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Graph showing falling oil prices in the marketINDUSTRY PAYING LESS THAN $5 MILLION IN LOCAL TAXES

The decline of gas prices at the pump over the past year, from well over $4 a gallon to less than $3, has been a reflection of declining oil prices, including the value of the oil produced in Monterey County.

That means that the oil company advertising in opposition to Measure Z on the November ballot contains figures that are seriously out of date. In commercials opposing the anti-fracking measures, the industry says it pays $9 million in local property taxes annually based on the oil value. One of the most recent mailers from the oil industry says, “If Measure Z is passed it could end up costing Monterey County $9 million in funding per year, which is currently used to support vital public services like schools, police and fire districts.”

The industry’s local tax bill for this year, however, actually will be “somewhere south of $5 million,” according to Monterey County Assessor Steve Vagnini.

An analysis by Vagnini’s office in July reported that “the assessed value of crude oil in Monterey County has gone from $980 million to approximately $511 million in the last three years as a result of the decline in the price per BBL (barrel).” Since then, the value has continued to decline to below $500 million, said Vagnini, who added that he still has serious concerns about the Measure Z’s potential financial impact on local government, especially if litigation results.

Vagnini’s office presented the reduced amount to the Board of Supervisors earlier this year to be taken into account for next year’s budgeting.

“Oil prices dropped on Monday, weighed by oversupply concerns, with U.S. crude dropping below $50 as trade volumes spiked ahead of the Oct. 20 expiry date for American futures contracts.” CNBC

Roughly, the annual property tax paid by the oil producers works out to about 1 percent of the value of its product. If oil prices continue to decline, it is possible that the oil industry will spend as much on anti-Measure Z advertising as it does in local taxes this year. As of last week, Chevron and others had put about $3.7 million into the campaign against the ballot measure. The industry-financed opposition effort argues that passage of Measure Z would create significant layoffs and increase the nation’s reliance on foreign oil, but the leading argument and focus of the TV advertising is that it would cause the loss of $9 million in local taxes.

Jim Eggleston, a spokesman for Protect Monterey County, the sponsor of Measure Z, says the actual reduced tax figure  “exposes how phony their argument is.”

“Measure Z doesn’t shut down anything,” Eggleston said. “It was written specifically to answer the takings question. It’s really about water.”

Measure Z would ban fracking in Monterey County and require the oil industry to adopt technology that would stop the practice of injecting tainted wastewater back into the groundwater supply.

Even at $5 million, the oil fields of San Ardo and elsewhere in southern Monterey County are major contributors to local government operations, including schools. Vagnini mentioned that the  proposed Hartnell College bond on the upcoming ballot will become more expensive for Salinas Valley homeowners if Measure Z causes an oil industry slowdown or shutdown.

The process of assessing oil fields is complicated, involving various formulas that account for factors such as the thickness of the oil – Monterey County’s is particularly thick — but the written analysis by Vagnini’s office does a good job of simplifying things:

“Crude oil prices fluctuate on a daily basis with many variables that affect daily prices. The oil prices may fluctuate from domestic or foreign market reasons. OPEC often can set (price fix) foreign oil prices by either flooding the market or reducing production, which in-turn affects all other crude oil prices, stock markets, futures market for both foreign and domestic oil.

“In the third and fourth quarter of 2015 through the first quarter of 2016, we saw some of the lowest crude prices in three decades. Iran and Iraq attempted to force OPEC into relinquishing control over oil prices by flooding the markets with their crude oil. OPEC in response did not curve their production of crude which created a surplus and brought oil prices down to the $20 to $30 per barrel (BBL) range which affected domestic crude oil prices.

“For lien date 2016 the Brent benchmark price was $41.00 per BBL. All oil in Monterey County is benchmarked at a Midway-Sunset (MWSS) 13 specific gravity which is the basis of most of the oil in the central California region. For lien date 2016, MWSS 13 was adjusted to $35 per BBL as a baseline, then each reporting field was adjusted either higher or lower based on their specific gravity of crude oil. Once a base price for the crude oil is determined we forecast the next 5 years and then hold the last number constant for the remaining economic life of the field up to 30 years.

