3.0 ALTERNATIVES 3.1 FACTORS USED IN SELECTION OF ALTERNATIVES Alternatives Development and Screening Process

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1 ALTERNATIVES. FACTORS USED IN SELECTION OF ALTERNATIVES.. Alternatives Development and Screening Process One of the most important aspects of the environmental review process is the identification and assessment of reasonable alternatives that have the potential for avoiding or minimizing the impacts of a proposed Project. In addition to mandating consideration of the No Project Alternative, the California Environmental Quality Act (CEQA) Guidelines Section.(d) emphasize the selection of a range of reasonable alternatives and an adequate assessment of these alternatives to allow for a comparative analysis for consideration by decision-makers. The CEQA requires consideration of a range of reasonable alternatives to the Project or Project location that: () could feasibly attain most of the basic Project objectives; and () would avoid or substantially lessen any of the significant impacts of the proposed Project. An alternative cannot be eliminated simply because it is more costly or if it could impede the attainment of all Project objectives to some degree. However, the State CEQA Guidelines declare that an Environmental Impact Report (EIR) need not consider an alternative whose effects cannot be reasonably ascertained and whose implementation is remote or speculative. The CEQA requires that an EIR include sufficient information about each alternative to allow meaningful evaluation, analysis, and comparison with the proposed Project. This screening analysis does not focus on relative economic factors of the alternatives (as long as they are feasible) since the State CEQA Guidelines require consideration of alternatives capable of eliminating or reducing significant environmental effects even though they may impede to some degree the attainment of project objectives or would be more costly. Likewise, the question of market demand or project need is not considered... Alternatives Screening Methodology Alternatives to the proposed Project were selected based on input from the Applicant, the EIR preparers, and the public and local jurisdictions during the EIR scoping hearings. The alternatives screening process consisted of three steps: Step : Define the alternatives to allow comparative evaluation. March 0 - Ellwood Pipeline Company

2 0 0 0 Step : Evaluate each alternative in consideration of one or more of the following criteria: The extent to which the alternative would accomplish most of the basic goals and objectives of the Project; The extent to which the alternative would avoid or lessen one or more of the identified significant environmental effects of the Project; The potential feasibility of the alternative, taking into account site suitability, economic viability, availability of infrastructure, General Plan consistency, and consistency with other applicable plans and regulatory limitations; and The requirement of the State CEQA Guidelines to consider a No Project alternative and to identify, under specific criteria, an environmentally superior alternative in addition to the No Project alternative (State CEQA Guidelines, Section.(e)). Step : Determine suitability of the proposed alternative for full analysis in the EIR. If the alternative is unsuitable, eliminate it, with appropriate justification, from further consideration. Feasible alternatives that did not clearly offer the potential to reduce significant environmental impacts and infeasible alternatives were removed from further analysis. In the final phase of the screening analysis, the environmental advantages and disadvantages of the remaining alternatives were carefully weighed with respect to potential for overall environmental advantage, technical feasibility, and consistency with project and public objectives. If an alternative clearly does not provide any environmental advantages as compared to the proposed Project, it is eliminated from further consideration. At the screening stage, it is not possible to evaluate potential impacts of the alternatives or the proposed Project with absolute certainty. However, it is possible to identify elements of the proposed Project that are likely to be the sources of impact. A preliminary assessment of potential significant effects of the proposed Project resulted in identification of the following impacts: Potential increase in air pollutant emissions during construction of the pipeline (Air Quality); Ellwood Pipeline Company - March 0

