≡ Menu

 

NEWS FLASH: Monterey County Board of Supervisors votes unanimously to send the letter explained below.

 

The Monterey County Board of Supervisors is being asked Tuesday to send a letter to state regulators asking them not to allow oil producers to sidestep state and local regulations intended to prevent contamination of potable water supplies in southern Monterey County.

The state Division of Oil, Gas and Geothermal Resources, commonly known as DOGGER, is considering a proposal to expand exemptions for two of the San Ardo-area oilfields, which would allow additional use of injection techniques and underground disposal of wastewater from those processes.

Protect Monterey County, the organizers of the Measure Z anti-fracking initiative passed in November, has been lobbying the supervisors to enforce that measure and take other steps to protect the water and resist the oil industry’s attempt to pressure the county to disregard the letter and intent of the ballot measure.

Oil pump jacks at sunset sky background. Toned.

The letter being considered Tuesday was drafted for the county by the County Counsel’s Office, which earlier worked with the oil companies to delay implementation of Measure Z until the industry’s legal challenges have been adjudicated.

The matter is scheduled for sometime shortly after 10 p.m. at the supervisors’ chambers, 186 W. Alisal St. in Salinas.

The draft letter follows:

To Whom it May Concern:

The County of Monterey (“County”) submits these comments in response to the Notice of Proposed Aquifer Exemption (“Notice”) published by the California Department of Conversation, Division of Oil, Gas, and Geothermal Resources (“Division”) on January 11, 2017. According to the Notice, the Division is considering a proposal (“Proposal”) “to expand the current aquifer exemption designation for the Lombardi and Aurignac Sands of the Monterey Formation to the geologic limits of each unit in and around the San Ardo and McCool Ranch Oil Fields located about 2 miles southeast of the town of San Ardo, CA along Highway 101 at Alvarado Rd.” If the Division and other regulatory agencies approve the Proposal, the resulting exemption “would allow the State, in compliance with the federal Safe Drinking Water Act, to approve Class II injection into the identified area for enhanced oil recovery or for injection disposal of fluids associated with oil and gas production.”

The federal Safe Drinking Water Act and state law require the protection of underground sources of drinking water. Underground sources of drinking water are defined broadly in federal regulations to include any aquifer that supplies or contains a sufficient quantity of groundwater to supply a public water system and that has a total dissolved solids composition of less than 10,000 mg/l. (40 C.F.R. § 144.3). As the Division’s Statement of Basis concludes, the area subject to the Proposal meets this definition of an underground source of drinking water that is required to protection.

If certain criteria are met, underground sources of drinking water may be exempted from protection such that Class II injection into the underground source may be permitted. Among other criteria, the underground source must not currently serve as a source of drinking water or cannot now and will not in the future serve as a source of drinking water for specified reasons. (40 C.F.R. § 146.4). In addition, injection into the source must not affect the quality of water that is, or may reasonably be, used for any beneficial use. (Public Resources Code § 3131.)

The County requests that the Division carefully consider whether the Proposal satisfies the requirements for an exemption and whether this is an appropriate instance in which the Division should use its discretion to permit the disposal of fluids associated with oil and gas production into this particular underground source. Citizens of Monterey County have long expressed concern about the public health and safety issues associated with the injection of fluids into the County’s groundwater. In November of 2016, the voters in Monterey County approved Measure Z, an initiative that amends the County’s General Plan and related land use documents to create land use prohibitions associated with oil and gas land uses. Measure Z contains several findings that address the relationship between Class II injections and groundwater quality in the County, including, but not limited to, impacts to beneficial uses. These findings suggest that the criteria for an exemption from the federal Safe Drinking Water Act’s protection of this underground source of drinking water may not be warranted. The Division should carefully consider these findings as part of its assessment of the Proposal.

On behalf of its residents, the County is concerned that the Proposal may negatively impact public health and safety as expressed in Measure Z. The County believes that the Division should not approve the Proposal unless it can demonstrate to the residents of the County that these public health and safety impacts, including impacts to beneficial uses, will not occur.

