The fate of the Ellwood Onshore Facility is up in the air as the Goleta City Council pondered its future at Tuesday's meeting.
Complicating the issue is Venoco's announcement last week that it would shutter the facility and Platform Holly in 25 years if the State Lands Commission approves its Lease Line Adjustment (LLA). Under the proposal, the Carpinteria-based oil company would alter the boundaries of its current lease around Platform Holly by plugging existing wells, then drilling in other areas in the South Ellwood Oil Field.
Venoco's production has been stalled since the Refugio Oil Spill last May, which forced Platform Holly offline. Venoco relies on the now ruptured Plain All American Pipeline Line 901 to transport oil.
The current LLA proposal would not be able to move forward, until the pipeline is fixed.
"We are not doing anything right now. Hopefully we get approval. That approval process takes awhile," said Venoco CEO Mike Wracher. "When we are ready, the pipeline is ready and then we can bring our platform back online and the pipeline will be available."
Venoco officials insist the LLA proposal unrelated to the company's Chapter 11 bankruptcy which was filed in March after the company racked up 1 billion dollars in debt.
"It slowed us down. We were working on this before the restructuring. We basically had to hold everything in abeyance while we went through the restructuring and then we got going again once that restructuring was done. We've been working on this for two years," said Wracher.
The State Lands Commission, comprised of Lieutenant Governor Gavin Newsom, State Controller Betty Yee, and Financial Director Michael Cohen, will make the ultimate decision to approve or deny the proposal.
Last week, the commission released a draft Environmental Impact Report (EIR).
Linda Krop of the Environmental Defense Center opposes the LLA proposal and wants the facility shut down as soon as possible.
"The first step would be for the city of Goleta to impose a shut down date for the Ellwood Onshore Facility. We will definitely try to get the State Lands Commission to deny this drilling expansion that Venoco wants," Krop said.
The facility is a 50-year old gas and oil processing plant which Krop said was re-zoned for recreation in 1990.
"They've been living on borrowed time. They have reaped the benefits of these last 15 years or so. It's time to turn this back to the community," Krop said. "When Venoco bought Platform Holly and the plant in 1997, they already knew their days were numbered."
Krop also disagrees with Venoco's argument that if its lease is restructured, it would actually be giving back acreage to the state.
"They are not giving anything up. Let's be clear about that," Krop said."Where they want to expand into is a California sanctuary which bans any new oil and gas leasing and it's right next to a marine protected area."
Any decision on the future of the facility will remain in limbo until Venoco's Chapter 11 bankruptcy filing is settled.
But, Krop said as soon as the bankruptcy case is lifted, she will ask the city to come up with a date to shut down the facility.