LehiNephi's Journal: Drilling for Oil and NIMBY in California

(Disclaimer: I work for an oil company) I recently heard an interesting story at work. It goes something like this:

A little while back, a large, producible oil reservoir was discovered off the coast of California, near Santa Barbara. Exxon got the lease from the federal government to drill and produce that oil. So far, so good.....except that this is California, and the rampant NIMBY syndrome in the area interfered. Exxon was not able to get the permits to pipe this oil to shore and into pipelines in the area. The protesting was so vocal and persistent that many outsiders began to wonder if anybody in the city actually held a job.

Fortunately for Exxon, the spot of water where this platform was to be built was outside of the State of California's jurisdiction, although it was visible from shore. The plan for the project was changed from a traditional oil platform to an FPSO, or Floating Production, Storage, and Offloading facility. This meant that instead of a single, fairly small oil platform, there would now be an enormous boat (the FPSO), flanked by two enormous oil tankers, which would receive the oil from the FPSO and ship it elsewhere on the coast.

The project was built, and to nobody's surprise, the locals were not exactly thrilled with the sight of three huge ships constantly off the coast. But things did not end there. You see, there's always some amount of natural gas that comes up with the oil, varying from just a few percent up to the upper 90%'s, and it has to be put somewhere. Exxon was able to make an agreement with a local utility company to pipe the natural gas from this FPSO to shore for power generation. I'm not clear on the details, but somehow because it was a utility company, this type of agreement is only governed by federal law and not local law.

Eventually, the state government capitulated, and allowed the oil to be piped ashore at that location, in exchange for replacing the three big ships with a platform and promising not to use the FPSO anywhere on the western coast.

As an interesting sidenote the reservoir in this location is under so much pressure that oil naturally seeps through the rock and sediment into the water and finds its way onshore. And, of course, Exxon gets blamed for it....