3 0 0 0 Potential change in the risk of an oil spill that would affect marine water quality, marine life, and commercial and recreational fishing (Water Resources, Biological Resources); Potential impacts to terrestrial biological resources due to installation of the onshore pipeline (Biological Resources); Potential change in the risk of an oil spill that would affect terrestrial biological resources (Biological Resources); and Potential change in the risk of an oil spill that would affect recreation in the vicinity of the proposed Project (Recreational Resources). There could also be some potential beneficial impacts particularly those associated with the early decommissioning of the Ellwood Marine Terminal (EMT) and the transportation of crude oil by pipeline instead of barge. For the screening analysis, the technical and regulatory feasibility of various potential alternatives was assessed at a general level. Specific feasibility analyses are not needed for this purpose. The assessment of feasibility was directed toward reverse reason, that is, an attempt was made to identify anything about the alternative that would be infeasible on technical or regulatory grounds. The CEQA does not require elimination of a potential alternative based on cost of construction and operation/maintenance... Summary of Screening Results Potential alternatives were reviewed against the above criteria. A number of alternatives were eliminated based on their inability to meet most of the basic Project objectives or that were technically infeasible due to site-specific constraints. Those alternatives that were found to be technically feasible and consistent with the Applicant s objectives were reviewed to determine if the alternative had the potential to reduce the environmental impacts of the proposed Project. Table - represents the evaluation and selection of potential alternatives to be addressed in the EIR. Those listed in the first column have been eliminated from further consideration (see rationale in Section., Alternatives Eliminated from Full Evaluation), and those in the second column are evaluated in detail in Section.0, Environmental Analysis, of this EIR and are described in detail below. March 0 - Ellwood Pipeline Company

4 Table - Summary of Alternatives Screening Results Alternatives Eliminated from Consideration Offshore Crude Oil Pipeline to ROSF Crude Oil Truck Transportation Onshore Pipeline located south of Highway 0 Alternatives Evaluated in this EIR No Project Alternative Oil Processing on Platform Holly with a New Pipeline to Shore and Onshore Pipeline Route to the PPLP Coastal Pipeline tie-in near LFC Offshore Pipeline Route from the EOF to the PPLP Coastal Pipeline tie-in near LFC Bifurcated Oil and Gas Processing Options: Oil Processing on Platform Holly with an Offshore Pipeline Route to the PPLP Coastal Pipeline tie-in near LFC Oil Processing at LFC with an Offshore Pipeline Route to landfall near LFC Oil Processing at LFC with a New Pipeline to Shore and Onshore Pipeline Route to LFC Notes: ROSF = Rincon Onshore Separation Facility; EOF = Ellwood Onshore Facility; PPLP = Plains Pipeline, L.P.; LFC = Las Flores Canyon; Table - is not an exhaustive listing of potential options that could be arranged. With multiple pipelines, multiple destinations and processing locations, onshore and offshore locations for pipelines, there are numerous potential options and therefore alternatives. The list has been narrowed by addressing both the need for operational efficiency and the need for an alternative to reduce the potential significant impacts of the proposed Project. Therefore, options have been included as alternatives which would lessen the safety impacts at the Ellwood Onshore Facility (EOF) (Holly processing), or reduce the spill impacts to the environment (offshore crude oil pipeline); however, additional environmental impacts may occur with the construction of a new offshore pipeline. 0. ALTERNATIVES ELIMINATED FROM FULL EVALUATION.. Offshore Crude Oil Pipeline to Rincon Onshore Separation Facility Construction of a -mile (. km) long offshore crude pipeline extending from Platform Holly to the Rincon Onshore Separation Facility (ROSF) in Ventura County for crude oil processing (see Figure -) was considered as an alternative to the proposed Project. The oil produced from Platform Holly would be transported to the ROSF through a new 0-inch (0. m) diameter marine pipeline that would connect to the Ellwood Pipeline Company - March 0

5 existing -inch (0. m) diameter sales oil line. Produced gas would continue to be processed at the EOF. Figure - Locations of Project Alternatives As shown in Figure -, the pipeline would follow a route from Platform Holly through State submerged lands to the ROSF. This route is relatively flat and provides for the shortest length of pipe between Ellwood and the ROSF. It also avoids the Federal Ecological Preserve and the associated buffer zone in Federal waters. The 0-inch (0. m) pipeline would leave Platform Holly heading southeasterly in State waters within Venoco's State lease PRC.. The route would continue easterly March 0 - Ellwood Pipeline Company