{ 9 comments }

UPDATE: SORRY THIS DIDN’T GET POSTED EARLIER. MEETING WENT AS EXPECTED. SUPES APPROVED RANCHO CANADA PROJECT 4-0 WHILE SUPERVISOR PARKER WAS BUSY. THEY GAVE COUNTY COUNSEL CHARLES MCKEE AN EXTRA TWO YEARS ON HIS CONTRACT, MEANING IT WILL COST TAXPAYERS MORE IF THE NEW BOARD MAJORITY DECIDES TO GO A DIFFERENT DIRECTION WITH LEGAL COUNSEL. AND THE BOARD ALSO APPROVED THE MAKEUP OF A NEW SALINAS VALLEY GROUNDWATER COMMISSION HEAVILY DOMINATED BY FARMERS.

COUNTY COUNSEL COULD GET  EARLY CHRISTMAS GIFT

If you’re any kind of student of government – and many Partisan readers are – you should find Tuesday’s meeting of the Monterey County Board of Supervisors to be loaded with fascinating little subplots. It will be the last meeting for longtime supervisors Dave Potter and Fernando Armenta.

The big agenda item is the planned approval of the long-debated Rancho Canada development at the mouth of Carmel Valley, which Potter has helped keep alive for most of his two decades on the board. With Potter politically indebted to project proponents Tony Lombardo and Alan Williams, with Armenta a proud supporter of every development proposal ever placed before him and with Supervisor John Phillips clearly on board, this one appears to be a lock.

Also interesting but well below the radar, the supes are scheduled as part of their consent calendar to grant County Counsel Charles McKee another four-year contract extension even though he got a four-year contract extension just two years ago.

Here’s what that means. The current board, including lame ducks Potter and Armenta, are hoping to lock the new board, featuring newcomers Mary Adams and Luis Alejo, into four more years of McKee whether they want him or not. Yes, the new board would be able to send him off to another county somewhere but only if the county paid for the full four years or was able to fire him for demonstrably poor performance.

Armenta

McKee is a key figure in county government, helping to provide the supervisors with political and administrative strategies above and beyond his work as the county’s chief lawyer. He is considered an able lawyer but critics of the county’s role in the long-running desalination saga say McKee’s advice created huge legal bills for the county and prolonged the region’s search for solutions to its water problems.

The departure of Potter and Armenta creates real potential for a power shift on the board and the end of smooth sailing for even the most ill-considered development proposals. McKee clearly is astute enough to tailor his advice to new thinking at the board level, but the decision about the length of his tenure should be up to the new board, not the old one.

Potter

Also Tuesday, the board is scheduled to be lobbied on an important legal matter – whether the county will step up and defend the successful Measure Z anti-fracking referendum, and it is scheduled to give its stamp of approval to the farmer-heavy makeup of the new agency that will oversee the Salinas Valley groundwater supply.

California’s counties are under a new state mandate to create local agencies charged with monitoring and sustaining groundwater for the first time in state history, and each county is taking a different approach. Under bylaws written by McKee’s office, Monterey County plans to create the Salinas Valley Groundwater Sustainability agency with one person representing the environmental community and four members appointed by agricultural interests. The bylaws don’t give any particular weight to expertise.

What gets approved Thursday, and what gets postponed, would be considerably more significant than the ceremony honoring the outgoing supes for their service.

{ 18 comments }

All was not lost on election day, at least not locally

edit_14232393_1166055086801312_6162782396031943489_nOn the way home from therapy on Wednesday, I stopped along the highway to pick up an election souvenir, a green-and-white YES ON Z sign. It now rests next to my computer as a reminder that all is not lost, that sometimes the good guys win.

I’m sure I will look at the sign often while reading about the latest groaner from the Trump administration. I am hoping that it will ease my despair and keep me focused on the positive and the local.

While the national election was an unmitigated disaster, it was a mixed bag locally. You had to look closely for the positives, but they were there.

