Chevron Corp. broke a three-year impasse with California officials over development of a huge oil field off the West Coast yesterday, announcing it would take the Point Arguello project out of mothballs and move 20,000 barrels a day by tanker to refineries outside southern California.
Chevron and its partners in the $2.5 billion Point Arguello project acted after the Department of Energy intervened to seek a compromise between the oil companies, which wanted to transport the oil by tanker, and officials of Santa Barbara County, who insisted for environmental reasons that the oil be sent by pipeline.
Point Arguello consists of three long-completed drilling platforms over an oil field about 50 miles off the Santa Barbara coast. Believed to be the biggest U.S. oil resource discovered since Prudhoe Bay in Alaska, the field could produce up to 100,000 barrels a day if fully operational, according to DOE.
Energy Secretary James D. Watkins made activation of Point Arguello one of the main points in the Bush administration's response to the oil crisis triggered by Iraq's Aug. 2 invasion of Kuwait.
"The county's position was pipeline-only" because of fears of oil spills from a tanker accident, Energy Department General Counsel Stephen A. Wakefield said yesterday. "Chevron's was tanker-only" because the company had been unable to find "feasible pipelines" to link a pipeline from Point Arguello to refineries in the Los Angeles area.
Santa Barbara County supervisors rejected a DOE compromise proposal that would have allowed Chevron to use tankers for most of Point Arguello's output for four years while a pipeline was developed. Chevron said yesterday it would have accepted the compromise, but was moving ahead without it to deliver a limited amount of oil "in response to the president's call for increased domestic production."
Wakefield and Chevron officials said it will take a year to reach the 20,000-barrel production target.