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Posts Tagged ‘Santa Ynez Unit’

Almost 40 years ago, four large oil and gas platforms were installed in the beautiful offshore area that was part of our Santa Maria District (Pacific Region of the Minerals Management Service). Those platforms are now within the boundaries of the Chumash Heritage National Marine Sanctuary (see map above).

We watched those platforms being installed, inspected the drilling and production operations, and performed a myriad of other duties including the curtailment of offshore operations prior to launches from Vandenberg AFB. Those Vandenberg launches weren’t always perfect as this link clearly demonstrates. Even knowing that, it was still a bit unnerving when missiles were recovered during post-abandonment site clearance trawls.

All four of those Santa Maria District platforms are now on terminated OCS leases. All were installed by companies that are now part of Chevron Corp. (Chevron, Texaco, and Unocal). They are currently maintained by Freeport-McMoRan Oil & Gas, with Chevron retaining financial responsibility for decommissioning.

PlatformInstall yr.installed bywater depth (ft)Est. removal weight (short tons)wells drilled
Harvest1985Texaco67535,15019
Hermosa1985Chevron60330,86813
Hidalgo1986Chevron43023,38414
Irene1985Unocal2428,76226

BSEE reports that the 46 wells on Harvest, Hermosa, and Hidalgo have been plugged and tested, and that the well conductors have been removed. No information has been posted on the status of the wells at Platform Irene, but presumably they are (or will soon be) plugged in accordance with BSEE regulations.

Will the inclusion of these platforms in the Chumash Marine Sanctuary further complicate the already difficult decommissioning process? Decommissioning specialist John Smith thinks it may:

In addition to the BOEM and BSEE approval process, Chevron and FMC are going to be dealing with the NOAA permitting regime for Sanctuaries.  Those permitting and environmental compliance requirements are extensive.  NOAA’s NEPA documentation for West Coast marine sanctuaries will also need to be amended to include the Chumash.”

So the “Mission Impossible” that is California OCS decommissioning now has yet another complex regulatory element.

John also thinks the Sanctuary designation presents yet another obstacle for Sable’s plans to restart Santa Ynez Unit production:

“Even though most of the SYU facilities are outside the Sanctuary, the proximity of the operations to the Sanctuary is problematic. The Chumash are now going to be a co-manager of the Sanctuary, adding another player in the process.   Sable is going to obtain multiple Federal, State and local permits to restart SYU, and law suits are likely at every stage of the process.” 

BOE will be watching!

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The California Coastal Commission, which exercises enormous power and limited restraint, is making headlines for preventing SpaceX, arguably America’s most extraordinary company, from increasing the number of satellite launches from the Vandenberg Space Force Base, a Federal facility. The Coastal Commission made this decision just 3 days before SpaceX’s awe inspiring rocket booster catch in Texas:

Sable Offshore, despite being spawned by super-major Exxon, is a relative minnow compared to SpaceX, at least politically. The restart of production from Sable’s Santa Ynez Unit is facing another obstacle now that the Coastal Commission has entered the fray.

The Coastal Commission has ordered Sable to stop the installation of pipeline shutdown valves that are not only prudent, but required by the California Fire Marshall, the State’s safety authority for pipelines. The Commission has intervened by asserting that the pipeline upgrades require a coastal development permit.

Sable argues that repair and maintenance activities are exempt from Coastal Act permitting requirements, and have been conducted under their existing permits for 35+ years.

The Commission does not like to see its authority questioned, and is influenced by groups whose sole objective is to prevent the restart of production. We’ll see how this sorts out.

Center for Biological Diversity photo of pipeline repair work as published by Noozhawk

Meanwhile, Elon Musk did not hold back after the Commission’s decision not to allow an increase in the number of launches from Vandenberg:

“The California Coastal Commission should be dissolved as an organization.  An utterly insufferable and misanthropic group of Karens if there ever was one! Their idea of the perfect coastline is one where there are zero humans or even signs of human! Anyone who has had any dealings with them will attest to this.  They should not exist.”

