Play Live Radio
Next Up:
Available On Air Stations

ExxonMobil's Oil Production Shutdown May Cost County Millions in Tax Revenue

Santa Barbara County Fire Department

The shutdown of oil production on platforms off the Santa Barbara County coast may cost the county $11 million in tax revenue. 

Plains All American Pipeline shutdown pipeline 901 and 903 following the May 19th rupture on the Gaviota coast that spilled about 100,000 gallons of oil, some of which flowed onto the beach and into the ocean.



Since then, three oil producers that use the ruptured pipeline to transport their oil, Veneco, ExxonMobil and Freeport McMoRan, stopped producing.

Last week ExxonMobil said it had exhausted its available storage and would no longer produce from its three platforms. 

The company had asked for a special emergency permit to transport oil by truck but that was denied by Santa Barbara County. 

Dianne Black with Santa Barbara County Planning and Development says the permit was denied for several reasons. 

"The permit request did not submit adequate evidence that a defined emergency exists either under the California environmental quality act or the land use and development code,” Black said.

Black says the county met with ExxonMobil representatives earlier this week to discuss the process for requesting a non-emergency permit for trucking oil. She says that expedited process would take about 10-months. 

Richard Keil, a spokesperson for ExxonMobil Corporation, says the company is the third largest taxpayer in the county and last year paid about $4.2 million.  

"A lot of that money went to schools in the county and public safety efforts and the fire department,” Keil said. 

“Because of the way our tax agreement with the county is structured when we stop production or have to stop production as we have in this case those payments stop as well."

The county says oil company taxes are based largely on production and ExxonMobil can appeal to have its tax bill lowered.  That process could begin July 2016.

The shutdown may cost about $11 million a year in taxes that ExxonMobil, Veneco and Freeport McMoran pay to the county.

Congresswoman Lois Capps says while this possible revenue loss would be significant there are even greater costs resulting from the pipeline rupture.  

"The resulting spill has cost in excess of $100 million. Already the fisherman have been unable to fish up and down the coast. We’ve had two popular state parks that were closed and they're just now opening this week and these are valuable tourism dollars that were lost.” Capps said. 

The congresswoman says she'd like to see a move away from dependence on fossil fuels and more reliance on renewable energy.