Friday, April 11, 2008

A "Win-Win" or a "Slick Deal"?

Houston-based oil company PXP has cut the unlikeliest of deals with its longtime nemises in the environmental community. There is a cynical old saying that "everything is for sale, and everyone has their price"-- so it seems!

In return for agreeing to shut down its offshore drilling operation early (by 2017), donating 200 acres of coastland and 3,700 more acres in wine country (and thereby killing a proposed housing development), and donationg millions to a carbon offset program, PXP will enjoy the full supoort of some heavy hitters in the environmental activist community when it petitions for the right to start drilling the Tranquillon Ridge oil field now.

Tranquillon Ridge is about 4 miles off the Gaviota Coast and PXP already has a platform and pipelines in place. Projected yields for the field are 200 million barrels of oil and 50 billion cubic feet of natural gas.

According to the Los Angeles Times:

"PXP wants to drill 22 wells using slant-drilling technology from platform Irene, which is 4.7 miles from shore, outside the three-mile limit of state waters. These wells would burrow on average 3,000 to 5,000 feet into the seafloor and reach as far as five miles from the platform to tap the reserves beneath submerged state lands."

Before any oil can start flowing, however, the application has to be approved by the usual gaggle of regulators: the county, the State Lands Commission, the Coastal Commission, and the Department of Interior.