Henry Dubroff

The annual Santa Maria Valley Chamber of Commerce dinner is a big deal.  Some 500 business types and politicians turn out in tuxes, ties and cocktail dresses, the tri-tip is served family style, and Bill Murray’s brother Ed, the emcee, has a quick wit that can bite hard.

At this year’s event at the Elks Lodge on Bradley Boulevard, I took a moment to glance at the sponsor banners hanging amid the sparkling lights when I noticed a sign I’d never seen before: “No on Measure P,” it said in big red letters.

It turned out that even in mid-August, the No on P campaign in the Santa Maria Valley was already a high-profile affair. Large energy companies, most of the North County’s elected officials and chambers of commerce and many others are firmly opposed to this November ballot measure, which would bar “high-intensity” energy production in the county.

In contrast, the “Yes on P” campaign, even on the South Coast, is fairly low-key. The Santa Barbara Water Guardians, which pushed the initiative onto the ballot, is not a household name. The “Yes on P” Facebook page had just 111 likes as of Aug. 19.  Higher-profile organizations such as the Environmental Defense Center are just beginning to drum up support.

On closer reading, there are a lot of questions about the ballot measure, a 28-page document that begins by talking about water conservation in times of drought and fracking, then goes on to list a host of other activities that could be barred or heavily regulated.  Those include many of the steam-injection techniques that are commonly being used in conventional, on-shore installations, including some for routine maintenance.

Pacific Energy and other oil firms that operate in the region argue that Measure P is just a stalking horse for entirely shutting down on-shore oil and gas production in the county. Even some county officials acknowledge its ambiguity.

If Measure P passes, the county might need to pass an ordinance further defining “high intensity” operations to head off lawsuits or an erosion of its tax base, or both.
Although Measure P supporters say their initiative is an effort to regulate the controversial oil-extraction technique known as hydraulic fracturing, or “fracking,” some tough new rules are already on the books.

In December 2011, Santa Barbara County enacted an ordinance that heavily regulates injecting steam and chemicals into deep wells in shale formations to stimulate the flow of oil and gas. Anybody who wants to frack must file a plan with the county that’s subject to an environmental impact review.

Meanwhile, tax revenue is an issue. The county estimates it could lose some or all of an estimated $16 million a year in direct revenue. The impact of lost jobs and purchasing power is not included in that figure.

There is also the question of possible litigation and “takings” compensation if existing well owners, even those with grandfathered permits, can’t perform future maintenance and have to abandon their wells.

Pacific Energy, Breitburn Energy Partners and others are expected to pour millions of dollars into Measure P opposition, a boon to television and radio stations but a move that also risks some voter backlash.
And there is the question of jobs. Some 70 percent of rank-and-file oil field workers are Latino. And oil field work is one of the few well-paying industries in North County in growth mode.

Santa Barbara County’s regulate-at-will theory of managing the economy failed at the onset of the recession, when job losses and a collapse in real estate tax revenue left a $70 million budget hole. Pensions remain a huge unfunded liability and without other new revenue sources, legacy oil-and-gas activities will remain a key source of county taxes for the foreseeable future.

A smarter way to go forward would be to develop a viable economic development strategy for North County that trumps its dependence on oil revenue and jobs in the energy sector. Until that happens, issues such as Measure P will be divisive, expensive and hard fought.

Meanwhile, the population of North Santa Barbara County is growing while the South Coast is stagnant or perhaps even shrinking. Measure P will be a litmus test for how well an energized group of North County, Latino and business voters can perform against a dedicated core of South Coast environmental enthusiasts.

• Contact Henry Dubroff at hdubroff@pacbiztimes.com.