6 0 0 0 through State submerged lands where it would enter the parcel of State tidelands managed by Santa Barbara County. The County was given control of this section of State land by virtue of a tidelands grant from the State Legislature. The crude pipeline would leave the above-mentioned parcel and continue through ungranted State tidelands where it would make landfall through a,000 foot-long ( m) directional drill. The directional drill would be made from the ROSF to an ocean outfall located approximately,000 feet (0 m) from shore in water depths ranging between feet to 0 feet ( m to m) below mean sea level. The proposed 0-inch (0. m) pipeline would enter a pig receiver at the ROSF and be routed through a sales custody transfer meter and connected to the existing -inch (0. m) sales oil pipeline. This alternative would require dehydration and stabilization of the crude oil at Platform Holly. This alternative was eliminated due to the potential for crude oil spills from the offshore pipeline (due to the increased length and higher volume contained in that increased length), the potential for impacts to marine resources. Finally, landfall would be near the town of La Conchita in an area that is known to be geologically unstable. This geologic instability could lead to a higher risk of pipeline failures and oil spills... Onshore Pipeline Located South of Highway 0 As part of this alternative, the oil produced from Platform Holly, after processing at the EOF, would be transported for sale to refineries through a pipeline. The installation and use of a new onshore pipeline to connect to the Plains Pipeline, L.P. (PPLP) Coastal Pipeline at LFC would allow for the decommissioning of the EMT and cessation of the marine transport of sales oil by barge. The new pipeline to the PPLP Coastal Pipeline would be an extension and redirection of the existing Line, and would follow the Union Pacific Railroad right-of-way, which is located on the south side of Highway 0. Figure - shows the proposed routing of the new pipeline. Facilities, including pig receiver connections, flow metering, and valve connections, would be constructed at the PPLP Coastal Pipeline pump station in LFC to allow the injection of the Applicant s produced oil into the -inch (0.-m) common carrier PPLP Coastal Pipeline for transportation to destinations downstream of the Gaviota Pump Station. This alternative pipeline system would include approximately. miles (. km) of - inch (.-inch outer diameter) pipe manufactured in accordance with API specification L. The pipeline would be coated with fusion bond epoxy and covered with polyethylene outer wrap tape. Raychem shrink sleeves, or equivalent, would be applied Ellwood Pipeline Company - March 0

7 to all pipe field joints. The pipeline would be cathodically protected and would have manual and automatic block valves and associated check valves. Figure - Onshore Pipeline Located South of Highway 0 0 To minimize possible impacts to sensitive coastal resources and to reduce the level of post-construction restoration efforts, the pipeline would be routed within existing railroad rights-of-way and would be installed with a minimum of feet (0. m) of cover. The pipeline system would begin immediately adjacent to the EOF at a new EPI valve box outside the gate. This valve will facilitate the switchover from the existing 0-inch (.-cm) pipeline, which is currently used to ship oil to the EMT storage tanks. The new -inch (.-cm) diameter pipeline would be connected to Line within the Line right of way at a point immediately outside of, and adjacent to, the primary EOF entrance gate, on the west side of the main plant facility. The new -inch (0.-m) diameter pipeline would connect within the existing EOF boundary, downstream of the LACT meter station and pumps. A horizontal directional drill (HDD) would be used to cross under the railroad tracks. Once on the north side of the railroad tracks, the pipeline would use the railroad right-of-way for approximately. miles (. km) west March 0 - Ellwood Pipeline Company

8 0 0 0 of the EOF until reaching a point due south of the new delivery facility on the Tautrim property near LFC. An HDD would be used to cross under U.S. Highway 0 to a point north of Calle Real, on the north side of U.S. Highway 0. From this point, a short segment would complete the pipeline connection to the new PPLP Coastal Pipeline delivery facility. Mainline Block Valves (MBV) would be installed at the start of the pipeline (outside the EOF facility) and at the terminus with PPLP Coastal Pipeline. Additional block valves would also be located on the east side of Eagle Canyon Creek, on the east side of Dos Pueblos Creek, near the intersection of Rancho Cañada and EI Capitan Ranch Road, and near the intersection of Calle Real and Corral Canyon Road. Check valve stations would be installed to prevent reverse flow in the line, and guard against release of product to the environment in case of catastrophic failure or dig-in damage at certain low points. