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Plans for 350 Oil Wells Near Pismo

Plains Exploration and Production Co (PXP) has filed a preliminary notice with San Luis Obispo County that it will seek to expand its oil field in Price Canyon near Pismo Beach from 100 oil wells currently to 350. The drilling is planned on hillsides on both sides of the highway and include 11 new pads. A new pipe will cross Pismo Creek that also runs at the base of the canyon.

County planner John McKenzie says the company has been asked to respond to questions regarding any potential use of the controversial practice of fracking at the site but has indicated it will be doing more of the traditional steam injection to coax heavy oil out of the ground.

McKenzie says the environmental review of the big project could take a year or longer and of course, include public hearings.

The oil field is the largest in SLO county. A 2010 PXP release refers to the multi-phase Price Canyon project said  “PXP holds a 100% working interest in the Arroyo Grande Field located in the Santa Maria Basin in San Luis Obispo County, California. This is a long-lived field that has heavier oil (12 to 16 degree API gravity), well depths averaging 1,700 feet and requires continuous steam injection. In 2009, PXP spent $4 million on capital projects in this field and drilled 7 wells.”

Fast forward to 2012 and you see a major increase in activity on the project. Plains Exploration is the largest commercial building applicant in San Luis Obispo County this year after the two huge solar projects on the Carrizo Plain. Already this year,PXP has submitted applications for about 100 permits for improvements in the Price Canyon area valued at over $40 million. With plans for more than 3X the wells – it’s clear these guys are planning to spend lots more money and believe there is plenty more oil in Price Canyon.

The county notice calls the expansion Phase V of their project . The field is said to be 320-acres which is within the larger 1,480-acre Price Canyon Unit as defined by the California Division of Oil, Gas & Geothermal Resources (DOGGR).

project location

In 2011 PXP got approval to build a water recycling operation in Price Canyon that discharges back into Pismo Creek. PXP needed the facility to have enough water to boost production of the heavy crude oil by what is expected to be thousands of barrels a day – up from around 1300 a day now. The water facility will be ready for operation next year.

If they are planning more oil rigs,not far away there could also be more houses too. Price Canyon has been in the news recently because of a development plan adjacent the City of Pismo Beach that would roughly double the number of residential units in town if it moves forward.Better get used to living near oil rigs down the block.
   
Mining Giant Buys PXP
The big got bigger this month. Earlier in December it was announced that the mining giant Freeport-McMoran was buying Houston-based Plains Explorations and Production for approximately $6.9 billion in cash and stock. Beside holdings in Price Canyon called the Arroyo Grande Oilfield,PXP also has extensive oil holdings elsewhere in southern California and the San Joaquin Valley. The company is also drilling off the coast near Vandenberg. They are said to be the fourth largest oil company in the state.
Locally PXP has a regional office in San Maria. In California, PXP says they have 430 personnel and on average over 400 contract personnel.
On the fracking issue, the worries about the use of some chemicals in injected water to extract petroleum products has heated up and now the Brown administration has signaled interest in getting involved on the state level. A draft proposal requires the oil industry to disclose where in the state they are using hydraulic fracturing, commonly referred to as “fracking. Brown’s proposal comes  as a critical new movie on the practice called Promise Land is set to be released in theaters December 28.
Also NRDC says in October – “Plains Exploration and Production Company (PXP) released a long-awaited study on the oil drilling company’s hydraulic fracturing operations at the Inglewood Oil Field in the Baldwin Hills area of south Los Angeles. While it took a year to compile the study, this report actually was years in the making as it comprised one of a host of new requirements imposed on PXP through a July 2011 settlement that resolved a lawsuit brought by NRDC and three other plaintiffs in 2008.
The study appears to have found that two test frack jobs at the Inglewood field did not result in adverse impacts to groundwater or community health, nor did they cause additional ground movement or subsidence. We are reserving judgment until we’ve had a chance to carefully review all of the study’s findings, as well as the hundreds of pages of dense, technical information the author has offered to support those findings.”

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