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California Gov. Again Looks Offshore for Budget Relief

Faced with a widening budget deficit that some analysts place above $20 billion in the new year, California Gov. Arnold Schwarzenegger indicated that he is revisiting a proposal to expand offshore drilling in order to generate more than $200 million of revenues. A proposal to open drilling offshore Santa Barbara County early in 2009 was rejected by the State Lands Commission.

The latest proposal from Schwarzenegger comes as part of the lame duck governor's final budget proposal in which he is proposing deep cuts in mass transportation and the need for $8 billion in federal aid for the state to avoid severely cutting social welfare programs. He is also proposing to extend a current cut in state workers' payroll that is scheduled to end this summer.

One of the few potential new revenue sources in the governor's plans is tied to the proposal to resume offshore oil/gas drilling from an existing but idle platform off the north Santa Barbara County coast. The plan, even after the Lands Commission action, resurfaced in the legislative debate at the end of the regular session in September and it was again voted down.

The Sierra Club's lobbyist in Sacramento, Bill Magavern, told local news media that the Lands Commission action should preclude this proposal being repackaged. It would be the first offshore drilling in state waters in decades, and it should not be decided as part of the state's budget process, Magavern argued in news reports.

Plains Exploration and Production Company (PXP), which holds the federal lease for the offshore Point Pedernales Field about 50 miles northwest of Santa Barbara, had applied for two state offshore leases to develop the Tranquillon Ridge Oil Field.

In 2008 PXP had worked out a settlement with major environmental organizations by agreeing to date-certain endings for the Tranquillon Ridge drilling in 2022 and for another field, Point Arguello, in 2017, but there was no assurance that the federal government would go along with those deadlines if profitable drilling was still possible after those dates, critics said. Proponents stressed that the PXP deal eventually would have closed four of 20 offshore platforms in the region.

Before the three-member Lands Commission voted last February, many local officials, residents and environmental activists supported the proposed agreement as a long-term means of better protecting the California coast. Since that time the composition of the commission has changed since Lt. Gov. John Garamendi quit his statewide office to run for Congress and the office is still vacant, although Schwarzenegger picked a replacement, state Sen. Abel Maldonado. Conceivably, if Maldonado is confirmed by the state Senate and another vote was taken on the drilling issue, the past (2-1 vote) rejection would be reversed.

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