Judge hands petroleum industry a defeat in California oil, gas lawsuit

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Judge hands petroleum industry a defeat in California oil, gas lawsuit

By DAVID KRAVETS The Associated Press 6/22/01 7:47 PM

SAN FRANCISCO (AP) -- A federal judge ruled Friday that the ocean off the coast of central California can't be explored for new deposits of oil and gas until the federal government studies potential environmental impacts and the state approves the plan.

The decision by U.S. District Court Judge Claudia Wilken was a blow to petroleum companies watching oil and gas prices near all-time highs as California struggles through an energy crisis.

At issue is an amount of oil that could be enough to run California's refineries for two years and fuel five months' worth of the state's natural gas demands.

"I don't know what the implications are at this point," said Steven Rosenbaum, an attorney representing companies affected by the ruling, including AERA Energy LLC and Conoco Inc. He declined further comment.

Environmentalists praised the ruling, which affects some of the state's most scenic coastline in San Luis Obispo, Santa Barbara and Ventura counties north of Los Angeles.

"Californians prize their coast and additional oil development has no place here," said Bruce Hamilton, national conservation director for the Sierra Club. "It's good to know those promoting it have been set back and eventually we need permanent protection."

Offshore rigs account for roughly 20 percent of California's petroleum production. But exploring for more oil has been an explosive issue since 1969, when a massive oil spill soiled the Santa Barbara coast.

No drilling to look for new deposits has been conducted since 1989 and the last new oil platform off the California coast was built in 1994.

The case centered on 40 leases in federal waters over fields thought to contain 1 billion barrels of oil. The companies paid $1.25 billion for the leases, each covering about nine square miles of ocean.

California sued to block exploration after President Clinton's interior secretary, Bruce Babbitt, extended the leases in 1999.

The lawsuit contended that Babbitt's decision was subject to review by the state to ensure that offshore drilling in federal waters is consistent with state coastal protection plans.

Babbitt's order allowed petroleum companies to begin paperwork on their plans, but banned physical work until the U.S. Minerals Management Service completed an environmental impact study on new drilling.

Wilken, in a highly technical ruling, said the federal government illegally extended the leases.

She said the government "must provide the state of California with a determination that its grant of the lease suspensions at issue here is consistent with California's coastal management program."

Wilken ordered all leases terminated pending the impact study.

In Washington on Thursday, the House voted to delay a Bush administration effort to open part of the Gulf of Mexico to oil and gas exploration.

Florida Gov. Jeb Bush has urged the administration not to proceed with plans to extend offshore drilling to a tract that comes as close as 17 miles to Pensacola, Fla.

Proponents of leases, led by Interior Secretary Gale Norton, say the nation needs the area's oil and gas reserves to help ease the energy crunch.

Sarah Christie, legislative coordinator for the California Coastal Commission, said she feared Friday's decision could boost support for drilling in Alaska's Arctic National Wildlife Refuge, where the Bush administration wants to explore for oil.

"It's certainly not the intent ... to push offshore oil exploration into a different but equally sensitive and magnificent and valuable place on the map," she said.



-- Martin Thompson (mthom1927@aol.com), June 22, 2001


How is all this squabbling going to solve anything al all?

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