Winning Minds by Winning Hearts

California Producer Makes a Difference

More than three decades have passed since the Santa Barbara oil spill, but the accident still haunts this whale-watcher's Eden at Carpinteria, Calif.

Just ask Venoco Inc., which owns and operates three production platforms here, with the associated unique challenges. For example, while producers elsewhere face only tumbleweeds, Venoco must constantly manage diplomatic relations with 100 neighbors living right next to its facilities — a permanent colony of harbor seals.

The sight of marine mammals snug against a service pier and two pipelines is but one of this area's reminders of the intrusion of oil on paradise. Venoco provides public access to view the rookery, just part of its extensive community outreach.

But a lot of people have never liked the industry. They want it out. They always have.

"The average amount of oil spilled from platforms, drilling and pipelines (since the big spill) averages about 28 barrels a year," says Rod Eson, Venoco's CEO and co-founder. "The industry has done an incredible job improving what we do. But the environmentalists still point to the pictures of the spill more than 30 years ago and say, 'This is what you guys are all about.'"

Perhaps the 1969 spill can't fade into history because it created history, giving birth to the local group Get Oil Out, and some say also to Earth Day and the modern environmental movement.

Notable, too, much of the production here includes sour gas, which has always frightened people, one reason for decades of opposition to onshore processing.

The area has numerous natural oil and gas seeps, and the largest emits over 1,000 barrels of oil a week into coastal waters. But that's easier for locals to accept than having 21 production platforms interrupting the area's fantasy sunsets. So even though the 1989 Alaska tanker spill eclipsed the smaller incident here 20 years earlier, this is still ground zero for American anti-oil sentiment.

"There are people here who were involved in the '69 cleanup who had oiled birds die in their arms," said AAPG member Karen Christensen, Venoco's exploration manager.

Soon, a local museum will add a new exhibit on the 1969 spill. That kind of exposure might make some companies cringe, but Venoco is also sponsoring an exhibit on the importance of oil and gas development in the Santa Barbara Channel, and Eson serves on the museum board. Like other corporations, Venoco sees citizenship as a duty and a business necessity.

But unlike many, it acts on those values with a striking mix of enthusiasm and creativity.

'Different Kind of Oil Company'

Founded in 1992, privately-held Venoco happily took on its highly-regulated offshore properties, along with fields on the Beverly Hills High School campus, in a Texas wildlife preserve and in the Sacramento Basin, where neighbors range from concerned duck clubs to delicate rice farms.

Image Caption

The "Tower of Hope" in Century City, is an active rig decorated with paintings done by children in medical facilities all around California. In the foreground are stadium seats for Beverly Hills High School; behind the tower is the Century City Medical Plaza.
Photo courtesy of Don Clarke and Venoco

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More than three decades have passed since the Santa Barbara oil spill, but the accident still haunts this whale-watcher's Eden at Carpinteria, Calif.

Just ask Venoco Inc., which owns and operates three production platforms here, with the associated unique challenges. For example, while producers elsewhere face only tumbleweeds, Venoco must constantly manage diplomatic relations with 100 neighbors living right next to its facilities — a permanent colony of harbor seals.

The sight of marine mammals snug against a service pier and two pipelines is but one of this area's reminders of the intrusion of oil on paradise. Venoco provides public access to view the rookery, just part of its extensive community outreach.

But a lot of people have never liked the industry. They want it out. They always have.

"The average amount of oil spilled from platforms, drilling and pipelines (since the big spill) averages about 28 barrels a year," says Rod Eson, Venoco's CEO and co-founder. "The industry has done an incredible job improving what we do. But the environmentalists still point to the pictures of the spill more than 30 years ago and say, 'This is what you guys are all about.'"

Perhaps the 1969 spill can't fade into history because it created history, giving birth to the local group Get Oil Out, and some say also to Earth Day and the modern environmental movement.

Notable, too, much of the production here includes sour gas, which has always frightened people, one reason for decades of opposition to onshore processing.

The area has numerous natural oil and gas seeps, and the largest emits over 1,000 barrels of oil a week into coastal waters. But that's easier for locals to accept than having 21 production platforms interrupting the area's fantasy sunsets. So even though the 1989 Alaska tanker spill eclipsed the smaller incident here 20 years earlier, this is still ground zero for American anti-oil sentiment.

"There are people here who were involved in the '69 cleanup who had oiled birds die in their arms," said AAPG member Karen Christensen, Venoco's exploration manager.

Soon, a local museum will add a new exhibit on the 1969 spill. That kind of exposure might make some companies cringe, but Venoco is also sponsoring an exhibit on the importance of oil and gas development in the Santa Barbara Channel, and Eson serves on the museum board. Like other corporations, Venoco sees citizenship as a duty and a business necessity.

But unlike many, it acts on those values with a striking mix of enthusiasm and creativity.

'Different Kind of Oil Company'

Founded in 1992, privately-held Venoco happily took on its highly-regulated offshore properties, along with fields on the Beverly Hills High School campus, in a Texas wildlife preserve and in the Sacramento Basin, where neighbors range from concerned duck clubs to delicate rice farms.

The strategy: Buy non-core or under evaluated, mature properties — ideally, from departing majors such as Chevron and Mobil — at smart prices, in prickly areas that few others will touch. Then, revitalize them with savvy geoscience, technology and drilling.

Seals of approval: Venoco's Platform Holly is an ideal spot for basking in the sun and people-watching on a perfect California day.

Venoco calls itself "a different kind of oil company." At local events, for example, it often displays a Toyota Prius hybrid-electric sedan bearing the company motto, Energy, Safety, Community. It's an engaging way to suggest that "green" vehicles and a healthy local E&P industry are part of the same whole.

