Terms of confidential deal between Calif. conservationists and petroleum company revealed

Oil company paid $100K to conservationists in deal

LOS ANGELES — An oil company agreed to pay several anti-drilling groups $100,000 and other compensation in exchange for their willingness to lobby for a proposal to expand drilling off the coast of Santa Barbara, according to the terms of an agreement.

The confidential arrangement involving Plains Exploration & Production Co. was posted this week on www.calbuzz.com and confirmed Thursday by The Associated Press.

In 2008, three respected Santa Barbara environmental nonprofits, including the Environmental Defense Center, put their support behind the drilling proposal in exchange for a raft of promises.

Oil officials also agreed to donate 3,900 acres to The Trust for Public Land and contribute $1.5 million to a fund that could be used to purchase hybrid buses. Most importantly, conservationists pointed out that Plains Exploration & Production committed to shutting down its local operation in 2022.

The terms of the agreement, however, remained confidential — a sticking point that ultimately killed the project during the public approval process before the State Lands Commission. Gov. Arnold Schwarzenegger recently tried to revive the project with a proposal to use money generated from the drilling to fund state parks.

While Plains does not plan to empty the reserve, a competing company estimated that it could be as large as 250 million barrels of oil worth billions of dollars. In total, some estimate the drilling would generate $1.8 billion in royalties for the state over the next 14 years.

When the landmark deal was first struck, many saw it as a win-win and a way to end drilling on that part of the California coast. As the project made its way through the approval process, however, many became concerned that if the drilling were approved it could open up the state’s entire coastline to oil drilling.

Now, some are heaping criticism on the confidential agreement, calling it a conflict for the environmental groups.

“I think there are many reasons why EDC and PXP wanted this agreement secret,” said Assemblyman Pedro Nava, D-Santa Barbara, who is running for state attorney general. “It is the payment of money, a certain amount of money upon negotiating the agreement, but the language in the contract essentially creates a performance bonus when the agreement is approved.”

Others, however, including Peter Douglas, the executive director of the Coastal Commission, said environmental nonprofits need to be compensated for their work. And in this case, it was a lot of work for not a lot of money, he said.

“I think the biggest mistake I feel that both EDC and PXP made was making the agreement confidential because it opens the door to speculation and rumors,” he said.

In the agreement released, Plains agreed to pay $50,000 up front and then another $50,000 upon the State Lands Commission’s approval and upon written acceptance of all of the necessary leases. The money was described as “reasonable compensation for work performed” by the Environmental Defense Center on behalf of the two other conservation groups.

The environmental groups agreed to lobby in writing for the project and testify at public hearings before State Lands, Santa Barbara County and the California Coastal Commission. For its part, the oil company agreed to pay the groups fees and reimbursement for any out-of-pocket-costs.

Plains also reserved the right to terminate the agreement if the environmental groups failed to perform any of their obligations.

A spokesman for the oil company could not immediately be reached for comment. Linda Krop, the attorney for the environmental groups defended the payments.

“Every settlement agreement has a provision for fees,” she said. “What happened in this case is that we estimated what we thought our fees were going to be. This has cost EDC a lot more than $100,000. It was three years of work and pretty intense.”

Krop said that she now regrets making the agreement confidential. She and the other parties have not given up on the project and are hammering out an agreement that addresses enforceability concerns aired by State Lands.

“This one will be public,” she said.