Tuesday, March 5, 2019
Much has been written about the very real risks of increased oil production in the Santa Maria Valley. At the same time, these oil companies continue to boast of the increased tax revenues their projects will bring to our county as a way of convincing us that their projects are essential to our financial well-being. These boasts are an enormous misdirection, if not outright lies. I am speaking specifically about the upcoming proposal on March 13 when the Planning Commission will vote on ERG Resources' proposal to drill 233 new oil wells in the Santa Maria Valley.
Financially, ERG is insolvent. In 2015, the company filed for Chapter 11 bankruptcy in Texas, which is still in process. In August 2016, ERG filed a motion asking the Bankruptcy Court to significantly reduce its tax liability for its oil and gas properties in Santa Barbara County. The Environmental Defense Council and the County Assessor worked closely to oppose that motion, but that process was costly to the county — that is, to us, as taxpayers.
According to county records, in 2017-19, a County Counsel budget report stated that ERG owed the county $14 million in taxes, so much that County Counsel requested more in the legal budget to try to recover it. We certainly can’t count on ERG paying taxes in the future, given its history. And when there is a spill, how will we be able to hold ERG accountable to clean it up? Why should we take on a risk such as this when this company cannot even cover its own debts?