Remnants of a house that’s long since disappeared were popping up from the recently rain-soaked ground. The first signs of spring bulbs peered through neon sprigs of new grass, looking east across Foxen Canyon.
To the west, a narrower canyon with gently sloping expanses touched by 100-plus years of agriculture and oil drilling seemed to sink into the lushness of foliage that comes after hard winter rains. From this vantage point, the home built by one of the many oil companies that owned this hill would have overlooked all of it.
Pumpjacks bobbing up and down with economic fervor. Cattle grazing their way onto dinner plates. Grape vines twisting into tangles of purple and green fruit. Oaks, scrub brush, roadrunners, coyotes.
Daffodils. Lilies. Irises.
An oil processing facility. The occasional tanker truck. Pipelines that crisscross the hilltops and valley floor.
It’s all been here for decades. Fading and reinvigorating with each drought and March miracle, each economic boom and bust.
Aera Energy has owned this hilltop since 1997. Between 1913 and the late 1980s, Aera’s particular 2,100-acre slice of Cat Canyon produced about 10 million barrels of oil. In 1989, production stopped. Within the first 15 years of Aera’s purchase, the company systematically plugged and abandoned 178 wells. Things were quiet for a couple of decades, and now Aera is pushing for revitalization of the oil drilling that once hummed across its property—and so are two of its neighbors.
More than 1,600 oil wells are either active or plugged in the Cat Canyon Oil Field. Currently in the hands of eight companies, the field is poised for another evolution. ERG Resources LLC, Aera Energy, and PetroRock LLC are each at some stage of the planning process with drilling projects that could add up to 666 oil, injection, and water wells to Cat Canyon. ERG’s project is the farthest along. A Santa Barbara County Planning Commission hearing on the final environmental impact report (EIR) started on March 13 and will continue on March 27.
Each project is unique to its operator, although all incorporate some form of steam-enhanced oil extraction—a technique that’s been used in the canyon for decades. Aera Energy is touting the new technology that will come with its redevelopment: a fully digital oil field with wells that have a minimal footprint in a county with the strictest environmental standards anywhere, Aera Public Affairs Project Manager Rick Rust said.
“We’re excited to have the opportunity to develop a state-of-the-art, modern oil field here in Santa Barbara County that should really be the model for the rest of the world,” Rust said. “If we get the opportunity to build a whole new field, we’re going to go in with the newest technology.”
Those advances in extraction techniques might just be matched with steps forward in the environmental review process.
On May 26, 1988, the county held a public hearing on a plan proposed by Texaco to drill 30 “steam-assisted” oil production wells and build 13 new well pads in Cat Canyon. The project was awarded a negative declaration, meaning it didn’t have to undergo an environmental review. The final document, which the county provided to the Sun, was 16 pages, appendix included.
ERG’s final EIR released in February 2019 was more than 400 pages— before the appendix—for a 187 “thermal” oil well project on existing pads. But those pages still don’t contain enough information for some opponents of the project, who’ve been vocal in their disapproval of new drilling in Santa Barbara County.
A team from the Environmental Defense Center spoke for 20 minutes during the March 13 ERG hearing, listing item after item they felt needed more information in the EIR. Groundwater and surface water. Endangered species. Emissions. Potential for spills. Climate change. Cumulative impacts from multiple projects. Chemicals used in drilling and well-cleaning activities.
Rebecca August, a volunteer with the group Safe Energy Now, North County, told the Sun that the projects wouldn’t get so much opposition if they were cleaner with less potential for destruction.
“If someone came up with some way to extract and then transport and then burn fossil fuels—you know, oil—without causing tremendous damage locally and to the climate, then it wouldn’t be something that we oppose,” August said. “The reason we oppose it is it threatens our water and threatens our air quality and puts more trucks on the road … it’s just bad for our communities.”
Future of hydrocarbon
Cumulatively, the three projects have the potential to produce 22,000 barrels of oil each day, according to county Energy Specialist Errin Briggs, who gave the staff presentation about ERG’s project on March 13. That peak production, he said, would come with 753,620 tons of greenhouse gas emissions every year and 185 truckloads per day of oil on county roads.
Each company will have to mitigate their emissions down to no more than 1,000 tons a year to comply with the county’s standards (which are stricter than the state’s). The companies are big enough emitters that the state will require them to purchase credits through California’s cap-and-trade system, and the county has a preference that the companies mitigate locally first, according to John Zorovich, deputy director of the county Planning and Development Department’s Energy Division. The list of local mitigation measures include expanding the use of zero-emission school or transit buses; installing battery electric and fuel-cell electric vehicle infrastructure; planting urban forests; conservation projects on agricultural land; and retrofitting buildings for energy efficiency, renewable energy, and/or battery storage.
Aera has plans for a large conservation area that runs along its eastern border, while ERG wants to install electric vehicle charging stations in areas of the county that lack the infrastructure. PetraRock is still in the process of working with the county to draft its environmental impact report.
Many Santa Barbara County residents who spoke at one of the recent hearings—either at ERG’s March 13 Planning Commission hearing or Aera’s public scoping hearing on Jan. 17—say that “any amount of emissions is a step in the wrong direction” when it comes to climate change.
