🚀 go-pugleaf

 To readers outside of the Santa Barbara area:  the
following concerns a new oil extraction project in our
area, proposed by Mobil Oil.  Named by Mobil the
`Clearview' project, the objective is to build a
major (25,000 barrel/day) oil extraction facility
*on the UCSB Campus*, to `horizontal drill' into
the 40-year old Santa Barbara Oil Sanctuary,
and access the oil in the offshore South Ellwood Field. 

  Mobil sells the project by offering to swap the
moribund offshore platform named Holly, which
operates in State waters off Isla Vista, for the onshore
facility.  Behind the scenes they have negotiated
a $1,000,000 a year oil royalty reduction to keep
Holly from being shut down as unprofitable, and
a $900,000,000 royalty reduction as incentive
to undertake the Clearview Project.

   The Legislation discussed below is one of a long
serious of skirmishes.  If anyone can help out,
we would greatly appreciate your effors.

-------------------------------------------

  Greetings,

  The purpose of this message is to provide background information
on the effort, sponsored by Mobil, in the California Legislature
to pass legislation that would allow the royalties from the
Clearview project to be shared with Santa Barbara County,

AND: 

*****************************************************************
We recommend that you oppose this legislation, and that you write
Assemblyman Brooks Firestone and express your opposition.
We provide his addresses (for paper mail, FAX, and email) below.
*****************************************************************

  This message is a little long, because we want to provide the
material you need to feel comfortable before writing your
assemblyman.

  However, you need not write a long note to your assemblyman.
A simple message like:

_________________________________________________________________
  Dear Assemblyman Firestone,

    I am aware of legislative efforts on the behalf of Mobil
Oil to provide for the sharing of State oil royalties with
Counties.  Although I support this type of sharing, the specific
legislation now under consideration is fatally flawed, because:

    1) It caters to the very narrow interest of Mobil Oil.
    2) There is no enforcement to insure that the State
        follows through on the royalty sharing.
    3) It specifically allows the shared royalties to be used
        to clean up damage done by the oil extraction; I
        believe these costs should be borne by the oil company,
        and passed on to the consumer.

    Please either oppose this legislation (currently, SB 1187
in the State Senate), or revise it extensively so that it
applies to *all* new oil development, assures more clearly
that the royalties will *really* be shared, and prohibits the 
use of royalties for cleanup.

           Sincerely,
               Jane Doe
-----------------------------------------------------------------

would be very effective.
   You should know that simple handwritten notes are now
considered more persuasive than typed or typeset letters;
the handwritten ones are not considered to be mass produced.
   Only if you have good penmanship, though!

   Brooks Firestone's addresses:

        Assemblyman Brooks Firestone
        State Capitol Building
        Sacramento, CA 95814

   FAX: Sacramento - (916)-327-3518
        Local      - (805)-965-2046

 email: Brooks.a.Firestone@Assembly.ca.gov

 Phone: Sacramento - (916)-445-8292
        Local      - (805)-965-1994


   We have targeted Firestone because Sen. O'Connell has
informed us that Firestone is sitting on the fence on this
issue, and input from constituents would be effective
at swaying him.  Other targets are Sen. Ralph C. Dills,
chairman of the Government Organization Committee, which
is the committee that will handle the bill and Sen. Tom Hayden,
who will be sympathetic if alerted.   Their addresses
are given below.

   At the end of this note we include
the exact text of the Legislation that has been introduced, as
well as instructions on how to follow the bill through the
net (email and WWW) as it goes through the legislative process.

