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Drilling opponents' worries deepen 

New part-owner describes far bigger project in Huasna Valley than described in application

click to enlarge PEACE IN THE VALLEY :  Members of the Huasna Valley Association are growing more suspicious of the scope of oil company Excelaron’s plans of the area following description on a part-owner’s website. - FILE PHOTO BY STEVE E. MILLER
  • FILE PHOTO BY STEVE E. MILLER
  • PEACE IN THE VALLEY : Members of the Huasna Valley Association are growing more suspicious of the scope of oil company Excelaron’s plans of the area following description on a part-owner’s website.

For months, Huasna Valley residents have worried that the oil companies have misrepresented a project proposed for their little valley. Now they think they’ve found the smoking well: A declaration and supporting map from an investor in the project that describe a project three 
to four times larger than what the county has had before it 
for consideration.

Excelaron officials told county planners they intended to re-tap three existing wells that have been dormant since the 1980s. If that were not feasible, officials said in their application, they would drill as many as four new wells. The project was considered minor enough that it initially did not require an Environmental Impact Report, although the company recently agreed to the higher level of review.

That description, however, differs sharply from one posted on the website of a new part-owner of Excelaron.

Excelaron is based in SLO, but owned by a group of larger oil companies based in Australia, Canada, and, in a recent addition, Washington state. Residents of Huasna have long been suspicious of the company’s motives and banded together under the name Huasna Valley Association. The community group maintains the project presented to the county doesn’t make sense, monetarily or otherwise, and they want the county to take notice of inconsistencies.

“I think that unless [Excelaron is] willing to fully disclose the project,” HVA Coordinator Ron Skinner said, “the county should not continue to waste resources analyzing the project.”

The fear among HVA members is the project is being “piece-mealed” or passed through county planning in small phases, rather than having it looked at by the county as a large project. In this way, opponents worry, the applicants wouldn’t have to address cumulative effects on the community or environment.

Those fears were further stoked by publication of information by Washington-based Mogul Energy International. Mogul recently purchased 40 percent of Excelaron, and Mogul’s website tells quite a different story than the one Excelaron has been telling the county and Huasna residents.

While the county has been planning for four exploratory wells, Mogul’s website says, “The development of these [Huasna] resources involves a three-phase hot water injection project, each phase consisting of five vertical hot water injecting wells drilled on line.”

It is accompanied by a map, showing the placement of 15 wells.

This matters because smaller projects are subjected to lower levels of environmental review and permitted in the county with less mitigation than larger projects, which require a look at their cumulative effects. Residents of Huasna, many of them farmers and ranchers, say they cannot afford to risk having the land compromised.

A representative from Excelaron sent an e-mail saying the company is still planning for only four exploratory wells, and anything beyond the proposed project is purely speculation.

“The program description on the Mogul website is a demonstration of how one could develop this field,” according to an e-mail from Excelaron project coordinator Kit Matlick, “and does NOT represent the proposed project. The graphic will be removed to avoid any further confusion.”

Skinner said the numbers have never added up. For example, Excelaron’s current permit is for up to 12 round trips of oil trucks per day, but based on historic documentation of the wells, extracting oil from four wells—as described in the permit application—would fill less than one truck per day. So why, opponents argue, bother get permitting for 12?

This is also not the first time that Excelaron or its investors have articulated a project much larger than versions presented to the county. According to information handed out by Excelaron at a September 2008 meeting: “The project is limited to four exploration/production wells. Development will take place on only two parcels in Huasna Valley—on two acres out of a total of 259.76 acres.”

At the time, Excelaron had more than 1,300 acres already leased or owned and a December 2007 article, written for an Australian investment magazine, quoted Excelaron’s CEO Grant Jagelman as saying Australian Oil Company, Excelaron’s parent company, was trying to lease 3,000 acres and drill seven wells. AOC also set up a second LLC—Huasna Oil Company—to get more leases. That LLC has not been active, and Jagelman said that plan has now been scrapped.  Excelaron eventually acknowledged having the 1,300 acres under lease, But now, Mogul’s website says the company has leased almost 2,000 acres.

Despite a comprehensive outreach campaign by Excelaron, the cumulative effect of these discrepancies and others has led HVA members to believe Excelaron is not being forthcoming about the scope of the project.

The company recently agreed to conduct an EIR, although the county did not require it, but HVA members counter that an EIR on an incomplete project is worth very little. The project will go before the county Planning Commission March 26.

New Times staff writer Kylie Mendonca can be reached at Kmendonca@newtimesslo.com.

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