“It is important to note that the current $35 BBL of oil only represents the current market value and does not represent the value of oil in Monterey County. In 2013 the MWSS benchmark was $95.50 BBL, in 2014 the MWSS benchmark was $101.00 BBL and 2015 MWSS benchmark was $54.00 BBL. The Assessed Value of crude oil in Monterey County has gone from $980 million to approximately $511 million in the last three years as a result of the decline in the price per BBL.”

The analysis predicts a slow and steady increase into 2017 but Vagnini’s figures this week indicate that the uptick has not yet started.

The analysis continues, “The price of oil prices also impacts decisions made by oil companies on future exploration. When the benchmark crude oil prices are low, oil companies tend to conserve resources and postpone the construction of new wells, new facilities and new projects. Conversely, when benchmark prices start going up, oil companies take more risks, invest more capital in projects, discover new reserves which all generate new taxable assets.”

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Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.So I was thinking about oil and fracking and other issues of the day, and I had an idea.

You’ve probably seen the TV commercials and the mailers paid for by the oil industry. They say that if Monterey County voters approve Measure Z, the anti-fracking initiative on the Nov. 8 ballot, it will shut down the local oil industry. (The ballot measure language says just the opposite, but we’ll let this issue slide for the moment.)

The commercials and mailers also tell us that the loss of the oil industry would cost various local government agencies $8 million or $9 million in property taxes each year. (They started out with $8 million but the number has grown in the last week or so.)

The commercials are pretty slick. They show a fire engine disappearing as it rolls down a country road and a firehouse vanishing. Nobody would want that to happen.

But that’s when I started thinking about those tax dollars. Let’s call it $9 million. On the one hand, that’s kind of a lot. But then again, is it really?

It amounts to just about 1 percent of the property tax income in Monterey County. And even if Measure Z did put the oil industry out of business, it wouldn’t happen all at once. The property values would decline over time but that would stop long before hitting zero.

The amount of property taxes paid by the oil companies in Monterey County works out to less than the property taxes paid by owners of the houses along the fairways of the Pebble Beach links. And the owners of those houses aren’t doing much to increase the carbon footprint. They aren’t using government-financed roads to send tanker trucks filled with crude to refineries out of the area. They aren’t pumping oily wastewater into the aquifers of Pebble Beach.

So here’s the idea.

If all those fancy commercials, the expensive scare tactics, the big lie technique, manage to beat back Measure Z, the community should stick together and require the industry to start paying for the privilege of getting rich from the resources of Monterey County.

At last count the oil companies had spent $3.7 million to fight Measure Z. They’re able to do that because they might as well be pumping money out of those wells instead of gas and oil. Last year, they pumped 7.8 million barrels of crude from the San Ardo fields, and smaller amounts elsewhere. At the current per barrel price, that oil was worth about $400 million.

That’s a lot.

If for some reason Measure Z fails, we need to find a way to make sure that the oil companies take responsibility for the environmental cleanup that their work surely will require. The bottom line issue addressed by Measure Z is the wastewater that the oil companies now inject into the ground as part of their processes. They say they aren’t hurting anything, but others who have studied the issue closely say it is only a matter of time before the current practices create a contamination crisis in the aquifers that serve the county’s much larger and much more important ag industry.

If Measure Z fails – and, perhaps, even if it passes – we should be requiring the oil companies to set aside a percentage of their take to create whatever technology is needed to ensure that the crisis never comes and to create a fund to clean up the water should it ever occur.

Just a couple of years back California legislators played around with a 9 percent production fee but those big-spending oil companies used campaign contributions to dissolve the legislative resolve. I’m thinking 9 percent sounds about right for Monterey County’s oil production tax, but let’s call it 10 percent just to make the math easier.

By the way. Yes on Z.

