Huasna Valley and California’s war on oil and gas

August 27, 2012

Alex Alexiev

OPINION By ALEX ALEXIEV

And so the San Luis Obispo County Board of Supervisors has voted unanimously to not allow drilling for oil on a private property in the Huasna Valley. While it was a given that the three environmental extremists on the board would do so, the fact that the two ostensibly conservative supervisors joined them in this egregious decision is a testimony of how deep the political malaise in this county and state has spread.

To begin with, it seems not to have bothered the supervisors that what they did was deny the ranch owners the right to exercise their lawful property rights as owners of the minerals under their property. Whether this amounts to government “takings” per the 5th Amendment is for constitutional lawyers and the courts to decide, but this kind of thing is what they do in totalitarian countries, not in the land of Washington, Jefferson and Lincoln.

Second, and just as disconcerting, is the seeming hypocrisy of the supervisors in defending this clear-cut assault on property rights. Supervisor Teixeira, in whose district Huasna is, is reported saying that “an oil field is incompatible with the rural and isolated valley.” If an oil rig is incompatible with that remote location, where few would have ever seen it, Mr. Teixeira, what exactly is it compatible with – downtown San Luis Obispo?

The bottom line is that our distinguished supervisors, aided and abetted by a far left planning department and a bunch of not-in-my-backyard local zealots, knowingly trampled property rights and legitimate business pursuits at a time when the county desperately needs economic development and tax revenue.

Unfortunately, the decision is not a surprise. Rather it is part and parcel of a war on California’s huge oil and gas resources a cabal of Luddite environmentalists and their political stooges in Sacramento have waged for four decades and are winning to the huge detriment of the economy and the well-being of the state’s citizens.

Last year’s Fraser Institute “Global Petroleum Survey” found California the most hostile to drilling state in the United States and 91st worst in the world. The results are there for everyone to see. Since the war on oil and gas began in the aftermath of the 1969 Santa Barbara oil spill, California has become increasingly dependent for its energy on imports. Thirty percent of our electricity, much of it coal-fired, is now imported, even as nearly half of our growing oil imports come from such pro-American paragons of democracy as Saudi Arabia, Russia, Venezuela and Ecuador.

The impact of energy dependence, aggravated by high taxes, renewable handouts and asinine regulations, such as the global warming scam called AB32, on the state’s economy is staggering. California electricity rates are nearly 50 percent higher than those in the the rest of the country, making our industries uncompetitive.

According to a Milken Institute Survey, California businesses pay 23 percent more to operate than those in other states, resulting, in the past ten years alone, in the loss of 34 percent of our manufacturing base. Just go ask Apple, Intel and Google, the leaders of high-tech California, where they have been building factories lately. The answer is anywhere but California. And it is getting worse. Last year 254 companies left California for other states, 26 percent more than in 2010.

Ironically, all of this is taking place while the rest of the country is experiencing an energy revolution that will make America energy independent in just a few years thanks to shale gas and oil. We’ve already passed Russia to become the number one producer of natural gas in the world and will soon eclipse both Saudi Arabia and Russia in oil production, as well, on account of shale oil.

This game-changing revolution is already having a huge economic impact in the form of natural gas prices that are several times cheaper today than even five years ago. This and the shale oil bonanza in places like the Bakken play in North Dakota, Eagle Ford in Texas, Haynesville in Louisiana etc. have resulted in an unprecedented economic boom in these and many other parts of the country, providing a graphic example of what American technological ingenuity and the free market can do if freed from Huasna-like obstructionism by government and special interests.

Alas, don’t hold your breath for the shale revolution to be welcomed to California any time soon, despite our huge unexploited resources. Few Californians know that our state sits on gigantic shale oil reserves in a geological formation called the Monterey Shale, which stretches from northern California to Orange County and includes San Luis Obispo county and adjacent offshore areas. The U.S. Energy Information Agency estimates that the Monterey Shale holds 64.4 percent of the total shale oil resources of the lower 48 states or 15.4 billion barrels.

Exploiting even part of this resource will easily balance our budget, usher in cheaper energy and give the economy a huge shot in the arm. But this requires economically rational leaders who, as Huasna shows, are in critically short supply in this, once upon a time, Golden State.