Measure Z, of course, wins first prize for greatest success in the face of overwhelming money. It was the anti-fracking measure and you know all about it so I’ll spare you the normal details except for how the oil industry spent at least $5.5 million to fight it. (I’m hoping our friends at KSBW and elsewhere in electronic media spend their campaign advertising fortune wisely.)

Co-conspirator Larry Parsons and I made the rounds of election parties Tuesday night. We tried to stop by the Measure Z party in Salinas but a goodly share of the Measure Z camp is, well, it’s older now and the lights were off before 10 p.m.

We did stop by the Yes on Y affair. Medical marijuana, another ballot winner. I thought for a minute we had made a wrong turn and had ended up at a Pebble Beach Food & Wine after-party. There were lots of very pretty people, young and well dressed. I didn’t recognize anyone.

Monterey City Councilwoman Libby Downey’s party nearby was a quieter affair filled with older folks in comfortable clothes. Libby was just as gracious in defeat as she always is, saying that if Dan Albert Jr. had to knock one of the progressives off the council, which he did, it was better that it wasn’t Alan Haffa. For Downey, being on the council has meant also being on the mayors water authority and the boards of TAMC and the transit authority and the sewer board, etc., etc. It has meant almost daily meetings and lots of work. She deserves a standing ovation as she steps aside.

The Seaside results can be interpreted in different ways. I see it as a victory for common sense because even though Ralph Rubio will stick around as mayor, the fact that he didn’t receive an outright majority tells me that the people of Seaside aren’t so keen on the Monterey Downs project. Kay Cline came in a close second on a platform led by her opposition to the racetrack/housing venture. Give her the votes of the other two candidates and she would have won.

Cline’s party at the Press Club was upbeat even though no one in the room was enjoying the national election coverage on the bank of TVs.

Supporting my Seaside thoughts was the defeat of Councilman Ian Oglesby, who once was a promising newcomer but who fell into the trap of doing what Ralph wanted him to do. He will be replaced by Kayla Jones, a rising star with a progressive view of Seaside’s needs. Dave Pacheco was re-elected, a good thing because every council needs someone who is only looking out for the people.

Seaside was the setting for Sen. Bill Monning’s intimate victory party, populated mostly by campaign workers and elected officials such as Jane Parker and Mary Adams. Mel Mason was there, looking well. The Monning affair was at DeMarco’s Pizza, my go-to place for pizza. Monning and Haffa are also regulars there and you should be, too.  (This is what they call a plug. DeMarco’s is on Broadway (Obama Way) across the street from Goodwill.)

In Salinas, the big news was that odd-man-out Councilman Jose Castaneda is all the way out, finishing fourth in a four-way race for his seat. All went as expected in Pacific Grove. Nothing new there. Same with Marina, though it was gratifying to see Kevin Saunders fall flat, especially after he lobbed some anti-Semitic nonsense at Weekly editor Sara Rubin. Go off somewhere and torch one, Kevin, and leave the rest of us alone.

The Hartnell bond was approved and the transportation tax may have been approved. It needs two-thirds approval and had almost exactly that as of last count but there are thousands more ballots to count before we rest.

Could have been worse. Not nearly good enough to salve the sting of the Trump victory but good enough to keep some good people in the game for a few more cycles.

Congratulations to the Measure Z camp, especially Jeanne Turner, who did a remarkable job of organizing the petition drive and keeping her colleagues focused.

{ 26 comments }

Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.EXEMPTION PROCESS IGNORED, SAYS D.C. ENVIRO GROUP

A new report by an East Coast environmental study group concludes that the California agency responsible for monitoring oil production has routinely overlooked serious wastewater injection issues in the oil fields of Monterey and Fresno counties.

The Environmental Action Center, based in Washington, D.C., says its yearlong study found that the state Department of Conservation, Division of Oil, Gas, and Geothermal Resources (DOGGR), has ignored the industry practice of injecting too much wastewater under too much pressure into underground rock formations, which can cause contaminated wastewater to migrate toward underground sources of drinking water. See the study here.

