California Environmentalists Now Willing to Sell Out to Big Oil - at a Very, Very High Price

Environmentalist Groups Reach Unprecedented Greenmail Extortion Deal to Limit PXP's Production

This is perhaps one of the most under-the-radar stories in the news.  While the story has actually been out since April, I only heard about it when Brit Hume announced it on Special Report on Thursday evening, June 26, 2008.   Bloomberg and Reuters are the only other two news outlets I could find who did simple press releases on this back in April.  Other than that, the word's not really gotten out yet.  Behold, is this the future of doing business in America?

Brit Hume: "A group dedicated to opposing oil drilling off the California Coast is now changing its tune, correspondent William Longeness reports on a controversial and unusual arrangement that for one oil company comes at a heavy price."

William Longeness:  "Houston oil executives and California environmentalists call the deal "unprecedented" - an agreement that could end a 27 year ban on offshore drilling in California.  No state save Alaska has more oil off its shore than California.  And environmentalists like Linda Krop fought for decades to keep it under the sea floor.  Even an anti-drilling group like GOO dropped its opposition FOR THE RIGHT PRICE [emphasis mine]."

Abe Powell, President of GOO (Get the Oil Out):  "We feel like this is precedent-setting and we think that in the long run, uh, anybody that really wants to...try to...you know, do business in this state has to deal with the environment and the environmentalists."

Longeness:  "Some call it extortion - others, hard bargaining.  Off the California coast there are 79 active oil and gas leases.  About half are tied up in court.  One belongs to PXP Energy out of Houston.  After years of opposition, environmentalists now endorse allowing PXP to drill 22 slant wells off a single existing platform to suck oil out of State waters - but [and that's a BIG BUT] - it comes at a price.  The company must shut down and dismantle three other oil platforms, close two processing plants, donate 4,000 acres to an environmental trust, pay $1.5M to buy clean buses, and agree to end any and all operations in 14 years."

Dan Kish, Vice President of Institute for Energy Research:  "It looks as though if you're willing to pay the right price, they're willing to let you do something they say they're adamantly opposed to." 

Longeness:  "While PXP refused an on-camera interview, State officials told the company it needed environmentalist approval before even approaching their regulatory process, which is where the deal is now.  While "Greens" signed off on the deal, now Exxon/Mobile is opposed.  It fears that PXP will essentially drain oil from its adjoining lease.  Exxon and other companies also fear precedent that every future rig will come with an environmental price tag, a hidden cost that will make gasoline even more expensive. 

According to eNews 2.0 (April 11, 2008): 

The unprecedented agreement is hoped to be a model for other oil and gas production companies and other industries that could react and work together with environmentalists in order to fight against climate change.

"Preserving thousands of acres in the Lompoc uplands for permanent protection is the icing on the cake," said Steve Dunn, President of CPA [Citizens Planning Association of Santa Barbara], a group that not only opposed the original Tranquillon Ridge proposal, but also the Purisima Hills development project.

"Through this agreement, we will guarantee an end to oil development from four separate projects, significantly reduce greenhouse gases and preserve important lands for future generations," he concluded.