Oil proponents argue that the oil we use has to come from somewhere, and with the county’s strict environmental standards, it might as well be produced locally. Both Aera and ERG have acknowledged that the future of energy is in renewables, but until society fully shifts to energy sources such as solar and wind, it will be dependent on hydrocarbons.
“We want to be part of that clean energy transformation, but we also believe that hydrocarbons need to be part of the conversation,” Aera’s Rust said.
And if there is going to be oil produced at all, it should be produced locally because, the companies argue, Santa Barbara County and California are both ahead of the game when it comes to regulating emissions and environmental standards. Those same protections don’t necessarily exist overseas.
During ERG’s presentation on March 13, spokesperson Nathan Eady with SCS Engineering said that Cat Canyon represents a very carbon efficient way of producing oil locally, rather than importing it by boat from another continent. He clicked over to a slide in his PowerPoint with a table of numbers tallied by California’s Air Resources Board (CARB), which, among other things, tracks the carbon intensity of crude oil production and transport from oil fields around the world. Cat Canyon had an average carbon intensity of 4.08 in 2017, which was lower than California’s average of 11.93, Canada’s Shell Synthetic (21.39), Columbia’s South Blend (9.22), or Saudi Arabia’s extra light (9.35).
“CARB is constantly looking at this and using it in part to look at cap and trade as a tool,” Eady said. “What we’re endeavoring to do is always stay well ahead of that curve for the remaining years of fossil fuel usage to provide the most carbon efficient way that we can.”
August, with Safe Energy Now, looks at the locally produced oil argument as a false one. The thick oil produced in Cat Canyon is usually cut with a less viscous petroleum product from Southern California before it’s transported to the Phillips 66 refinery. From there, it gets moved to another refinery, August said, either in Los Angeles or San Francisco, where it gets further refined and mixed with oil from other producers.
“It’s not like locally grown produce or even beef that you can grow in your neighborhood,” August said. “Just because we make it here doesn’t mean we can go to our gas station and buy our locally produced gas and that it will respond to our local usage needs over time. That’s a myth.”
As Californians wean themselves off of oil over the next few decades, energy use in the state and local consumption will drop, August said. These oil projects that are in the pipeline now will continue to produce oil over their 30- to 50-year lifetimes—and export it if they need to. Plus, August said, oil isn’t an infinite resource. It will eventually run out, and we should be saving it for use in the products that it’s vital for, such as heart valves.
“We hear a lot that we all depend on these things, and that’s absolutely true right now, but that’s something that the oil companies have created this situation where they’ve made their product ubiquitous in everything that we use,” August said. “This is a precious resource. … We shouldn’t be setting it on fire; it’s a precious substance that we need to conserve so that the future has it for the needs that it’s uniquely suited for.”
The plans
Cows intersperse with pumpjacks at the entrance to ERG’s main facility off of Cat Canyon Road. Across the road and up the hill on the other side of the valley is Aera’s property. Although similar in nature, the Aera and ERG projects are different. Aera would be building an operation essentially from the ground up, save for the roads and oil well pads that already exist on the property. ERG would be adding to its existing operation, which produced an average of 2,940 barrels of oil per day in 2014 from 500 active and idle wells, according to the final EIR.
Both projects would use steam in some way, heating water in generators before injecting it into sands between 2,500 and 3,500 feet below, letting it soak for days to months, before opening a well for it to flow up and out of.
“By heating the oil with steam, viscosity would be reduced, allowing the oil to more readily flow out of the reservoir, into the wells, and into the surface pipelines and processing areas,” Aera’s draft EIR states.
Steam has been used in this way at Aera’s site since the 1960s. On ERG’s side of the canyon, steam was permitted for use in oil production in the 1980s.
The projects overlay the Santa Maria Valley Groundwater Basin, and wells are drilled through the shallow aquifer to reach the oil reservoir thousands of feet below it. Several of the public comments received about the projects are concerned “over contamination from routine drilling,” Energy Specialist Briggs said during his March 13 presentation.
Because of the comments received on the project’s draft EIR, ERG modified the casing design of its wells for the final EIR to add an extra layer of cement and steel at the top—“an extra layer of protection that drops down into the freshwater aquifer,” Briggs said.
SCS Engineers’ Eady said that ERG did that because they heard the public’s concerns, and “protecting groundwater is of paramount importance.” At the hearing, Eady explained that the company has three existing freshwater wells in close proximity to both capped and active wells, some of which are cyclically steamed.
“ERG has voluntarily monitored the quality of water in those wells since 2012. There is no sign of degradation or contamination in that time,” Eady said. “The wells we are designing are even stronger and better designed.”
For folks like Safe Energy Now’s August, Eady’s comments aren’t reassuring.
“All of those wells go straight through the Santa Maria aquifer. There’s a risk as the drilling happens. There’s a risk as the well is being pressured. There’s a risk after the well is not longer active. There’s risk the whole time,” said August, who lives near Los Alamos. “And most of us are on groundwater. If we had to truck in water, we wouldn’t be able to afford where we live. … Maybe it’s already contaminated; we don’t even know.”