Alex Alexiev, a resident of Templeton, has over 30 years of experience in national security analysis at the Rand Corporation and various Washington D.C. think tanks. He writes for National Review and other publications and tweets on national security at twitter.com/alexieff. His most recent book, “The Wages of Extremism: Radical Islam’s Threat to the West and the Muslim World,” is available in pdf form.

 


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Bluebird

Based on the comments it doesn’t seem to me that many of you read the EIR. Excalaron didn’t pick the firm who did the EIR. It was staff. Yet the EIR found only one not very significant impact that could not be mitigated. Staff basically ignored the report. The In & Out burger owner who has a big tax” write off” ranch in the area retained his own$$$ attorney to oppose the project.

Yes, this is highy bigoted opinion piece but it does not reflect the opinions of CCN.

Babak may I suggest you write your own “opinion” piece. I’m quite sure it will be publlished.

I consider myself a strong environmentalist but I also recognize a NIMBY decision. Everyone of those people who live out there consume lots of polluting gas every day or maybe there gas doesn’t pollute/stink.

If any of you listened to the BOS not one sup gave an in depth analysis of why they denied the project. Looks like all SLO wants is grapes and wine. Ranching is a money loser.


Babak Naficy

Mr. Bird, prey tell, why do you consider yourself “a strong environmentalist”? On this evidence you are anything but. The BOS, the planning commission, the planning staff, and most of the public (except for the mineral-right holders” recognized that messy, noisy, ugly and dangerous industrial activities of the type proposed by Excellaron and their Canadian owners are incompatible with the character of Huasna Valley. This is a perfectly valid reason for denying the project. This recognition is basic, and does not require “in depth analysis,” as you suggest. You either get it, or you don’t. You, apparently, don’t.


TJH

Two observations regarding Mr. Alexiev’s editorial: 1. Please count the number of perjorative words and their proximity in his article. Without even considering his musings for factual content, the reader must question the veracity of his intent to deliver an honest review.

2. Mr. Alexiev probably should have reviewed the content of Excelaron’s proposed Conditional Use Permit. The flaws in the CUP’s plans and in their intended follow-through were confusing at best, and felonious at worst. The only reasonable assumption can be that Australian Oil and United Hunter Oil of Canada had planned to “Put one over on the bumpkins”. But the Bumpkins did read the fine print, thank God, even if Mr. Alexiev did not.


Babak Naficy

I know this it is unlikely that CCN would allow my comments to be published, but you have to wonder why CCN continues to spiral downward towards becoming an extreme right-wing mouth piece. This so-called opinion piece is a prime example. By any objective standard, the author harbors far right views. He characterizes three of our supervisors as “extremists” simply because he disagrees with their views. He refers to the planning department as “far left” and the local opponents of the Excellaron as “zealots.” The author does not bother to recall how rare it is for this planning department and this installment of the Board of Supervisors to actually deny a project. The massive solar projects approved in Carrizo were overwhelmingly opposed by local residents and environmental groups, yet were unanimously approved by the Board based on the recommendation of the planning commission.


The piece is riddled with inflammatory language intended not to foster rational dialogue, but to inflame and sensationalize. The same can be said of CCN, which may try to hide behind the boiler plate tag that it does not necessarily share the opinion of the authors it publishes, but I submit that CCN’s editorial policy and choice of stories speaks clearly to its views and standards. What exactly is CCN’s editorial policy?


rockyf

Mr. Naficy makes a very valid point that Planning very rarely recommends denial of a project. Consequently, the PC and the BOS rarely deny projects. Also, a very small percentage of project proposals even involve discretionary permit requirements. I find the argument Mr. Alexiev makes regarding the “taking” of property interesting as well. It could be argued that the “taking” of neighboring parcels (by taking away their right to quiet enjoyment) amounts to much more substantial collateral damage. Inverse condemnationneeds to work in both directions.


R.Hodin

Steve Moss used to run intentionally inflammatory pieces on national or regional issues in the NEW TIMES just to generate letters, and it worked. There are plenty of wingnut partisans out there wiling to supply ammunition. Alexiev just happens to be a local one.


kettle

Babak Naficy, write your own opinion piece and submit it.


Instead of complaining, do something.


Babak Naficy

I don’t need to write my own opinion piece in order to critique someone’s else’s inflammatory and misinformed rhetoric. Analyzing someone’s else’s opinion is “doing something.” Trying to tell people what to do, is not.