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Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.You might have seen those TV ads featuring four Monterey County mayors opposed to Measure Z, the anti-fracking initiative on the November ballot. They are Joe Gunter of Salinas, Jerry Edelen of Del Rey Oaks, Fred Ledesma of Soledad and John Huerta of Greenfield. They talk about how the oil industry is good for the economy. Left unsaid is how the industry has been good for Huerta, the Greenfield mayor, whose most recent job was in the oil fields of San Ardo, the focus of Measure Z.

Until December, Huerta did grading and cement work in San Ardo for Brinderson L.P., an oil exploration and production company working under contract to Chevron. Chevron, of course, is one of the main contributors to the No on Z campaign, which contends that the measure would shut down the oil industry of Monterey County.

Huerta lost his job when Brinderson lost its Chevron deal and laid off nearly 250 employees who had been working in the oil fields of Lost Hills, Coalinga and San Ardo. But Huerta said Monday that he has applications in to other companies involved in the oil fields and is hoping something comes through.

He said his opposition to Z is not personal, that he’s proud to be one the mayors featured in the commercials, part of a $3.2 million, industry-financed campaign against the ballot measure.

“It’s a good industry,” he said. “Good jobs.”

Huerta’s occupational status has been an on-again, off-again issue in Greenfield, where he narrowly escaped a recall effort in 2012 and now faces a second attempt. Meanwhile, he has been in the news there after city officials ordered an investigation into whether he acted improperly by ordering the city manager to order the police chief not to investigate a medical marijuana operation that has been operating in the city without permits.

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Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.The oil industry campaign against Measure Z is providing work for political consultants, lawyers, video production companies and caterers up and down California. As of Sept. 24, it had raised $3.3 million and spent a large measure of it on every form of advertising, including $8,000 on Facebook.

Measure Z, of course, is the November ballot measure that would ban fracking in the Monterey County oil fields and require the oil companies to stop injecting wastewater into the ground. The No on Z campaign is financed entirely by the oil industry — $1,812,480 from Chevron, $1,464,000 from the Shell and ExxonMobil–owned Aera Energy of Bakersfield, and $25,000 from oil property owner Mary Orradre.

Though the ballot measure would allow oil operations to continue, the industry advertising maintains it would end oil production in the county.

Unknown-1The listing of expenses from the No on Z campaign filing takes up dozens of pages and includes the purchase of numerous endorsements from slate mailer operations. A large share of the money went to advertising locally, with TV station KSBW receiving the biggest buy. The campaign relies on a Sacramento law firm for legal advice and numerous consultants for political advice but also used the L&G law firm in Salinas and local land-use consultant Maureen Wruck.

In contrast, Protect Monterey County’s Measure Z campaign reported collecting $143,402 from more than 100 contributors, including singer Joan Baez. That amounts to 4 percent of the total raised by the opposition .

The largest contribution on the anti-fracking side, $32,000, came from the Center for Biological Diversity, whose director, Kassie Segal, added $2,135.

Other major contributors included Paicines Ranch owner Sallie Calhoun, $10,250; Robert Frischmuth, $7,500; retired architect Robert Gunn, $5,390; Nancy Burnett, $5,000; environmental activist Gillian Taylor, $3,000; and retired dentist Dan Turner, $2,000. Also among the contributors were former Monterey City Councilwoman Nancy Selfridge, former Pacific Grove Mayor Dan Cort and Marina Coast water board member Jan Shriner.

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Anti Measure Z poll is as slippery as freshly fracked oil

Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.Opponents of Measure Z, the anti-fracking ballot initiative, are sponsoring a “push poll” that is almost refreshing in how little it tries to hide its purpose, to persuade rather than measure.

In case you’re not familiar with the term, the Google definition of “push poll” is clear and straightforward: “An ostensible opinion poll in which the true objective is to sway voters using loaded or manipulative questions.”

Sometimes when you receive a phone call from a push poll survey taker, it takes a while to detect the spin. Not this time.

My call came just at the end of the Chicago-Dallas football contest Sunday night. The young man on the other end of the line got right to the point. Are you a registered voter? Do you plan to vote in November? Yes and yes.

