LOS ANGELES (Reuters) - The California state senate on Friday approved by a narrow vote the first new offshore oil drilling lease since 1969, but state officials say it is a one-time exemption to the long-time moratorium on new leases.
State officials say this is not a change in policy and does not signal an opening of state offshore lands to oil exploration.
The bill on Friday was being debated in the state assembly. Gov. Arnold Schwarzenegger supports the measure.
The one-off proposal will allow additional oil platforms. Plains Exploration & Production (PXP) said it will use slant drilling from an existing platform in federal waters to get to oil under state waters.
The project will be in waters off Santa Barbara in the same general area as a 1969 major oil spill that helped galvanize the modern environmental movement in the United States.
The senate approved the bill to allow the new lease by a 21-18 vote early Friday. It is one of 30 bills being considered along with a budget package for California as the state attempts to close a $26 billion deficit.
"This is essentially a one-off," said H.D. Palmer, spokesman for the California Department of Finance.
"This does not open the door in any way, shape or form of any massive expansion of offshore drilling," Palmer said.
The well is expected to generate about $100 million a year to the cash-strapped state in royalty payments over the 15-year project.
Palmer hailed the cooperation between Santa Barbara environmental groups and the oil industry on the project, but California Lieutenant Governor John Garamendi issued a letter to the governor and legislative leaders on Thursday signed by 34 environmental groups opposing the project.
Earlier this year, Garamendi called the proposal a "naked power grab" by Schwarzenegger.
"Approval of this project via the budget fails to take into account the consequences of reversing 40 years of long-standing state policy on both new federal leasing and additional leasing in state waters," the letter says. "Furthermore, no governor since the advent of the 1969 oil spill, either Republican or Democrat, has supported new offshore oil drilling in state waters."
Plains is an independent oil and natural gas producer based in Houston. It would have to dismantle four offshore platforms and two onshore crude oil processing plants by 2024. Plains expects to extract about 105 million barrels of oil equivalent (boe) in the 15 years that would be allowed.
California consumes about 1.9 million barrels of oil per day, almost 10 percent of U.S. consumption, according to federal statistics.
Oil platforms in federal waters would not be affected.
The governor's office earlier said the Plains lease would not violate a 1994 state ban on new drilling.
(Reporting by Bernie Woodall; Editing by Christian Wiessner)
