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California Lands Commission Terminates 3 Chevron Offshore Leases

The California State Lands Commission last week terminated three oil and natural gas leases held by Chevron Corp. off the coast of Santa Barbara County, a move that would put the 11,000-acre site permanently off-limits to exploration and production.

Under California law, the offshore area would become part of the state's marine sanctuary and no further oil and gas leasing and development would be allowed. California has not issued any new offshore leases since the 1969 oil spill off the Santa Barbara coast.

The commission had entered into the leases in 1963 and 1966. Twelve exploratory wells had been drilled in the leases but no oil production occurred. Commission staff had been seeking return of the leases to the state for several years, and Chevron in April had offered to surrender the leases.

"As California moves away from fossil fuels and toward cleaner, renewable energy sources, today's action by the State Lands Commission will add these leases to our coastal sanctuary and ensure they will never be exploited for oil." said commission Chair John Chiang.

Following last week's action, the commission noted that 35 leases have been quitclaimed back to the state, while 18 leases in state waters remain producing oil and gas, and nine are not producing.

The move to put the site permanently off-limits to drilling underscored Republican Gov. Arnold Schwarzenegger's rejection of calls by presumptive Republican presidential nominee John McCain and the Bush administration to lift the state's moratorium on new offshore drilling (see NGI, June 23).

Speaking last Thursday at a climate change summit hosted by Florida's Republican Gov. Charlie Crist -- who favors lifting the offshore drilling ban -- Schwarzenegger said, "anyone who tells you" that lifting the offshore drilling ban "will bring down our gas prices immediately or anytime soon is blowing smoke. America is so addicted to oil that it will take years to wean ourselves from it. Finding new ways to feed our addiction is not the answer."

McCain last Tuesday attended an environmental roundtable meeting in Santa Barbara, and some of his energy policies were rejected by participants, according to the Sacramento Bee.

Michael Feeney, executive director of the Land Trust for Santa Barbara County, told McCain that it would be unwise to "drain America's offshore oil and gas reserves as quickly as possible in the hopes of driving down the cost of gasoline" because it would take years before the resources could be extracted, the newspaper reported. "We should be saving as much as possible the oil resources of this country, because we are going to need those for a long, long time to come, and we should be mostly focusing on reducing demand and improving efficiency."

In related news the California Department of Conservation reported that drilling activity has increased about 2% from a year ago in the state's oil and gas fields, likely a reaction to higher commodity prices. However, the volume of production continues to decline, the department noted. Oil and gas output to date this year is down 2.3% to 243.2 million boe, which is the lowest level since 1941.

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