That was followed by a series of questions about Measure Z, which would prohibit fracking in the oil fields of Monterey County and prevent the drilling of new wells that rely on suspect production methods.

Have you heard or seen Measure Z ads on the radio, TV, Facebook, campaign websites, etc.? Yes, yes, yes, yes, etc.

If you knew the measure would end all oil production in Monterey County and cost the county millions of dollars in taxes and force the layoff of more than a thousand workers, would you oppose it?

Hmm.

I couldn’t exactly answer no because if that was so, I might actually oppose the measure. Couldn’t answer yes because it isn’t so.

There were more questions like that, several of them. One was about exporting foreign oil and one about how Measure Z is deceptive. There might have been one about coal. I didn’t take good enough notes to be able to reconstruct them here, but they were all in the same format. If you knew that Measure Z supporters are a bunch of crazy hippies, how vigorously would you oppose Measure Z? OK, that one’s not real, but you get the idea.

Then the form of the question changed. The “if” was eliminated.

The caller declared that the hospitality industry on the Monterey Peninsula opposes Measure Z because it would end oil production and cause the layoff of a thousand people. Then he asked, “Do you support or oppose that statement?”

Do I support that statement? Do I believe that the Monterey Peninsula hospitality industry opposes Measure Z. Probably so. The Monterey Peninsula hospitality industry and I often find ourselves on different sides of issues. Monterey PR man David Armanasco represents the hospitality industry and he’s working against Measure Z. When he’s against something, I’m usually for it.

Do I believe that the hospitality industry opposes Measure Z for the stated reasons? Well, not really. The people who speak for the hospitality industry of the Monterey Peninsula tend to go where the money is and the underlying rationale is likely an afterthought. For all I know, the industry might oppose it because Exxon promised to hold a convention here. The Deputy Sheriff’s Association opposes Measure Z because it got a big contribution from Chevron and because the sheriff’s biggest campaign contributor owns a big hunk of the oil fields.

Do I oppose that statement, the one about the hospitality industry’s position on Measure Z? I guess that depends on what you mean by oppose. Do I disagree with the position? See above. Do I oppose? The hospitality industry is free to believe anything it wants to believe. No opposition here.

At that point, I stopped answering the questions because I was starting to ask my own questions of the survey taker and he wasn’t in any position to answer them and I think he was getting upset.

The one thing I do know after participating in this poll is that if the oil industry tries to tell us that it conducted a poll and that some percentage of voters oppose Measure Z, I’m not entirely sure I will accept the findings as gospel.

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Monterey County’s oil industry is one of its newest economic drivers — or the oldest.

One beginning dates to November 1947 when the Texas Co. — later to be known as Texaco and today as Chevron — discovered the San Ardo oil field five miles south of the tiny ranch town of San Ardo. The discovery well was called Lombardi 1 and by the time it began daily deliveries of 155 barrels of very thick crude, the county’s far bigger commercial mainstays — agriculture, tourism and military bases — were well established.

DSCN0585 (2)But in another way, the origin of the county’s oil industry goes back 6 million to 17 million years, give or take a few million, when the oil-bearing geologic formation that underlies much of California’s Central Coast settled into place.

This Monterey Formation is a huge swath of shale and sandstone that stretches below rolling hills from the Salinas Valley to Ventura County and inland to Kern and Fresno counties. It holds potential for more untapped oil, though estimates of just how much vary widely. But the prospect of a 21st-century oil boom reliant on controversial, water-hungry methods to extract oil from the drought-parched Coast Range has sparked a fierce and growing environmental battle over the past decade.

In Monterey County, where the oil industry has been tucked away in a faraway and nearly forgotten corner for almost 70 years, the new oil war spurred a citizens’ push to put Measure Z on the November ballot. The measure would ban fracking and other “extreme oil extraction methods,” primarily as a protection against potential contamination of groundwater needed by farms and people. It also would prohibit new oil or gas wells, and phase out wells and ponds used to dispose of wastewater from current oil and gas drilling.