Ouch! Tell us what you really think Elon! 😉

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As previously posted, Santa Barbara County reached an agreement with current SYU operator Sable Offshore that will allow the installation of pipeline shutdown valves. Given that the valves are required by the State Fire Marshall, the County was not likely to win this dispute. The County wisely decided that the financial risks were too high:

If we continued to fight this out in court, [Sable] likely would have sought to recover lost revenue from the pipeline not being in operation,” said Supervisor Steve Lavagnino. “That could amount to millions of dollars the County would be on the hook for.”

The Environmental Defense Center and others are calling for the County to retract their agreement with Sable and hold a public hearing on the matter. That appears to be unlikely.

Remaining hurdles for Sable include approval by the State Fire Marshall after the valves are installed and operational, State Lands Commission approval of lease assignments from Exxon to Sable, and approval of the oil spill contingency plan by the State Dept. of Fish and Wildlife.

Sable believes they can resume production this year. That seems unlikely, but a 2025 restart is now a distinct possibility.

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Sable’s stock price soared after the company reached an agreement with Santa Barbara County that will allow them to comply with the California Fire Marshall’s requirement to install shutdown valves on the onshore pipeline that failed in 2015. That pipeline is necessary to transport production from the Santa Ynez Unit, which is currently operated by Sable.

The significance of a resumption of SYU production is illustrated in the chart below. The 3 SYU platforms accounted for more than 2/3 of Pacific OCS production before the Refugio pipeline spill in June 2015.

This agreement with the County is a major step forward, but there are still regulatory and legal hurdles to clear before production resumes.

In the SEC filing that announces the agreement with Santa Barbara County, Sable affirms their 2024 restart expectations. However, a resumption of production in 2024 is highly unlikely given the administrative challenges that remain. A restart in 2025 would be a major accomplishment and a very good outcome for Sable.

Pasted below is the full text of the SEC filing (emphasis added):

Santa Barbara County (the “County”), on August 30, 2024, acknowledged that the County does not have jurisdiction over Pacific Pipeline Company’s (“PPC”) installation of 16 new safety valves in the County along PPC’s Las Flores Pipeline System (the “Pipeline”) in accordance with Assembly Bill 864. The County’s acknowledgement was delivered in the form of a conditional settlement agreement dated August 30, 2024 (the “Safety Valve Settlement Agreement”) among the County, PPC and PPC’s parent company Sable Offshore Corp. (“Sable”), and a subsequent acknowledgement by the County’s planning and development staff.

The Safety Valve Settlement Agreement is predicated upon a prior settlement agreement between PPC’s predecessor in interest, Celeron Pipeline Company, and the County in a federal case styled Celeron Pipeline Company of California v. County of Santa Barbara (Case No. CV 87-02188), which was executed in 1988.

Pursuant to the Safety Valve Settlement Agreement, PPC agreed to the following additional surveillance and response enhancements in the County:

i. PPC will create a Santa Barbara County-based Surveillance and Response Team, trained in PPC’s Tactical Response Plan, which will be responsible for timely initial incident response and equipped with key resources to deploy in early containment, particularly for those regions of the Pipeline between Gaviota and Las Flores Canyon;

ii. PC will provide Santa Barbara first responders with additional training and equipment to assist in PPC’s incident response efforts; and

iii. PPC will undertake the following Pipeline system enhancements: (1) install and operate and maintain primary and secondary Operations Control Centers in Santa Barbara County, and (2) refurbish the Gaviota pump in its existing station.

PPC, Sable and the County have further agreed, in the Safety Valve Settlement Agreement, to file a stipulation to dismiss the pending lawsuit, Pacific Pipeline Company and Sable Offshore Corp. v. Santa Barbara County Planning Commission and Board of Supervisors (Case No. 2:23-cv-09218-DMG-MRW) within 15 days of final installation of all 16 underground safety valves in the County.