Venoco has earned grudging respect from many locals, and won awards from civic organizations and praise from government. In 2002, it was named business of the year by three different chambers of commerce. Hundreds of people have taken Venoco's boat tours of the world-renowned natural seeps.

Despite these and others' efforts, opposition, moratoria and lawsuits have kept offshore exploration (not production) here at a virtual standstill since the early 1980s. Meanwhile, opinion polls continue to show high public disfavor for oil companies.

And local elected officials stand firm: "The Central Coast has seen the devastation of an oil spill," congresswoman Lois Capps said in 2001, "and our community views any new drilling as a threat to our environment and economy."

Against these kinds of odds, how does Venoco know its outreach is making a difference?

The answer: feedback.

Officials, teachers and kids who visit facilities send e-mails and thank-you notes, which fill a scrapbook in the home-office lobby. People say positive things at social events. Non-profit groups supported by Venoco have spoken up for the company when criticism seemed unfair.

"The key to getting respect in the community is being in the community," Eson said. "We take people out and show them what we're doing. Most have no idea of what we have to do to operate cleanly. They see how we behave, that we do the right things and go a step beyond rules and regulations."

They see also, Eson added, that oil people "don't have tails and horns."

Friends, Not Enemies

Venoco donates $400,000 to $700,000 each year to charities, Eson said, with a 12-member employee committee screening the gifts. It also maintains a separate budget for energy education and community outreach.

Meanwhile, numerous employees do volunteer work, much of which is on company time, with Eson's blessing.

Karen Robertson-Fall, a former elementary school teacher, directs Venoco's education and community outreach, and she specializes in making sure programs and materials (especially those at www.venocoinc.com) are understandable. Too often, she says, well-meaning scientists and engineers go out to talk about energy, but the audiences can't absorb the technical explanations.

Venoco has taken extra effort to simplify technical jargon and show visually and hands-on how their operations work.

Further, she continued, building relationships requires extra attention to changing needs. For example — what happens if some teachers can't leave the classroom for an offshore tour because there's no money for substitute-teacher fees?

Solution: Venoco covers the fees.

Venoco sponsors beach cleanups and gives away sunscreen packets and sunglasses marked, "made from petroleum."

One recent Saturday, Venoco supported a fair, a fiesta, a festival, two fundraising dinners and a tour. The company shares data and good relations with the local university. It also hands out thousands of desk calendars showing local wildlife co-existing with energy facilities. Company brochures feature real employees, putting a human face on energy.

Venoco has learned what is effective — and what isn't.

Vice president for public and government affairs Mike Edwards has found, for example, that companies seldom make headway by lecturing people about their dependence on oil. True, California consumes more than twice the oil it produces. Spill risk is greater from tankers than offshore platforms. But if consumers don't want to acknowledge the links between offshore oil, gasoline and lifestyle, that's just a fact of oil-business life.

"Inform people and let them decide," Eson advised. "Not everyone is going to approve of what you want to do. That's their right. But they need to have the facts. There are people who don't care what the facts are. But the majority of the public is not like that.

"They want to be informed and make up their own mind."

Facing the Challenges

For Venoco, that includes raising facts that aren't pretty. On tours, Edwards always brings up the 1969 spill, when 80,000-plus barrels fouled 40 miles of coastline. He explains how the oil escaped from a too-shallow casing into an unconsolidated zone, then spewed from the sea floor.

Who could blame people back then for concluding that Mother Nature could surprise Big Oil at any time, with disastrous consequences?

Edwards also shows people the gas bubbling to the surface at the offshore natural seeps near Coal Oil Point — a natural wonder, instead of a natural enemy. He talks about Venoco's huge, submerged "seep tents," which capture gas that would otherwise pollute the air. And he explains that with industry diligence, extensive well casing, improved technology and today's tough regulations, chances are slim-to-none that another 1969 spill could ever happen.

Venoco produces about 15,000 BOE per day, most of it from offshore. To spread risk and raise capital, it wants to sell 50 percent of its wholly-owned offshore operations. The company wants to add more gas, onshore and international properties.

The latest came in Beverly Hills, where legal activist Erin Brockovich (profiled in the 2000 hit movie of the same name) threatened to sue Venoco and prior owners of the oil and gas field, claiming that fumes caused former students to develop cancer. School and air-quality officials are disputing the claims, however, and Venoco has a good relationship with the school and community.

In addition to official commendations for its clean operations, the company recently won kudos for supporting a project to decorate its 165-foot working derrick with artwork from terminally ill children. Called the Tower of Hope, it provides a colorful counterpoint to the negative Brockovich publicity.

Like others at Venoco, Eson has watched the oil and gas community struggle with its negative image for years. He is asked: Is it possible the industry deserves its bad reputation?

"I think we deserve it from the standpoint that we haven't done enough to dispel it," he responds.

Asked if he thinks things will get better or worse, he says, "I don't think it's going to get any easier."

He certainly should know. For example, based on regular interaction with more than a dozen government entities, Venoco believes that its Platform Holly and associated facilities may be the most regulated and inspected oil and gas complex in California. That just might make it the most regulated in the world.

Still, Venoco stays its course.

"We say, 'Come talk to us. We'll show you our operations,'" Eson said. "Early on, we decided we would let people know what we do, open the doors. If somebody sees something they don't like, we'll address those concerns."

So, what would he say to those who may be fed up with trying to convince a hostile public to give the industry the benefit of the doubt?

He smiles.

"I'd encourage them to go into another business, and tell them I'd like to make an offer on their assets," he said. "This is not for the faint of heart."

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