The oil exploration company planning to sue San Benito County over the anti-fracking measure that voters passed on Nov. 4 portrays itself as a victim unfairly being denied access to oil worth at least $1.2 billion.
What Citadel Exploration doesn’t mention, and what wasn’t mentioned in initial TV news reports on the lawsuit threat, is that its exploration efforts were halted by a Monterey judge this summer because it had not performed adequate environmental studies.
In a ruling reported earlier by the Partisan and others, Monterey Superior Court Judge Tom Wills wrote that San Benito Counthy officials had not seriously contemplated the “numerous opportunities for toxic spills” at the Indian Wells project, part of the company’s “Project Indian.” Judge Lydia Villarreal had earlier ruled that the project could continue but Wills said no.
Wills agreed with the Center for Biological Diversity’s view that a complete environmental impact report was needed for 15 test wells. The center’s lawsuit focuses on whether an operator is required to analyze just the isolated repercussions of the test of individual wells or the impact of the full potential development. Wills determined the review needed to focus on the larger project.
Citadel and other oil companies spent more than $2 million to unsuccessfully oppose the Measure J initiative, which 58 percent of county voters supported on election day. Mendocino County voters passed a similar ban but another was rejected in Santa Barbara County.
In San Benito, the opposition campaign was also backed strongly by farmers who hoped to sell rights to oil below their fields. Campaign advertising hammered on the message that Measure J would ban fracking in San Benito County even though there was no fracking in San Benito County, an apparent effort to make the measure sound frivolous. While Citadel maintains that its “thermal injection” process for finding oil does not constitute fracking, the measure is broad enough to include the technology.
Citadel signaled its next step the day after the election by filing an 8-K form with the U.S. Securities and Exchange Commission. In it, the company said Measure J amounted to a regulatory taking and said it would ask the county to “compensate the company for the diminished value at the Indian Oil Field based on the reasonable Unrisked Resource Potential the property would ultimately yield, or allow Citadel to proceed with full field development and steam injection under the exemption ordinance.”
It followed up the next day with a letter to the county saying the San Benito wells could yield between 20 million and 40 million barrels of oil