are productive and will need to be decommissioned and cleaned out before being removed.

At the meeting, Bruce Cowen, a representative from Carone Petroleum Corporation and Signal Hill Services, said the termination would result in about 50 people losing their jobs. He cited numerous obstacles the companies have faced, including destruction during the Thomas Fire, which contributed to their falling behind on rent payments to the state.

After hearing pleas from Cowen and numerous Carone and Signal Hill employees, commission Executive Officer Jennifer Lucchesi told the commission that she stood by staff’s recommendation to terminate the leases. 

“We understand that there might be some differences in how we interpret the communication that has occurred over a number of years, but the fundamental issue is that they had an obligation to comply with the lease terms, and they failed to do so year after year,” Lucchesi said.

Zac Ezzone




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