Sable affirms that initial restart of production from Sable’s Santa Ynez Unit is expected in fourth quarter 2024.

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Earlier this month we awarded a Chutzpah Award to groups that helped block every attempt to resume production in the Santa Ynez Unit and are now suing to terminate the leases for non-production. 

We now learn that the State Fire Marshall has rejected the resumption of production because Sable, the current operator, is not installing automatic shutdown valves on the oil pipeline. The catch is that Sable was denied permits needed to install the valves. So, on the one hand the Fire Marshall is requiring shutdown valves (a reasonable requirement), and on the other hand the County is prohibiting the installation of those valves!

According to the Fire Marshall’s office, this is the first time a company has been denied permits to install valves mandated by the State – yet another dubious distinction for the Santa Ynez Unit.

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Followers of the US OCS oil and gas program have observed some impressive chutzpah over the years, but a new law suit challenging the extension of Santa Ynez Unit leases raises the bar.

Groups that helped block every attempt to resume production in the Santa Ynez Unit are now suing to terminate the leases for non-production. Brilliant!🥇

Without these extensions, each of the leases would have expired and ExxonMobil would have been required to permanently cease its oil and gas operations, plug its wells, and decommission its other infrastructure.” See the full text of the law suit.

More posts on the Santa Ynez Unit saga.

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Sable Offshore is still planning to resume Santa Ynez Unit production by October. However, according to John Smith, production in 2024 is not a possibility. The following permitting gauntlet remains:

  • State Fire Marshal permit for onshore pipeline.
  • Santa Barbara Planning and Development permit.
  • California State Lands Commission decision on the pipeline right of ways (ROWs) in state waters. (Those ROWs had expired.)
  • Transfer of leases to Sable – Environmental groups, the California Coastal Commission and/or other parties could file suit challenging the transfer of the leases to Sable.

According to John, the question is not whether production will resume in 2024, but whether it will ever resume. And John reminds us that as of 1/1/2026, the SYU and all of the headaches revert to Exxon. See the SYU overview below:

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Exxon’s Santa Ynez Unit facilities are now owned by Sable Offshore, a company headed by offshore production veteran Jim Flores. Apparently Exxon had suffered enough, and Flores accepted the challenge. Sable hopes to restart production in July, but has some big permitting hurdles to clear before that can happen.

Flores and his company are indeed the underdogs in this story. Pending are the pipeline CBAT (coastal best available technology) plan being reviewed by the Office of the State FIre Marshall and approvals by Santa Barbara County. Administrative and legal appeals are a given.

Flores is saying the right things and seems undaunted by the massive challenge. He may just pull this off. We’ll be watching.

Sable Offshore Corp. is going to do it right!

Our proven track record of responsible operations in Santa Barbara County at Point Arguello and Point Pedernales fields over the past couple of decades reflects our commitment to safe, reliable operations at SYU.

Jim Flores to NoosHawk

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Exxon has joined Chevron in announcing Q4 write downs associated with California operations. In Exxon’s case, the estimated $2.4 billion to $2.6 billion impairment is the result of their troubled Santa Ynez unit facilities in the Santa Barbara Channel where the unit’s 500+ million barrels of reserves are unlikely to ever be produced.

The Santa Ynez saga is really quite remarkable. More here and here.

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A.S. Bull and M.S. Love

When Exxon was unable to get approval for an onshore oil processing facility, the company installed this offshore storage and treatment (OS&T) vessel and single anchor leg mooring (SALM) 3.5 miles from shore, just seaward of the State-Federal boundary. The OS&T, a converted tanker, operated from 1981 to 1994. By 1994, the onshore gas processing facility in Las Flores Canyon had been expanded to process Santa Ynez crude, eliminating the need for the OS&T. While the OS&T had a very good performance record, the highly visible vessel was less than endearing to most Santa Barbara County residents, and there was no apparent sadness when the OS&T and SALM were decommissioned in 1995.

Current Santa Ynez Unit facilities:

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