While it cites no examples of contaminated drinking or irrigation water, the center has petitioned the DOGGR to better enforce existing regulations and to reject pending requests for exemptions that would allow dangerous practices to continue, particularly in the Lombardi and Aurignac sands in Monterey County.

The study was performed by David Reed and Hannah Fish of the EAC, a non-profit group that focuses on water pollution issues nationally. Based on the cited source materials, it appears that much of their work consisted of a review of state and federal regulatory records pertaining to the Central California oil fields. Monterey County’s production is centered in San Ardo while Fresno County’s industry is mostly in the Coalinga area.

It was not immediately clear whether the report’s release last week was timed to influence the fate of Measure Z, the Nov. 8 ballot measure that would ban fracking in Monterey County and force the oil industry to adopt more sophisticated methods of treating the wastewater that results from their steam-injection process.

The wastewater issue has become a focus of the Measure Z campaign. While the initial thrust of the ballot measure is to ban fracking in Monterey County, the oil industry’s opposition campaign correctly argues that there has been no fracking here but that the measure would impose costly new regulations on an industry that is already heavily regulated. The EAC study questions the adequacy of the existing regulations.

The report’s executive summary says, “When operators inject too much wastewater, at pressures that exceed the pressures in the injection zone, vertical fractures can form in the rock formations, which results in contaminated oil and gas wastewater migrating out of the injection zone. If allowed to migrate far enough upwards, the wastewater could potentially reach more shallow underground sources of drinking water.

“In injection zones such as the Lombardi and Aurignac sands in Monterey County, which are now being considered for an aquifer exemption, overpressure problems have existed since the beginning of oil and gas wastewater disposal in the area – at least since the 1980’s.”

The report says the state agency has routinely overlooked wastewater issues in violation of state and federal rules.

“There are many significant environmental impacts resulting from oil and gas exploration and production, however, one of the most significant is the disposal of wastewater produced during oil and gas operations. Oil and gas operations use millions of gallons of water each year, and industry operators are faced with decisions regarding how to dispose of that wastewater.

“One of the most economical methods of oil and gas wastewater disposal – injecting the wastewater back into underground injection wells – is also one of the most problematic. In theory, oil and gas operators inject the wastewater into underground rock formations, known by their characteristics as suitable ‘geologic zones.’ Different geologic zones are suited for wastewater disposal based on their depth, permeability, and confinement characteristics. Additionally, geologic zones used for wastewater disposal in theory are not considered as being potential sources of drinking water, because of chemical characteristics of the water already present in the formation.”

The Monterey County oil producers say their wastewater is injected to underground basins that are harmlessly separated from potable water by impermeable rock layers.

The report continues, “An aquifer, or an underground source of drinking water, needs to be exempted by the United States Environmental Protection Agency or equivalent state agency to be used as a geologic zone for underground wastewater disposal. Generally, deep underground aquifers are not suitable for drinking water, while more shallow aquifers are.” The Monterey County and Fresno County operations have not been granted the proper exemptions and, therefore, are operating illegally, the report contends.

“DOGGR must enforce existing legal requirements that apply to well operators. DOGGR must also use reasoned discretion and shut down injection projects where appropriate.”

The report says the DOGGR is currently in the process of reviewing and updating its guidelines for disposal wells pursuant to state legislation and a federally mandated overhaul of its permitting program.

“Historically, DOGGR failed to require oil and gas operators to perform the legally required geologic, hydrologic and engineering studies prior to approving wastewater disposal,” the report says, noting that the process of reviewing approximately 255 drilling sites in its coastal district would be a dauntingly time-consuming task.

One of the issues oil producers must address is the amount of pressure used to pump wastewater back into the ground. Many of the Central California wells, particularly in Monterey County’s San Ardo field, have been flagged by the state agency for “unacceptably high hydrostatic pressure.”

{ 13 comments }

Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.Update: The Monterey County Weekly has now included a mention of the following article in Monday’s online version of Squid Fry. This is good.