========================================================================

    Background
  --------------

  What is a royalty?  -    the oil and natural gas under the waters 
 --------------------      that surround California, out to 3 miles 
                           from the shore, belong to the people of
                           the State of California.  When an oil
                           company (like Mobil) wants to extract
                           that oil and natural gas, they first
                           obtain a lease on the parcel of coastal water
                           they want, from the State Lands Commission.
                           In that lease, they agree to turn over
                           a fraction of the oil and natural gas
                           that they produce to the people of the
                           State, as represented by the State Lands
                           commission.  The fraction turned over
                           is subject to negotiation, and varies
                           from 1/6 up to as high as 8/9.  Mobil
                           says that they have an agreement with
                           the State Lands Commission that they
                           will pay a royalty fraction of 1/6 to
                           the State; a royalty of 1/6 has not
                           been standard for coastal development.
                           We have estimated that the standard
                           (`Cunningham-Shell sliding') royalty would 
                           be about 0.37.  The difference between
                           0.37 and 1/6 amounts to $900 million
                           dollars... that is, the State Lands
                           Commission has, in effect, offered to
                           sell Mobil the people's oil at a
                           discount of $900 million if they undertake
                           the Clearview Project!!

 Where do the royalties -  Sometimes the State Lands Commission takes
   go?                     the oil and gas and sells it on the open
-----------------------    market, to get $; sometimes, the Commission
                           allows the oil company to `post' a price
                           and pay $ to the Commission.  The oil
                           from the same oil field that Clearview
                           will tap (the South Ellwood Field), the
                           oil now extracted at Platform Holly,
                           had on Jan. 19, 1995 price posted by Mobil
                           of $10.35 a barrel.
                              
                           The State takes all the oil and gas
                           royalties, and first uses them to
                           pay for the operating costs of the State
                           Lands Commission; then, the State spends
                           about $8 million on State Water Projects.
                           The remainder goes into the `COFHE' fund,
                           the `Capital Outlay for Higher Education'
                           fund.  Up until about 6 years ago, these
                           funds were distributed to UC, Cal State,
                           and the Community Colleges.  *However*
                           the budget crises of the last 6 years
                           have caused the State to *take* the money
                           from this fund and put it into the general
                           fund.  Senator Jack O'Connell believes
                           that a similar fate would occur to the
                           Clearview royalties.

  What about the offshore- The oil platforms that are greater than
 platforms in Federal      3 miles from shore are leased by the Federal
 Waters?                   government, and the oil and gas royalties
 ------------------------  from those extractions are paid to the
                           Federal Government.  The Federal Government
                           shares those royalties with the State,
                           with the stipulation that the money be
                           passed on to the local governments near
                           the offshore platforms. *** The State
                           of California has never passed these
                           royalties down to counties and cities ***.
                           This is another reason why their is skepticism
                           that any Clearview royalties would be shared
                           with Santa Barbara County.

========================================================================

   What is the current legislation?
  ----------------------------------

   The current legislation is Senate Bill (SB) 1187, introduced
on February 24 by Senator Ken Maddy, whose district (#14) is
now near Fresno, but before 1994 redistricting, included Santa
Maria.

   The text of the bill is included at the end of this
document.

   How does the current legislation cater to Mobil?
  --------------------------------------------------

   SB 1187 provides for the sharing of oil and gas royalties
*only* when the following two conditions are met:

   1)When the lease producing the oil and gas results from
     an adjustment of the boundary of an existing lease.

 ---> Mobil is asking for an adjustment of the boundary of
      lease PRC 3242.1, to get rights to a large oil
      field (the South Ellwood Field) off Isla Vista.  
      They want to extract the oil in the South Ellwood
      Field with the Clearview facility.  The boundary
      adjustment that they are asking for would give them
      rights to the oil under the water between roughly
      Coal Oil Point and the Airport.  The oil and gas under
      this region is now part of the `Santa Barbara Sanctuary',
      established in 1955, and is currently prohibited from
      being extracted.

   2)When the oil extraction is performed from an `upland site'.

 ---> The Clearview facility would be on land, not in the
      water, qualifying it as an `upland site'.

   The Santa Barbara County supervisors have also noted
that this language caters to a narrow special interest.
They voted to support wording that would ask for royalty
sharing for *all* new oil development.