Booty JuJu

Kookoo for coco puffs.


robert a

“Last year’s Fraser Institute “Global Petroleum Survey” found California the most hostile to drilling state in the United States and 91st worst in the world. The results are there for everyone to see.”


But, this years’ survey ( a series of questions to oil industry execs) lists California as 45, up from 91 in2011 as worst place for oil investments, ahead of Alaska, New York, Kuwait, Russia, Venezuela, and Iraq.


“California electricity rates are nearly 50 percent higher than those in the the rest of the country…”


Wrong. According the electricchoice.com, in 2010 (the latest figures available) California’s overall rateof 13.83 cents per kilowatt hour is lower than NY’s 16.46. CT’s 17.47, Alaska’s 15.47 and several other states. California’a rate is not even 50% higher than the national average of 9.91 cents per KWH.


I just picked two “facts” in his rant and both are false. Well, the claim of 91 ranking in 2011 is true, but neglects to mention that it is 45 in 2012.


This guy has no credibility with me, I didn’t bother fact checking the rest, but, 0 for two isn’t bad!


R.Hodin

Alexiev’s great with manipulating numbers. Bet you dollars to donuts he helped spin the Iraq threat to help convince Powell & Rice to give their baldfaced lies to the UN. Yup, he’s got a firm grip on reality for sure.


robert a

The irony is, after the Big Lie that recovered Iraqi oil would “pay for the war”, ten years later, the oil industry execs lists Iraq as 139 out of 147 as worst places to develop oil!


Alex

Robert a claims that my facts on Calif hostility to drilling and electricity rates are wrong by using selective numbers that mean little out of context making him a perfect example of what those of us who have been in the research business for many years call quotation shysters.


On the drilling hostility, I said that the Simon Fraser Institute rated California dead last in the U.S. and 91st worst in the world. And that is exactly what they said. He claims that the 2012 survey shows a vast improvement in the ratings to 45th place. It is a cardinal rule in research not to cite statistics for a year that is not over yet, but he wouldn’t know that. To say nothing about the fact that absolutely nothing positive for the oil & gas industry in California has happened this year to warrant such a huge jump.


On electricity rates, he picks some states with high rates and argues that I’m wrong claiming that California rates (for manufacturing, which is what I was discussing) are 50% higher than those in the U.S. Evidently, he does not understand that the rest of the country does not mean individual states, but the average for the country. Here is what the definitive government statistics on the subject have to say about that. The figures are contained in the Energy Information Agency’s State Historical Tables for 2010 spreadsheet (avgprice_annuals.xls). They are the last ones available and were released in Nov. 2011. The next release (for 2011) is November 2012.


California total electric industry: industrial price 2010 (cents per kilowatthour) – 9.80; US average – 6.77. That’s approximately 50%.


So robert a, in order not to make a fool of yourself again, you should consider taking a course in remedial research citations or, better still, pick on somebody your own size.


Alex Alexiev


robert a

Nice attempt to try and bully me. Fail.


The Frazier Report was published in June, 2012 and the survery is conducted from Feb. 8, 2012 to May 2, 2012 and is for the previous year. (since the last survey) They don’t publish partial reports. Maybe you should take that course in remedial research.


We could quibble about electric rates, but you stated 50% higher “than those in the rest of the country”, Not higher than the US average. Different statement.


The California refineries biggest concern now is overcapacity. The five refineries in the Richmond area alone exported $7.8 billion in refined products in 2010. To Mexico, China, Brazil, etc. The demand in California has downward trended since 2008 (for various reasons) and they have to find a market.


I suspect one reason the proposed field in Huasna was turned down, was that the Monterey shale “play” is dominated by the majors, Exceleron is a small independent with little to no juice.


I notice you did not address the Iraq invasion oil comment, but, you’re right, I need to pick on some one bigger..


keyslammer

Alex…I don’t recall seeing you at any of the Planning Commission meetings or the meeting with the Mayor of AG. Possibly you were at the meetings near the end of the effort when this was becoming a local news story?? There were an awful lot of other folks there, so I might have missed you.