Update No. 2: KSBW on Tuesday interviewed Assessor Steve Vagnini and reported his finding that the oil industry’s tax bill this year would be about $5 million and would range in upcoming years between $2 million and $5 million, so the Partisan takes back the jab it sent in TV’s direction. 

SUBTRACT $3 MILLION FROM $8 MILLION AND WHAT DO YOU GET? NOTHING

It takes some effort to get me riled up these days. I used to be rather easily irritated but I’m older and calmer now. I get more sleep. But the local press corps has managed to push my buttons, simply by ignoring me.

It isn’t a big deal, except that it kind of is. In a Partisan post a week ago, I wrote about how the oil industry keeps advertising about how Measure Z, the anti-fracking measure on the November ballot, will shut down the oil industry and wipe out $8 million in annual property taxes to various Monterey County government agencies.

However, I dutifully reported, it turns out the low price of oil these days means that the industry’s property tax bill this year is actually less than $5 million, according to Monterey County Assessor Steve Vagnini, whose office is in charge of determining that amount. It will go up when oil prices go back up. Maybe next year. Maybe later.

Now Vagnini’s “south of $5 million” pronouncement is not some assertion, some exaggeration by the environmentalist types who created Measure Z. This is from the office that actually sets the figures. It’s based on real numbers, not anyone’s speculation.

The truth is that Measure Z will not rise or fall on the amount of property taxes potentially at stake. Backers of the measure will tell you that the tax issue is nothing but a scare tactic anyway because passage of the measure won’t put anyone out of business.

Even so, I was kind of proud of my little scoop. I lean in favor Measure Z largely because I don’t trust the oil industry. Its outdated claim about paying $8 million a year in property taxes helps illustrate why.

But, unfortunately for voters and other truth seekers, my little scoop has been ignored by the titans of the local press corps. Even though I emailed it to them the same day I posted it on this blog. Even though several other practitioners of the journalistic arts subscribe to the Partisan and some probably look at it from time to time. Out of pity if nothing else.

I didn’t expect my scooplet to make it onto anyone’s front page but I did kinda hope it would be deemed worthy of a mention in the next Squid Fry column in the Weekly. Some fairly thin material makes it there some weeks. But no.

I also figured the Herald would mention it the next time it wrote about the measure in a big way. But no. Sunday’s paper contained an otherwise well done Page 1 story about the pros and cons of Measure Z but it simply repeated the $8 million figure, attributed to an out of date report from the Auditor’s Office, without mentioning the fresh report from  the assessor. Same thing with the paper’s anti-Z editorial.

I held out less hope for the electronic media. I was pretty sure they would just skip along collecting all that money for the oil industry commercials repeating the fib about the $8 million tax bill and wouldn’t set the record straight unless and until there was money to be made.

Where I come from, things like this matter, but I guess I’m just old and in the way now. And, well, what’s $3 million anyway? Heck, the oil industry executives have spent considerably more than that just on those helpful commercials. And they’ll probably plow the tax savings right back into the community. Right?

{ 15 comments }

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.”

{ 24 comments }

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.

{ 22 comments }

JEANNE TURNER: Why Measure Z is good for Monterey County

Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.Since our governor accepts large contributions from Big Oil, he is not going to support a ban on fracking in California, as Gov. Andrew Cuomo did for New York. So the group known as Protect Monterey County helped write the Measure Z initiative, on Monterey County’s Nov. 8 ballot, which is meant to accomplish that goal.

Despite the unanimous recommendation of the Monterey County Planning Commission, the Board of Supervisors, by a 3-2 margin, voted not to place a moratorium on fracking in the county. That left us no alternative but to create the initiative. All statements made in the initiative had to be supported by documented research before the attorneys would include them in the initiative’s language. The main reason our coalition put Measure Z on the ballot is because of the horrific water contamination taking place.

The oil production in San Ardo is done by steam injection or flooding. The steam is put down one well to loosen the viscous oil in the tar sands, and then both the oil and water are brought up through what is called a production well. What is produced along with the liquified oil is wastewater — water that went down there to liquify it the oil. It is contaminated by the chemicals in the oil and by arsenic and lead naturally occurring in the soil.

