The San Luis Obispo Tribune may have been a tad over-optimistic in August when it characterized the county’s Board of Supervisors’ unanimous rejection of an oil company’s plans to drill in the bucolic Huasna Valley as “settling a highly contentious land-use debate” and “bringing five years of controversy to a close.”

Last week, Excelaron LLC sued the board for $6.24 billion, claiming that its decision constituted a “regulatory taking of property” without just compensation. It may be the largest lawsuit ever filed in the county.

The board’s decision supported a 4-1 vote by the Planning Commission March 8 denying the project. Many of the commissioners expressed opposition because of the project’s location in an area prized for its rural tranquility. Excelaron, which filed its  permit application in July 2009, said it was surprised by the rejection and didn’t learn the project was in trouble until a week before the commission’s decision.

The 720-acre oil field, which Excelaron estimates sits atop 208,000,000 barrels of oil, is in an isolated corner of the county. The company calculates that the gross value of the oil in the reservoir is $20.8 billion, based on a $100-per-barrel price, and figures it can recover 30%, or $6.24 billion worth.

Excelaron wants to drill as many as 12 oil wells, injecting steam into them to thin the highly viscous oil. The company would limit production to 1,000 barrels of oil per day, and truck it out with six round trips per day, maximum. Half a dozen wildcat oil companies and mineral rights holders are said to be waiting in the wings should Excelaron successfully overcome county resistance.

Some county supervisors said an oil field is incompatible with the rural and isolated valley. Others worried about increased fire danger, traffic, safety and noise. Fred Collins of the Northern Chumash Tribal Council called the Huasna Valley,  “One of the most pristine in San Luis Obispo County. It’s a cathedral.”

The county has not approved a new oil production facility in decades, but past oil disasters are still in the public mind. A group called Concerned Residents of Huasna Valley wrote an open letter posted just before the supervisors voted that cited “three of the largest on-shore oil spills in North America”—The Tank Farm Fire of 1926,  the 1992 Avila Beach oil spill and the 1999 Guadalupe Dunes disaster..  

But National Review contributor Alex Alexiev wrote at CalCoastNews.com that the dispute was simply one volley in an ongoing state conflict: “It is part and parcel of a war on California’s huge oil and gas resources a cabal of Luddite environmentalists and their political stooges in Sacramento have waged for four decades and are winning to the huge detriment of the economy and the well-being of the state’s citizens.”

–Ken Broder

To Learn More:

Excelaron Files $6.24 Billion Lawsuit Against SLO County (by Bob Cuddy, San Luis Obispo Tribune)

County Sued over Denial of Oil Drilling Plan (Associated Press)

Excelaron LLC v. County of San Luis Obispo (County of San Luis Obispo Superior Court)

Excelaron's Oil Drilling Proposal for Huasna Valley Is Denied (by David Sneed, San Luis Obispo Tribune)