   How does the current legislation lack enforcement?
  ----------------------------------------------------

   As discussed above, the State of California has *not*
distributed the COFHE (Capital Outlay for Higher Education)
funds, nor the Federal royalties, for the past few years.
When the State is in a fiscal emergency, it passes special
legislation to suspend the provisions of bills like
SB 1187.

   A more reliable method of distributing royalties to
local governments would be to give those governments a
seat at the table where royalties are negotiated.  The
lease that the oil company signs could contain provisions
to pay the royalties directly to the local government;
such leases have existed, for example, in Long Beach.

   Further, localities would be able to negotiate the
royalty *they* want.  Montecito could hold out for
and 8/9 royalty for oil wells in its neighborhood;
Santa Maria could dive in at 1/100 royalty.


   How does the current legislation restrict spending
          of the shared royalties?
  ____________________________________________________

   SB 1187 restrict use of shared royalties to the
following 4 uses:

 1) promotion and accomodation of:
              1) commerce
              2) navigation
              3) fisheries

 2) protection of the lands with the cities and counties

 3) accomodation, establishment, improvement, operation
     and maintenance of public recreational beaches

**************************************************************
 4) mitigation of any adverse environmental impact caused
     by the  exploration for hydrocarbons on state tide 
     and submerged lands within city or county boundaries 
     or caused by production or transportation of hydrocarbons
     produced on these tide and submerged lands.
**************************************************************

   This last use, in our opinion, should be prohibited.
Why should the people of the State of California pay to
clean up after the Oil Companies?  Better to pass those
costs on.  The effect of using royalties for clean-up
is to make oil and gas extraction more attractive when oil
and gas prices are low; better to wait for high prices,
and force the oil companies to use some to the high
prices the get to execute the clean up.


=========================================================================

   *** THE WORDING OF THE BILL ***

SB 1187 Tidelands revenue: apportionment to counties and 

BILL NUMBER: SB 1187 INTRODUCED 02/24/95 

INTRODUCED BY Senator Maddy 

FEBRUARY 24, 1995 

An act to amend Section 6817 of the Public Resources Code, 
relating to tide and submerged lands. 

LEGISLATIVE COUNSEL'S DIGEST 

SB 1187, as introduced, Maddy. Tidelands revenue: 
apportionment to counties and cities. 

Under existing law, the Controller is required to 
annually, as of June 30, apportion to each city or 
county having specified tide and submerged land, 1% 
of the revenues paid to the state from oil and gas 
leases within the city or county, except that the total
amount apportioned to each city or county in each year 
may not exceed $100,000 per mile of ocean frontage 
within, and owned or operated as a park by, that city or
county, available to the public free of charge for 
recreational purposes, and leased by the State Lands 
Commission. The amounts paid are required to be deposited
in a special trust fund and expended for specified 
purposes. 

This bill would require that where a lease boundary 
is adjusted pursuant to specified provisions and the 
area added to the existing lease is developed from an 
upland site, in addition to any of the above amounts 
payable to a city or county, 25% of the revenues paid 
to the state which are derived from the production of 
oil, gas, and other hydrocarbons from that lease, as 
adjusted, be paid to the city or county within whose
boundaries the upland site is located. 

Vote: majority. Appropriation: no. Fiscal committee: yes. 
State-mandated local program: no. 

SECTION 1. Section 6817 of the Public Resources Code is amended to read: 