Measure Z puts the county’s oil industry squarely before voters throughout Monterey County. (Here’s a link to the website operated by proponents of Measure Z, Protect Monterey County. The opposition hasn’t created a site yet.)

The Monterey Bay Partisan will be delving into the coming shootout between environmentalists and oil industry boosters, but first we look at how we got here.

San Ado Oil Fields | San Ardo, California by Drew Bird Photography

The Salinas River runs through the San Ardo oil fields. Photo by Drew Bird Photography

DISCOVERY

The story starts near the community of San Ardo, a town town of 500 residents halfway between King City and Paso Robles. That’s where miles and miles of flat Salinas Valley cropland finally give way to rugged hills more fit for grazing cattle.

The town was laid out in 1886 when the railroad arrived and needed a water stopover. After a year, its Spanish-era rancho name of San Bernardo was changed to San Ardo to avoid postal mix-ups with San Bernardino.

From the beginning, the community had closer ties with northern San Luis Obispo County and Paso Robles than it did with the Monterey County seat in Salinas 70 miles to the north. As one old-timer put it in 1980: “In Salinas, they really aren’t sure we’re part of the county.”

After World War II, when operators began tapping wells in the San Ardo oil field, those ties extended eastward over the mountains to where bigger oil-producing areas had already grown up in Fresno and Kern counties.

The Monterey Formation had been extensively mapped and studied by geologists by the 1930s. The presence of oil around San Ardo was obvious to those who’d seen crude seeping from the ground in various spots.

When early oil ventures in Paris Valley, near San Ardo and west of Highway 101, didn’t pan out, oil prospectors turned to the east side of the Salinas River a few miles south of San Ardo. They drilled the 1947 discovery well in the Lombardi pool, and found two other pools in the San Ardo field by the next year. A county use permit was issued in 1949.

Getting the heavy crude out of the ground was a problem. More than 60 wells were drilled in hopes of tapping less viscous oil, to no avail. In oil industry parlance, San Ardo was a “reluctant” field.

DSCN0575

This map from the Drilling Edge website shows most of the inactive oil wells (purple) in Monterey County. San Ardo is in the middle of the image. King City is in the upper left corner

MOVING THE OIL

The San Ardo field was largely idle for four years. But as post-war demand for gasoline and other oil products grew, General Petroleum, a West Coast affiliate of Mobil, moved in and spent $36 million to buy half of the San Ardo field to compete with Texaco.

General Petroleum’s idea was to import light oil to mix with San Ardo’s heavy crude and heat the mixture so the blended oil would flow through a pipeline. But with the Korean War going, there was a shortage of steel to build new pipeline, according to the company’s 1972 history.

General Petroleum scavenged material from an oil pipeline between Lebec and Mojave on the southeast side of the Tehachapis. That pipeline had been made obsolete, ironically, by the switch of Santa Fe freight trains from steam to diesel engines. At a factory in San Miguel, the old pipe was reconditioned and fashioned into a 40-mile line from San Ardo to an oil tanker terminal at Estero Bay between Morro Bay and Cayucos in San Luis Obispo County.

Operating oil well profiled on dramatic cloudy skyThe first barrel of San Ardo crude arrived at Estero Bay in June 1951. The ocean-tanker terminal was active until 1999. Today, San Ardo oil is hauled by trucks and southbound trains to refineries in the Los Angeles and San Francisco Bay areas.

Of those early oil days in San Ardo, “Nobody was more surprised than I was that it became lucrative,” Margaret Barbree Rosenberg said in a 1980 interview for a University of California oral history project.

Rosenberg came from a pioneer San Ardo family, and the Rosenbergs, along with other pioneer families, still have some of the most productive wells in the San Ardo field on their land. Rosenburg said her family lost a little pasture from its 12,000-acre ranch, but cattle ranching and the new oil boom were an easy fit.

“Sometimes you go down there and see the cattle wandering through the oil fields,” she said.

Rosenberg said her family didn’t get extravagantly rich off its oil holdings.

