Outdated policies restrict access to our energy supplies

For most of the last 40 years, a moratorium on new drilling for oil off the California coast has placed vast energy resources off-limits for California consumers.  

During those years, we have watched California’s growing population and economy demand more energy, and foreign oil imports have increased dramatically.  

Our continuing offshore oil and natural gas production operations have experienced revolutionary improvements in technology, training and environmental protections, resulting in an exemplary record of safe performance.  

Yet these changes are routinely ignored by special interests stuck in the politics of the past and focused on a tragic offshore accident that occurred in 1969 before many Californians today were even born.  

This backward-looking posture perpetuates an outdated policy that restricts access to our state’s energy supplies, contributes to higher gasoline and diesel prices, and expands our reliance on foreign oil.

Our recent budget crisis has provided the Legislature an opportunity to take a serious look at the potential benefits of responsibly developing offshore energy resources.  

Expanded access to offshore oil reserves will produce jobs at a time when unemployment exceeds 11.5 percent statewide.  It will likely help moderate consumers’ energy costs and will create additional state and local revenues through lease and royalty payments.  

Here are some additional facts that we hope will inform an open, thoughtful debate among policy makers, opinion leaders and concerned citizens.

Last year, California refineries converted 644 million barrels of crude oil into transportation fuels and other products essential to maintaining our economy and our standard of living.  Almost half of that oil – 318 million barrels, according to the California Energy Commission (CEC) – came from foreign sources in ocean-going tankers.

For many years, California’s in-state oil production has declined.  The CEC predicts that – absent a change in the “just-say-no” energy policies – more and more imported oil will be required to meet our future energy needs.  

More imports mean higher costs of transporting the imports, which generally translate to higher prices for consumers.  More imports also create greater vulnerability to countries that are politically unstable or, worse, openly hostile to U.S. interests.  

The U.S. Minerals Management Service (MMS) estimates there are 10.5 billion barrels of oil and 2 to 3 trillion cubic feet of natural gas recoverable off the California coast.  If the petroleum industry had access to those resources, their production could reasonably replace every drop of California’s foreign oil imports (at today’s rate of imports) for more than 30 years.  This would certainly improve our energy security.  

Increased California production also would create more jobs – a great benefit in today’s climate of record unemployment.
Currently, the petroleum industry supports employment for about 370,000 hard-working Californians, providing a good living and much-needed benefits to those workers and their families.  

According to a recent analysis by the consulting firm LECG, the industry also is responsible for $183 billion in economic activity in California, generating more than $29 billion in labor income and paying between $8 billion and $10 billion in taxes to state and local governments, not including property taxes.

Existing platforms produce over 100,000 barrels of oil every day from waters off the California coast.  Those offshore operations have an excellent safety record according to the MMS, the federal agency responsible for closely monitoring the operations.

In the 40 years since the Santa Barbara accident, more than 1 billion barrels of oil have been produced and, according to the MMS, only 850 barrels of oil have been accidentally introduced into the marine environment.  

That is 850 barrels too many.  Our industry’s goal every day is zero spillage.  Our member companies consistently invest in new technologies to improve safety and expand options to develop resources from both onshore sites and utilizing existing platform infrastructure.

But let’s put the issue into perspective.  Approximately 55,000 barrels of crude oil seep from natural sources into the waters off the coast of Santa Barbara every year.  That means every week more oil seeps into the ocean than has been accidentally spilled from offshore platforms over the past 40 years.  

Advances in technology, safety procedures and environmental protection, coupled with the state’s economic crisis and ongoing need for secure, abundant energy supplies, make safe, environmentally sensitive offshore development a valuable policy option.

The public deserves an open exchange of information and honest, objective debate, not obstructionist rhetoric based more on emotion than technical and scientific realities or actual experience.  

California’s petroleum industry is ready to engage in that discussion and prepared to help our great state expand its energy supply security.