6817. (a) The Controller shall annually as of June 30th 
of each calendar year apportion, for the fiscal year 
ending on that date , to each city or county having
within its boundaries ungranted tide and submerged lands 
or other tide and submerged lands granted to it by the 
state in which the state has reserved the rights to
the mineral deposits contained therein, 1 percent of the 
revenues paid to the state under Article 4 (commencing with 
Section 6870) from those tide and submerged lands which are 
within the limits of the particular county or city, except 
that the total amount apportioned to each city or county 
in each year shall not exceed one hundred thousand dollars 
($100,000) per mile, or fraction of a mile, of ocean frontage 
within, and owned or operated as a park by, that city or 
county, and leased by, the commission for the production of 
oil, gas, and other hydrocarbons, and only in those cases 
where the ocean frontage is available to the public free of 
charge for recreational purposes. However, that limitation 
on the amount which may be apportioned to each city or county 
in each year shall not apply to revenues from leases within the 
limits of the particular county or city which exceed the 
revenues paid to the state during the 1983-84 fiscal year. 
Any city which is fronted, in whole or in part, by a state 
oil and gas lease shall be qualified to receive an apportionment 
under this section based on the formula contained in this 
section.  For purposes of this section, tide and submerged lands 
within the limits of a city shall not be deemed to be within the 
boundaries of a county except in the case of a city and county. 
The commission shall , at the time of remitting revenues 
to the State Treasury received under Article 4 (commencing with
Section 6870) , report to the Controller the total amount 
of the revenue paid from the tide and submerged lands to the 
state shown with respect to each city or county to which that 
amount is applicable. The apportionment for any given fiscal 
year shall be based upon the physical facts with respect 
to each city or county existing on June 30th of the next 
preceding fiscal year. The report of the commission and the 
apportionments of the Controller shall be final. 

(b) Where a lease boundary is adjusted pursuant to Section 
6872.5 and the area added to the existing lease is developed 
from an upland site, in addition to any amounts payable to a 
city or county pursuant to subdivision (a), 25 percent of
revenues paid to the state under Article 4 (commencing with 
Section 6870) which are derived from the production of oil, 
gas, and other hydrocarbons from that lease, as adjusted, 
shall be paid to the city or county within whose boundaries 
the upland site is located. 

(c) The amounts paid to cities and counties shall be deposited 
in a special tide and submerged lands fund established by the 
cities or counties, to be held in trust and to be expended only 
for the promotion and accommodation of commerce, navigation,
and fisheries, for the protection of the lands within the 
boundaries of the cities and counties, for the promotion, 
accommodation, establishment, improvement, operation, and 
maintenance of public recreational beaches and coastline for the 
benefit of all the people of the state, and for the mitigation 
of any adverse environmental impact caused by exploration for 
hydrocarbons on state tide and submerged lands within city
or county boundaries or caused by production or transportation 
of hydrocarbons produced on these tide and submerged lands. 

(d) The Legislature hereby finds and declares that the 
purposes specified in subdivision (c) constitute matters 
of statewide interest and that the expenditure of funds 
for those purposes will benefit all of the people of the 
state. 

(e) This section shall be operative with respect to all 
revenues received in the State Treasury on and after 
October 1, 1963. 

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    *** HOW TO FOLLOW THE PROGRESS OF SB 1187 VIA EMAIL ***

         ----------------------
         Subscribing to a Bill:
         ----------------------
         To obtain information on a particular bill, send electronic
         mail to Senate-News@sen.ca.gov including the following command:

              SUBSCRIBE BILL bill-no

         where "bill-no" is the number of the bill you subscribed to.
         Example:

              TO:       Senate-News@sen.ca.gov
              SUBJECT:  doesn't matter
              TEXT:
                        SUBSCRIBE BILL SB_1187

=========================================================================

    *** HOW TO FOLLOW THE PROGRESS OF SB 1187 VIA WWW ***

  Go to URL:

http://www.sen.ca.gov/htbin/ca-billpage/SB/1187/gopher_root2:[bill.curre
ent.sb.from1100.sb1187]

=========================================================================

    *** OTHER LEGISLATORS TO CONTACT ***

 1)Senator Ralph C. Dills
   Chair, Governmental Organization Committee
   State Capitol Room 5050
   Sacramento, CA 95814

   Phone: Sacramento - (916)-445-5953
          Gardena    - (310)-324-4969

 2)Senator Tom Hayden
   State Capitol Room 2080
   Sacramento, CA 95814

   Phone: Sacramento - (916)-445-1353

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