Exxon set to produce oil from Santa Barbara field

Since the late 1960s, the development of the oil fields off California's Santa Barbara Channel has been a burning issue. Now, it seems, it is the oil itself from one of the largest of those fields that will be burning -- in Midwestern and East Coast boilers.

On April 1, Exxon Corporation expects to begin pumping oil -- eventually up to 40,000 barrels a day -- from its Hondo field 5 1/2 miles off the coast. The use of this oil is expected to save the US balance of payments more than $500 million a year that would otherwise have been spent on foreign- produced oil.

"We will definitely be pumping oil this spring, probably within the next three-to- four months," said Exxon president Howard C. Kauffmann in an interview in New York.

According to an Exxon spokesman in Los Angeles, the oil from the Hondo field will be shipped through the Panama Canal to gulf coast refineries and then to either Midwestern or Eastern markets. It is high in sulfur content and probably will be used for home- heating purposes. Normally, it would be refined at Exxon's northern California refinery, but the latter is running at capacity, processing Alaskan crude.

Development of Hondo is expected to continue as Exxon tries to determine the size and characteristics of the field.

"As soon as we get some production experience, we will be able to judge our options better," says the spokesman. The company estimates that the Hondo field has 100 million barrels of reserves.

So far, Exxon has drilled 18 of 28 planned wells in the field from its Hondo platform. But already additional drilling is planned to determine if the field can be extended. If it can, more platforms will probably be needed. Two other geological structures that may contain oil have been found in the area, and Exxon hopes to drill both.

Meanwhile, the company is converting a 50,000-deadweight-ton tanker into a barge that will separate the oil from natural gas. The tanker will be anchored in shallower water about a mile from the platform. Oil will be moved from the barge to the refinery by tankers.

If, in fact, Exxon does begin pumping oil, it will culminate nearly 12 years of lawsuits and the expenditure of more than $600 million by the giant oil company.

(The Santa Barbara Channel first made national headlines in late January 1969 , when a Union Oil of California well six miles offshore erupted, gushing an estimated 235,000 gallons of oil that fouled area beaches, destroyed marine and bird life, and spread an 800-square-mile slick on the Pacific Ocean. The well was capped eight days later but began leaking again the following December. The incident led to toughened federal offshore drilling standards and is widely credited with triggering the environmental movement in the United States.)

In Exxon's case, the legal battle revolved around the company's desire to process the oil and gas at an onshore site and then to transfer the oil to tankers via a marine terminal.

The State of California objected to the use of tankers along its coastline and suggested instead that Exxon build a pipeline to its Los Angeles refinery. But the pipeline would have had to run through 14 separate communities, requiring approval from each.

Exxon reasoned that in the area, with its history of earthquakes, lengthy delays were likely. So instead of complying with the state's wishes, it decided to process the oil offshore. This prompted another round of lawsuits as the state contended that the processing plant would adversely affect local air quality and might cause a spill hazardous to local beaches.

All told, Exxon faced 12 legal battles with the state, federal, and local governments over the platform. Three environmental impact studies have been made and 21 public hearings held. And, in 1975, a Santa Barbara County-wide referendum was held to decide whether to develop the offshore oil fields.

The end result, says an Exxon spokesman, was a compromise. The company put extra equipment aboard the barge designed to recover some of the sulfur. And it developed a system to burn the natural gas in the barge's own electric generators instead of emitting it into the atmosphere.

The state and county stopped fighting the development, observers say, because the makeup of various agencies, such as the Coastal Zone Commission and the California Air Resources Board, changed considerably over the years and because challenging Exxon in court had proved to be equally long and costly