“They bought more cars and things like that; but they’d always bought cars, so it really didn’t seem that different,” Rosenberg told the UC interviewer.

But the extra income helped keep ranch fences and roads maintained, and paid for costly irrigation equipment. That argument remains in vogue with South County landowners, who face the boom-or-bust cattle business, when they discuss efforts to block oil development.

BARRELS OF NUMBERS

Monterey County is the fourth-leading county of 20 California counties that produce oil.

Virtually all of it comes from the San Ardo field, which offers motorists and train passengers near the San Luis Obispo County line a few miles of scenery beamed straight out of West Texas.

Today, the San Ardo oil field ranks 41st in terms of productivity among U.S. fields, and is the 13th largest producer in California.

In 2015, 7.8 million barrels of oil were pumped from San Ardo, slightly more than 4 percent of the state’s total onshore production. Kern County alone produces three-quarters of California’s crude. Los Angeles and Ventura counties also out-produce Monterey County.

San Ardo isn’t the only oil field in Monterey County. Others discovered in South County, mostly in the 1950s and 1960s – include Lynch Canyon, McCool Ranch, Monroe Swell, Quinado Canyon and Paris Valley. They have produced little oil. The only one to yield “significant” amounts of oil besides San Ardo is the King City field, located near the hills west of Highway 101 six miles south of King City.

San_Ardo_Oil_Field_MapOver the years, wildcat exploratory wells have been drilled in Fort Ord, Laguna Seca, Seaside and the foothills above Spreckels, county planning documents say.

The group Protect Monterey County reported this year that 3,876 oil and gas wells have been sunk countywide, of which 1,108 are active. An oil industry trade publication says this year there are 551 producing wells in the San Ardo field and 3,683 wells on file.

The two big players in San Ardo are Chevron Corp. and Aera Energy LLC, which are also the two biggest oil producers in the state.

This year, Chevron has about 300 producing wells in San Ardo, a trade publication says. By contrast, Chevron has 16,000 wells in the San Joaquin Valley.

Aera Energy, a Bakersfield company formed in 1997 and owned by Shell Oil and ExxonMobil, has about 240 San Ardo wells in production. A smaller operator, Eagle Petroleum, has 22 producing wells.

A 2013 industry study said there were 190 employees in Monterey County working in oil and gas extraction, another 23 in well drilling, 126 in oil-and-gas support jobs, and two in pipeline construction.

A total oil industry work force of 1,233, the study said, included 721 employees in gas station jobs, 117 in petroleum wholesaling, 35 in natural gas distribution and 19 in fuel sales. In all, the number of oil industry jobs represented 0.8 percent of county employment. Total employee income came to $116 million.

A REALLY GOOD YEAR

In Monterey County, 1967 was a special year.

It was the Summer of Love, when performers Jimi Hendrix and Janis Joplin blew minds and ushered in a new era in pop music at the Monterey Pop Festival under oaks at the Monterey Fairgrounds.

At the other end of the county, San Ardo oil field workers labored on another chart-buster. Fifty new wells were drilled that year, a frenetic pace of almost one new well a week. Chevron was pumping 27,000 barrels of crude a day.

By year’s end, 1967 would go down as the most productive year in San Ardo history. The 20-year-old field yielded 18.1 million barrels from 885 producing wells, well more than double its output in 2015.

Oil and gas well profiled on sunset sky

San Ardo’s biggest years — in which annual output regularly topped 10 million barrels — began in the mid-1950s and lasted through the 1970s. It was regularly among the state’s top 10 producing oil fields.

Though it was by far the biggest, San Ardo wasn’t the only Monterey County field that produced oil in 1967. The King City field yielded about 135,000 barrels, and other fields produced crude by the hundreds and thousands of barrels, state records show.

Technology changed to keep pumping the crude. By the mid-1950s, San Ardo operators were turning to “thermal recovery” techniques, which were widely used in other California oil districts, to coax more of the extremely thick crude from the ground.