One-third of this 13.8 million gallons of water used daily is cleaned by reverse osmosis, but two-thirds of it is put into wastewater injection wells that go down into “protected” aquifers. For decades, oil companies have operated in the county with little oversight or environmental review despite the industry’s advertised claims of stringent regulation.

For example, local oil operators have been disposing of their wastewater using injection wells for many years, in violation of the U.S. Safe Drinking Water Act. In fall 2015, the Central Coast Regional Water Quality Control Board notified six oil companies — Chevron and Aera the two largest — that 35 out of their 44 wells are illegally injecting wastewater into protected aquifers near the Salinas River. Letters were sent giving owners of these wells until February 2017 to cease use of these wells, or get exemptions from the Department of Gas and Geothermal Resources (DOGGR) — a regulatory agency that generally caves in and grants exemptions so the practice of water contamination continues. That’s why we have to stop this, and our only remaining alternative is to use the initiative process.

John Steinbeck wrote of the Salinas River being an “upside down river,” not because it flows north but because there is far more water hidden as groundwater than can be seen in the river itself. It is all the same water, fed by the underground aquifers.

It is not a matter of if but when the Salinas River groundwater will become irreversibly contaminated. As the river flows north from San Ardo it impacts agriculture and tourism, Monterey County’s top two industries, ultimately flowing out into the Monterey Bay National Marine Sanctuary where there are myriad species of sea life.

Despite all the hype in the No on Z television ads, the oil extraction companies pay only 1 percent or less of the property tax collected in Monterey County. There are fewer than 200 workers in the oil fields, most of whom are brought in from outside the area by contractors. The crude oil is put on trains that go down to L.A., where it goes out on the open market. It does not make Monterey County energy independent.

What you are hearing and seeing are scare tactics from an industry that has enjoyed the freedom to do pretty much as it wished, thanks to the Halliburton Act. Can the rest of us put dirty water into clean aquifers? No, the water we use goes through sewage treatment. Every other industry is required to clean its wastewater.

The industry will have to clean up all its contaminated water (not just the 30 percent that they clean now). Even with water cleanup, profits will remain in the billions.

Does our initiative shut down oil operations in San Ardo? No. They are allowed to continue using the over 1,500 wells in existence. No jobs will be lost because the oil companies are not serious about shutting down if Measure Z passes. The 1 percent of the county’s property tax that they pay will still be there. In fact, cleaning all their contaminated water (not just 30 percent of it, as they do now) would provide new jobs. So passing Measure Z will actually result in a net increase in jobs.

Those interested in the Yes on Z campaign can contact me or go to protectmontereycounty.org/. We now have two headquarters — one at 1340 Munras Ave., Suite 308, Monterey, and the other at 521 S. Main St., Salinas. Both are open 3 to 7:30 p.m. weekdays and 9 to 11 a.m. and 3 to 7:30 p.m. on weekends; 831-272-2084.

Jeanne Turner lives in Monterey. This piece originally appeared in the Monterey Herald.

{ 22 comments }

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.

{ 20 comments }

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.

{ 26 comments }

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.

{ 13 comments }

Aged Oil Pump on Colorado Prairie with Mountain Hills in the Background. Oil Industry Theme.A study commissioned by the Measure Z forces concludes that the oil industry exaggerates the economic benefits of oil and gas production in Monterey County and underestimates or ignores its downsides.

The new study, by Jannette M. Barth of the Pepacton Institute, is in response to an industry report from June that itself was a response to Measure Z, the anti-fracking initiative on Monterey County’s November ballot.

Measure Z was created by a group calling itself Protect Monterey County. In a news release, PMC said the earlier study ignores the cost of potential contamination of crops and soil from various oil drilling activities including the injection of wastewater into aquifers.

PMC said the industry study also:

— It misrepresents Measure Z as a ban on oil production in Monterey County, when the initiative, in fact, bans only new oil operations.