She points to a report on hydrogeologic conditions in the Santa Maria Valley as proof that not everything is as uncontaminated as the oil companies would lead the community to believe. The annual report released by the city of Santa Maria in April 2018 states that in addition to nitrate and pesticide contamination found in Santa Maria Valley Management Area water, “it is noted that point source contamination derives from historical use of organic chemicals, primarily petroleum products and their components … .
“Point sources of contamination are primarily old drilling sites, commercial underground fuel storage tanks, and oil refineries,” the report states. “It appears that as many as 60 active investigations of possible or confirmed contamination are being conducted between Sisquoc and Guadalupe under the requirements of the [Central Coast Regional Water Quality Control Board], which maintains primary responsibility for water quality protection.”
A trust thing
Companies such as HVI Cat Canyon (formerly known as Greka Energy) don’t help the reputation of the oil industry. At a Feb. 12 hearing before the Santa Barbara County Board of Supervisors on the compliance status of oil and gas operations in the county, Energy Division Deputy Director Zorovich explained that the majority of violations come from a single operator: HVI.
Andy Caldwell from the Coalition of Labor, Agriculture, and Business lamented the fact that HVI/Greka’s compliance failures were lumped in with all of the other operators in the county.
“I wish you would separate Greka—or whatever their name is now—from all of the other operators because they gave all the other operators a black eye,” Caldwell said during the meeting. “The bottom line is the rest of the industry’s record is absolutely stellar if you separate out that one company’s foibles over the years.”
Most recently, the California Department of Conservation Division of Oil, Gas, and Geothermal Resources (DOGGR) filed a stop-injection order against HVI Cat Canyon in December 2017 due to what it alleged was a failure to comply with regulations at an oil field the company operates in Orange County. The more than 1,500 instances of violations that DOGGR alleged included failing to perform well integrity tests and failing to submit accurate data to DOGGR.
An attorney for HVI filed a response to the order that “generally” denied the allegations, but in April 2018 DOGGR issued fines against the company totaling more than $12 million.
In December 2018, the federal Environmental Protection Agency served search warrants at the oil company’s facilities on Sinton Road in the Santa Maria Valley, although the EPA didn’t specify why or what it was looking for.
Regardless of HVI’s reputation as a bad actor, Aera and ERG are pushing the environmentally sensitive aspects of their projects. Both are attempting to develop operations that disturb as little of the surrounding environment as possible by using existing development on their sites.
Aera is pushing forward with what’s termed the “oak avoidance alternative” in its draft EIR. This alternative would result in 95.5 acres of permanent ground disturbance as compared with the 201.4 acres under the initially proposed project, as well as cutting down 280 trees compared to 1,500 and the creation of 37 new well pads compared to 72.
“It’s going to cost more, but that’s what we’re going to do,” Rust from Aera said. “When we’re challenged to lower our footprint and disturb less of the environment, we can get that done. We have the technology.”
ERG is moving forward with the no new well pads, reduced well count alternative outlined in the final EIR—county staff’s preferred alternative. It reduces habitat impacts by 12.7 acres, would drill new wells off of existing well pads, and reduces the number of wells proposed by 20 percent.
ERG CEO Alan White, who spoke at the hearing on March 13, said that ERG will accept a reduction in production capacity because it respects the process and wants to reassure the public that it’s committed to protecting the environment.
“Our employees and contractors who are represented in this room today all drink the same water and breathe the same air as everyone else in the room,” White said during the hearing. “Everyone at ERG wants to make sure that we protect the cherished environmental resources that are in Cat Canyon because it’s such a special part of the county.”
John Wickenden, whose family has owned a ranch in Foxen Canyon for 182 years, told the Sun that his family has benefitted from its relationship with the companies that operate in Cat Canyon. Oil was discovered about 70 years ago on the eastern side of the property close to Cat Canyon. The five oil wells on Wickenden’s family land are currently operated by ERG.
“We’ve had several people do business with us, and I’d have to say that ERG is the best one that we’ve ever dealt with, and they’re outstanding as far as I’m concerned. They’re tops,” Wickenden said. “They’re up front, they care about safety. They’re cognizant about the environment. … They treat the leases right.”
That hasn’t always been the case with oil companies that have operated the wells in the past, Wickenden said. Still, the ranch relies on groundwater, and he said they’ve never had a problem with contamination. One of the freshwater wells drilled on the eastern side of the property goes to about 400 feet. It’s close to the oil wells, which are drilled to 2,000 feet or deeper, Wickenden said.
For 182 years, Wickenden said, they’ve never had any real problems with their hydrocarbon-producing neighbors and have operated symbiotically with them. His family has been able to continue its cattle business in tough times thanks to the additional oil income.
“We certainly don’t want to ruin our property, and we want to keep it viable,” Wickenden said. “A lot of these negative things that you hear, like water and pollution and what-have-you, are overblown and are not really factual. Exaggerated is a good word.”
Editor Camillia Lanham can be reached at clanham@santamariasun.com.
This article appears in Mar 21-28, 2019.