Tranquillon Ridge and Logic

I’m reading Robert Cruickshank’s post at Calitics, titled, What the Louisiana Oil Spill Tells Us About Tranquillon Ridge.  Summarizing, another oil-spill tragedy is unfolding in the Gulf because of offshore drilling and “offshore oil drilling presents an inherent and ongoing risk to the environment and the economy.”  He concludes,

Approving the Tranquillon Ridge project means we are again running a significant risk of a major and devastating oil spill striking what is one of the most unspoiled parts of the California coastline (the remote west-facing beaches of Santa Barbara County).

If a paragon of new offshore drilling technology can fail this catastrophically, it should cause Californians to seriously reconsider whether allowing new drilling off our coast is worth the considerable risk. As our oceans are already facing the stress of pollution, overfishing, and global warming, offshore drilling seems like the last thing we would want to do to our oceans, our beaches, our wildlife, and our economy.

I think this is an emotional reaction, not a logical reaction.  My understanding is that the Tranquillon Ridge deal is not “allowing drilling off our coast.”  Drilling is already occurring off the coast, and we all hate it.   

But this deal does not set up any new platforms, drilling rigs, etc.  It allows PXP to drill at an angle from existing platforms, but in exchange it sets up a date when they stop drilling, dismantle the platforms, and go away.  

Without the deal they can stay.

There is a concern that they won’t honor the deal.  Fair enough.  So let’s say that, seeing as how they are in the oil business, there is perhaps a 99% chance that they will try to wiggle out of the deal.  That still leaves a 1% chance that they will honor the deal, stop drilling, dismantle the platforms, and go away.

Even a 1% chance that they will honor the deal leaves us all better off than we are today.  Take the deal.

Disclaimer – Hannah-Beth Jackson, who founded Speak Out California, is working with EDC on the Tranquillon Ridge project.  I am currently a volunteer with Speak Out California and the associated Institute for the Renewal of the California Dream. While I’m not paid my association with HBJ might influence my views.

1 thought on “Tranquillon Ridge and Logic

  1. Thank you for your observations on this, Dave. While I agree with your point that we can’t lose with this deal, the fact is that the odds are overwhelming that we’ll win.
    Here’s why:
    When the agreement was made, the EDC anticipated every loophole that the oil company, PXP, might try to wiggle through. It closed them all. It made the State of California a party entitled to enforce the agreement, if for some reason, EDC didn’t.
    It takes away PXP’s ability to keep operating its rigs or its on-shore processing facility after the agreed-upon end date. In fact, the agreement insures that the land on which the processing machinery exists ends up being transferred over to the public in perpetuity.
    Now, even with all that, should PXP for any reason, try to get out of the deal, the terms of this agreement require that PXP “disgorge” itself of any profits it might generate after the expiration date of this agreement. In other words, if they refuse to stop drilling and continue to make money after the end-dates, that money would go directly into a fund that the EDC designates for the environment—likely open space.
    So, even an oil company—or should I say ESPECIALLY an oil company isn’t going to continue drilling if it can’t take the profits that would otherwise be generated by their efforts.
    Bottom line here:
    The chances are really miniscule that they’ll be able to wiggle out of this deal-even if they wanted to. And besides, if we do nothing, nothing will happen to end the drilling. That makes this a win-win situation.
    While the best thing would be to end the drilling NOW, that just isn’t going to happen. As long as we continue to be dependent on fossil fuels and the law says we can’t force an end to existing drilling, we’re stuck. With even a Democratic administration talking about increasing oil drilling, we’re not going to see the laws changed any time soon.
    For betting people out there, this is a darn good bet.

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