— Exaggerates the importance of the petroleum industry to the Monterey County economy. The U.S. Census County Business Patterns database shows less than 300 petroleum production jobs in Monterey County. In contrast, agriculture supports more than 76,000 jobs in the county.

— Fails to  address the likely negative impact of oil production on property values.

Barth is an economist and managing director of the Pepacton Institute. She holds a doctorate in economics from the University of Maryland and formerly was chief economist for the New York Metropolitan Transportation Authority.

A PMC spokesman, Robert Frischmuth, said the oil industry report was “a PR hit piece against Measure Z, not abalanced look at the economic pros and cons.”

Measure Z was placed on the Nov. 8 ballot following a successful  volunteer petition campaign by the nonprofit Protect Monterey County. The measure would ban fracking and prohibit the current practice of injecting toxic wastewater into the Salinas Valley aquifer, which is in violation of the Safe Drinking Water Act. It would prevent drilling new oil wells, while allowing reworking of existing wells. The industry argues that the measure is intended to destroy the oil and gas industry locally.

The new report is available here.

{ 29 comments }

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.”

{ 29 comments }
san-ardo-1

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

{ 29 comments }

Oil and gas well profiled on sunset skyMEASURE Z SUPPORTS EXISTING OIL INDUSTRY JOBS

I’m Ed Mitchell, a long-time resident of Prunedale. About eight years ago, I spoke up when the first permit for fracking came before the Board of Supervisors. Since then, I’ve worked with organizations from Aromas to Jolon to protect Monterey County’s water from being harmed by the negative impacts of fracking.

That effort has included co-founding the organization that put forward the Protect Our Water— Ban Fracking initiative that will appear on the Nov. 8 ballot as Measure Z. Having recently seen and heard misleading comments about the initiative, I want to share my knowledge about the initiative’s purpose versus the high-risk contract that the fracking industry wants the public to accept. Given that I have worked on the fracking issue steadily for eight years and helped draft the initiative, I believe my comments might be informative to readers of the Monterey Bay Partisan.

The initiative to ban fracking is about protecting our water — not about oil.

It’s about preventing toxic fracking fluids from being injected and stored in local water basins, forever threatening generations to come.

It’s about allowing traditional oil jobs to continue — while protecting the economic well-being of this county’s ag, real estate and hospitality jobs from an extremely polluting and new extraction technology.

The initiative is supported by tens of thousand of voters in all parts of the county.

Please consider the following risk observations, scientific findings,and facts about local fracking:

Risk Observation 1: Fracking along the Salinas River and injecting contaminated fracking fluids into the water basin in the most seismically active oil field in America is a formula for economic disaster for the Salad Bowl of America if pollution leaks into the single source of water for the Valley.

FACT #1: Last March, the L.A. times highlighted this risk by reporting on the USGS earthquake studies in Oklahoma. From 2009 to 2015, earthquake activity directly correlated to fracking injection activity spiked from a century-long average of three magnitude 3 earthquakes to 809 quakes of magnitudes 3 to 5. Monterey County now has an average of one magnitude 6.0 or higher earthquake every 23 years. Parkfield is recognized as one of the world’s most highly seismic areas, and the major San Andreas fault runs through the county.

Fact #2: In March 2016, a scientific report verified our water can be polluted in another way. A study by scientists from Stanford University2, published in Environmental Science & Technology, found that 10 years of fracking operations near Pavillion, Wyo., “have had clear impact to underground sources of drinking water” and “other states which have shallow fracking operations, such as California… could also have contaminated water.” Is that what we want to happen to our ground water?

Risk Observation 2: The Salad Bowl of America is a national strategic asset, equal in importance to any oil field in the U.S.

Fact #3 Yet, representatives of the fracking industry talk about 732 oil jobs without recognizing risks to other industries, while wanting this type of contract: They want unlimited use of local water. They want to pump millions of gallons of contaminated water back into the water basin. And they want to shift ALL of the long-term risks to local residents. Based upon my extensive government contracting experience, that’s an incredibly unfair contract for the public. The frackers get all the profits while the public gets all the risks.

