Editorial

Does Excelaron lawsuit just confirm critics’ fears?

$6.2B claim: exaggeration, legal posturing or a foot in the door?

December 2, 2012 

A map shows where Exceleron wants to drill for oil near Huasna Valley.

JOE TARICA — jtarica@thetribunenews.com

We’ve said it before and we’ll say it again. We don’t believe that the Huasna Valley in South County is an appropriate location for oil production.

That said, oil extraction is an approved use there, and the county has the legal obligation to give applications a fair hearing.

We believe the county did exactly that when it considered Excelaron’s application for a permit to develop up to 12 wells there.

There were major weaknesses with that proposal: An insufficient buffer zone between oil facilities and residences; unacceptably high fire danger, especially with the nearest fire station 30 minutes away; and the access route included a private road subject to occasional flooding.

The Board of Supervisors denied the application by a 5-0 vote. It was the correct decision, but now the aggrieved Excelaron has filed suit against San Luis Obispo County.

The lawsuit argues that the county has no intention of allowing drilling anywhere in the Huasna Valley, and that constitutes an illegal “taking” of Excelaron’s mineral rights.

And here’s where it gets really outrageous: Excelaron claims there is $6.24 billion worth of recoverable oil in the field, and if the county doesn’t approve its project, it’s entitled to recover that amount in damages.

Seriously?

How in the world could Excelaron pump that much oil with a measly 12 wells? At a rate of 1,000 barrels per day — which is the amount that Excelaron claims it could extract with 12 wells — it would take 171 years to produce $6.24 billion worth of oil.

Of course, the $6 billion figure could be legal posturing — or perhaps Excelaron really does believe it can produce that much oil.

In that case, residents of the Huasna Valley were justified in their concerns that Excelaron is merely trying to get a foot in the door with its initial application for 12 wells — talk that Excelaron representatives have dismissed as “highly speculative.”

Whatever the future holds for the Huasna Valley, it’s clear that Excelaron isn’t going away — not after investing five years and $5 million in the project.

The company’s lawsuit asks a judge to set aside the county’s denial of its project and either approve the application for 12 wells, or send it back to the Board of Supervisors.

Even if a judge denies the request, Excelaron still has the right to file another application with the county.

If that happens, perhaps Excelaron can present anew and improved plan that addresses environmental, safety and aesthetic concerns.

In our view, though, that’s a mighty big perhaps.

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