In 1957, an estimate for the “ultimate recovery” from the San Ardo field was pegged at 200 million barrels. By the mid-1970s, that estimate rose to 530 million barrels based on San Ardo’s response to “reservoir stimulation” techniques.

The thermal recovery methods to squeeze stubborn crude from the ground go by a variety of names — steam injection, steam flooding, water flooding, steam cycling, fire flooding. They all heat underground oil to make it move more easily through rock and push it toward production wells.

At a 2014 industry conference in Bakersfield, Chevron predicted “many more years of successful production” in San Ardo. Steam injection is now used throughout the field. More new technologies — 3D-modeling and horizontal drilling (where well boreholes turn to the side to follow layers of oil-bearing rock) are being employed, the company said.

Through the 1980s and 1990s, the Monterey County oil industry embodied by San Ardo generated little media attention, aside from occasional feature stories or “local reacts” to wild gyrations in world oil markets. The subject of oil never arose during a decade-long fight over the county general plan.

But the oil industry’s low profile vanished dramatically in recent years. Measure Z puts it front and center.

IN THE SPOTLIGHT

In 2004, Chevron applied in Monterey and Fresno counties to build a 58-mile oil pipeline from San Ardo to Coalinga to connect with a major north-south pipeline on the west side of the San Joaquin Valley.

Unknown-1The big project didn’t attract notice until two years later when Monterey County commissioned the project environmental study. Chevron wanted the pipeline so it could stop using trucks to haul San Ardo crude. The company was using 20 trucks a day, but said increased pumping could require up to 200 trucks per day.

A big increase in South County oil production appeared afoot, but public reaction remained mute. The county approved the pipeline in 2008 and subsequently renewed the permit twice. The pipeline hasn’t been built.

By 2009, the national political winds were shifting dramatically, as fracked natural gas wells in Pennsylvania, Ohio and Colorado were linked to methane contamination in drinking water. A federal oil and gas lease auction in Monterey County — the first in a decade — was blocked over environmental questions about impacts on water and air quality, wildlife and greenhouse gases. Monterey County’s oil industry was no longer a forgotten cousin in a distant town. Increased scrutiny was putting it in the crosshairs of environmental politics.

It’s not the first time the oil industry has roiled county politics. In the 1980s, Congress had stopped auctions of federal oil and gas leases off the Central Coast six straight years. The issue hit the back burner with the 1992 approval of the Monterey Bay National Marine Sanctuary. That put waters from San Francisco to Cambria off limits to oil rigs.

In an earlier watershed event, county residents in 1965 blocked Humble Oil Co. from building a huge oil refinery on Moss Landing wetlands. A referendum drive to reverse a county supervisors’ 3-2 vote for the refinery forced Humble pack up and go away.

What led to the present showdown? Put simply, speculation that there is a lot of untapped oil on the Central Coast.

In 2011, the U.S. Energy Information Administration said the Monterey Formation could yield up to 15.4 billion barrels of shale oil, making it the biggest such reservoir in the country. Hydraulic fracturing, or fracking, is the common technique used to extract shale oil. Opponents say fracking threatens groundwater, increases seismic risks and uses too much water. The oil industry says it’s been safely used for years in California.

That bullish estimate for the Monterey Formation, which cast the Central Coast as the nation’s next oil capital, was dropped to 600 million barrels in 2014. Others have since put it as low as 21 million barrels, figuratively a drop in the barrel.

But a dizzying race for Monterey shale had already started. Oil operators reported inking exploration deals for tens of thousands of acres in Monterey County. Meetings on mineral rights were pitched to rural property owners. Federal auctions were readied for oil and gas rights on new blocks of land in South County.

As the shale-fracking story swelled, the pushback from environmental quarters grew.

In Monterey County, after decades of fights over pesticides, development sprawl, munitions cleanup at Fort Ord and water, the oil rush triggered new alarms.

Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.At first, the concerns were over risks from fracking wells; then over the compatibility of an industry that uses and pollutes great amounts of water with the water needs of Salinas Valley agriculture. The state’s five-year drought sharpened the debate.