Fact #4 In June 2012, seismic thumper trucks showed up around Aromas in North County to determine the feasibility of fracking. Seeking fracking permits and conducting seismic surveys prove oil companies are actively seeking to frack in Monterey. And if allowed, fracking will stretch from South County to North County.

Fact #5 In 2014, the State Groundwater Sustainability Act was approved requiring the county to recharge local overdrafted water basins. Yet the fracking industry wants unlimited use of water from the Salinas Valley while agriculture and residents continually conserve water and many pay higher prices for water. That’s not fair— but the fracking industry doesn’t care.

Fact #6 Representatives of the fracking industry claim in that oil companies in California are subject to the strictest regulations in America. However, the quality of protection the regulations provide is only as good as the integrity of those who comply and the integrity of those who enforce. For example on Nov. 14, 2014, NBC presented its investigative report Waste Water from Oil Fracking Injected into Clean Aquifers3 revealing that the DOGGR, California’s watchdog agency over fracking operations, failed to stop fracking companies from injecting contaminated fracking water into federally protected potable water aquifers. Thirty-four such wells are in Monterey County. That’s not compliance or enforcement — and the fracking industry knows it.

Operating oil well profiled on dramatic cloudy sky

Fact #7 The Protect Our Water initiative submitted to the Registrar of Voters specifically allows current oil operations to continue4. I know that because I drafted the early versions of the initiative, and with others ensured wording was inserted so San Ardo jobs were protected. I quote from page 1:

“Section 1 Paragraph B: “This Initiative does not prohibit oil and gas operations … from using existing oil and gas wells in the County, which number over 1,500 at the time this Initiative was submitted….” To further ensure the type of work that has gone on for decades would be allowed to continue, we inserted into Section 2 the definition of current operations that are allowed to continue, including: “steam flooding, water flooding, or cyclic steaming, routine well cleanout work, routine well maintenance, routine removal of formation damage due to drilling, bottom hole pressure surveys, or routine activities that do not affect the integrity of the well or the formation.” Any claim by frackers that cyclic steam injection is not allowed is deception.

Additionally, the fracking industry misrepresents that 732 oil field jobs will be lost if a fracking ban is passed … while avoiding discussing the risk to 100,000 ag, real estate and hospitality jobs by installing fracking oil wells near or on farms or storing toxic fracking fluids in the local water basin near our irrigation water. Their 732 jobs are more important than tens of thousands of jobs in other industries in the Salinas Valley? That’s incredibly one sided. But the frackers don’t care.

If you care about local impacts, and if you care that a large earthquake could easily cause toxic fracking fluids to leak into our irrigation and drinking water; and if you care as much about the 100,000 non-oil jobs as you do aobut the 732 CONTINUING jobs in San Ardo, and if you do care about protecting your children’s future, then VOTE YES on measure Z to Ban Fracking in Monterey County. Z for Zero fracking, Zero jobs lost, and Zero impact to our water.

To read the initiative please go to:   www.protectmontereycounty.org

Substantiating sources:

1   L.A. Times, Mar 02, 2016, Yardley: Oklahoma takes action on fracking-related earthquakes — but too late, critics say http://www.latimes.com/nation/la-na-sej-oklahoma-quakes-fracking-20160302-story.html

2   Stanford University, March 29, 2016 Impact to Underground Sources of Drinking Water and Domestic Wells from Production Well Stimulation and Completion Practices in the Pavillion, Wyoming, Field http://news.stanford.edu/2016/03/29/pavillion-fracking-water-032916/

3 NBC TV … Nov 14, 2014: Waste Water from Oil Fracking Injected into Clean Aquifers http://www.nbcbayarea.com/investigations/Waste-Water-from-Oil-Fracking-Injected-into-Clean-Aquifers-282733051.html

4   March 2016, Monterey County PMC Initiative:Protect Our Water: Ban Fracking and Limit Risky Oil Operations Initiative http://www.protectmontereycounty.org/the_initiative

{ 42 comments }