I think you’ve done a great job tossing National figures around, without understanding the local impacts…especially the costs and risks to the taxpayers in this county. The Board of Supervisors (BOS) made a sound financial decision…and they did it unanimously. Have you asked why Shell Oil, or Exxon aren’t seeking the mineral rights and drilling here? Did you know that american oil is exported to other countries? That alone should have caused you to put your laptop down and think twice about the rhetoric you “penned” in your article. Here is a link:


http://www.csmonitor.com/USA/2012/0223/As-gas-prices-rise-should-US-oil-industry-stop-exporting


Ok…so here are some of the facts surrounding THIS particular situation, without calling the BOS members extremists or bemoaning the national state of our energy policies and claiming that property rights are being trampled:


1) The foreign company (UHO) and other involved parties are a penny stock corporation…leaving little reserve for any significant clean-up efforts (ala Avila, Guadalupe spill efforts). We don’t need an ENRON like event, nor can we afford to gamble natural resources with underfunded groups like this. I can do without the Bernie Madoff’s of the petroleum industry.

2) The quality of the “tar” and what might be recovered has already been admitted to be only good for road tar and possibly polymer use…not for fuel.

3) The roads to/from the site in question are inadequate for truck transport (have you BEEN out to the site??) The cost to county tax payers for the road and embankment repairs and improvements would have been very expensive.

4) Property values all along the route to the site would have been adversely affected…affecting the “rights” of all those impacted…as well as reducing tax revenues to the county.


This was definitely a NIABY project from the financial perspective. We have many SWEET crude oil reserves that AMERICAN companies should be allowed to develop. Instead, they’ve been forced to go too far offshore and use deep water techniques that can result in catastrophes like the Deep Water Horizon. This would have simply been an admittedly much smaller scale version of the risks like those …putting a development in a bad location, at a high fire risk, with small county tax revenues, coupled with high liability and significant and proven tax revenue impacts. It is hard not to go on and on about how poorly thought out this particular plan was…and what the impacts would have been to all of the members of this county. This was a good and sound decision by the Board.


Your “out of touch” article and labeling of the BOS and community groups that have been involved in analyzing this application is particularly offensive. I suggest that you climb down off of that high horse and put a solar system on the roof of your home.


kettle

No one pays the average price for electricity and using the “average” is a smelly herring.


zaphod

herring on pancake!


easymoney

This is a typical scenario in the state of California over the last 60 years.

“Unfortunately, the decision is not a surprise. Rather it is part and parcel of a war on California’s huge oil and gas resources a cabal of Luddite environmentalists and their political stooges in Sacramento have waged for four decades and are winning to the huge detriment of the economy and the well-being of the state’s citizens.”

Why do you think the price of fuel in a state with it’s own refineries soars every year?

Why do you think there have been no new refineries or power genetrating plants built in this state in decades?


“The U.S. Energy Information Agency estimates that the Monterey Shale holds 64.4 percent of the total shale oil resources of the lower 48 states or 15.4 billion barrels.”


Want to get out from under OPEC oil control, want to keep fuel prices down especially in this state, wnat to be free from foreign control?


winedude

“Why do you think there have been no new refineries or power genetrating plants built in this state in decades?” How disengenuous can you be? There hasn’t been a refinery built ANYWHERE in the United States since 1976. This isn’t just a California issue.

On the other hand, I don’t feel sorry for the property owner at all. There is NOTHING that guarantees a profit, especially when land speculation is involved. With the history of abandoned wells in Huasna, why should the supervisors approve another project to pull ultra-low quality sludge out of the ground.?


rockyf

To say this is simply denying someone their property rights is overly simplistic and less than accurate.

Excelaron applied for a Conditional Use Permit, a discretionary action, which means it can be approved

or denied. Approval of a CUP is not a right. Link to definition of a CUP http://ceres.ca.gov/planning/cup/condition.htm When a use has a known potential to impact others, it usually requires a discretionary use

permit. We would have complete chaos without considering compatibility issues through the land-use

planning process.


NorCoMod

You’e correct, a CUP does consider compatability among other things. Just realize that compatibility in this case means not compatible with what a few select neighbors consider acceptable. Once again the provisions of CEQA are stretched to build a case for a desired goal.


For a different perspective, read the list of objecting neighbors. Several are realtors and prominent business owners who wouldn’t hesitate to develop in your back yard if it would turn them a profit.


R.Hodin

You’re saying the objections to the project are invalid because a few happen to be realtors? That’s a pretty lame argument. The project would have affected everyone’s property values in Huasna, whether they were Mankins’ “select neighbors” or not.