In June 2009, local officials tried to slow the express train by delaying U.S. Bureau of Land Management plans to auction mineral leases on 35,000 acres near King City and Lake San Antonio. By 2011, environmental groups were in court over BLM auction plans for land in Monterey and Fresno counties. They said the potential dangers of fracking hadn’t been analyzed. A planned 2012 BLM auction for 12,000 more acres fueled more protest.

In 2011, Denver based Ven0co Inc., which reported having leases for 300,000 acres of Monterey shale, abruptly withdrew its application for nine exploratory fracking wells near Bradley in the face of environmental pushback. The company complained to the county it had already spent $10 million.

This March, Venoco, one of biggest operators in the Monterey Formation, reported filing for financial restructuring under Chapter 11 bankruptcy law. The company website lists two current major oil projects, both in Southern California.

By the end of 2014, San Benito and Santa Cruz counties had anti-fracking laws on the books. Several other local jurisdictions followed suit, accusing the state of dragging its feet on fracking regulations.

Attention turned to longtime oil industry practices to dispose of contaminated wastewater — injection wells and percolation ponds. There were reports of illegal wastewater dumping. And there were concerns that injection wells put aquifers at increased risk of contamination from chemicals in wastewater and fracking material.

In May 2015, environmental groups sought to stop operations of 2,500 oil wastewater wells, which they said were polluting protected aquifers. The group Protect Monterey County says there are 109 oil wastewater injection wells (44 operational) in the county, most of them near the Salinas River in the San Ardo oil field.

Without a phaseout of these disposal methods, Measure Z says, “Water contamination could have devastating impacts on agriculture, our local economy, and our water supplies.”

As the campaign heats up over Major Z in Monterey County, another oil industry battle continues to burn in San Luis Obispo County.

Phillips 66 Co. wants to expand its Santa Maria rail terminal to greatly increase oil train deliveries to its underused Nipomo refinery. Several jurisdictions along the proposed rail lines, including Monterey County, have objected.

Citing the possibility of an environmentally devastating oil-train derailment on the coastal line through Elkhorn Slough, Monterey County’s top planner wrote to San Luis Obispo County officials earlier this year.

He said Phillips 66 hasn’t looked closely enough at bringing crude to its Nipomo refinery via pipeline. And he pointed to Chevron’s long-proposed San Ardo-Coalinga pipeline as evidence “a local pipeline is feasible.”

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A portion of Aera Energy’s heavy crude operation at San Ardo, from the company website

The oil industry campaign to block the Measure Z anti-fracking initiative in Monterey County had put together a campaign treasury of $1.1 million as of June 30, and that’s without any input from local property owners who are in the oil industry or hope to be.

In the latest campaign finance filing with the county elections office, the industry group is now calling itself “Monterey County for Energy Independence – Stop the Oil and Gas Shutdown With Major Funding from Aera Energy and Chevron Corp.” MCFEISTOGWMFAECC for short.

It reports having received $300,000 from Chevron and $800,000 from Aera, the Bakersifield-based oil production company owned by Shell and Exxon Mobil.

On its website, Aera says it produced 10,200 barrels of heavy crude daily at its oil operations San Ardo. It says the oil operations, covering about seven square miles, sell oil on the premises for transport to refineries out of the area. The company says it has been producing heavy crude oil in San Ardo since 1952.

The industry group reports having spent about $440,000 so far, mostly for lobbyists and campaign strategists out of the area. Apparently heading the effort for the oil companies are two lawyers with the well-connected Nielsen Merksamer firm of San Rafael, Steven S. Lucas and Erin Lama. Lucas specializes in ballot measures and teaches election law at Stanford.

Locally, the committee reports having spent some $19,000 with the L&G law firm in Salinas, the firm formerly known as Lombardo & Gilles, which specializes in development, agriculture and marijuana law. It also reported owing $10,000 to Salinas planning consultant Maureen Wruck.

Details of Measure Z can be found at http://www.protectmontereycounty.org

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