I just hope this sort of exercise of property-cum-mineral rights doesn’t happen underneath your precious dining room.


rockyf

This was not a NIMBY argument, it was a NIABY argument (should not be in anyone’s backyard). Poorly planned and poorly sited projects that destroy communities should not find their way into anyone’s backyard, yet they do if courageous folks like the residents of Huasna Valley do not push back. If the people who are most affected don’t finger bad project proposals, then who will? As for the realtors, are we concerned they might build a house in our neighborhood? The public doesn’t have much say regarding ministerial permits, which are the opposite of discretionary permits in that entitlement has already been established for uses that only require ministerial (over-the-counter) approval.


Jorge Estrada

I totally understand the suggestion of property rights being undermined and like dry farmer who’s yeild may not have a buyer, this too is their right. A speculative venture that is about the exchange of cash among the investors is very typical, Wall Street. Neighbors who choose to protect their rights at the expense of squelching their neighbor’s rights, minimalize the rights of all. We absolutly need to support the rights of others and thankfully in this case no one has to bare arms and die on foreign soil.


For any proposal there is a correct way with an expense that may be the final answer but to maliciously violate a lawful proposal, the unintended consequences are anyones guess.


The public has rolled the dice again, so come on snake eyes!


Pete

Jeez, fruitcake city here.

For one thing the three ‘extremists’ on the board of supes are not extreme. And ‘property rights’ as heralded by the author extends to all of us, not just those hoping for a profit. That is such a worn out old mantra of the far right and big business folks it should be banned; it reminds me of the McCarthy ‘Commie’ purge that is STILL popular with the far right (such as Rob Bryn in gushing his support for Parkinson). What about those who live nearby? Or those downwind? What about the extra pollution that will affect our kids and elderly? What about their rights?


racket

“What about their rights?”


Um … weren’t the issues you mentioned addressed in the Environmental Document?


The issue you don’t mention, and the one driving the opponents, is that they simply don’t want their neighbors to use their property in this manner.


But their NIMBistic desires are not protected by code or ordinance, so they hook on to made-up enviro concerns because that’s the hammer they’ve got.


It’s junky, cheap, and pathetic, but it happens all the time.


kelvarnson

“For one thing the three ‘extremists’ on the board of supes are not extreme.”


Really? How many of them voted for the bag ban?


“That is such a worn out old mantra of the far right and big business folks it should be banned”


Not diggin’ on the Free Speech thingy? LOL…


“What about those who live nearby? Or those downwind? What about the extra pollution that will affect our kids and elderly? What about their rights?”


Do you drive a car? How many kids do you have?


Pete

Wow, the bag ban again. The evidence seems to indicate that plastic bags end up polluting our oceans for one thing. I like plastic bags but if they do harm so be it. LA banned plastic bags too. Being against items that are bad for the environment is not extreme, it’s smart. We have gotten way too lazy in our lifestyles, wanting whatever we want despite the consequences, often to others or future generations.

I suppose in the criticism of my comments about the worn out mantras that many use to discredit and shame their opponents your argument fails for being hypocritical-do you wish to ban my speech?


kelvarnson

Note that I did not deny there is a plastic bag problem. My issue is with the knee-jerk solution; a BAN.


And.. Wish to ban your speech? Huh? No, I was pointing out that it is YOU calling for banned speech.


racket

It should be illegal to allow your bags to “escape” into the ocean or wherever they are harming.


It is nannystateism to ban bags altogether because “they” don’t think we’re responsible enough to handle them, or “they” are too lazy to police the bag-handling miscreants.


Which is O.T. for this article, but maybe I can bring it home by pointing out that the bag ban and this Huasna whoop-de-doo are both examples of “big mouths get results,” whether warranted or not.


kettle

racket says: “It is nannystateism to ban bags altogether……”


But you want a law passed if you “allow your bags to “escape””?


It is called littering, no new law needed. However that “law” did not solve the issue hence the ban.


It is just this trashy behaviour that is why we can’t have nice things in America.


racket

How far does it go, kettle?


If I am an irresponsible twit that allows my bags to escape, I am pleased you’ll take the hit for me.


Expanding your point to the absurd: Since we cannot keep drunks from driving, why not ban cars?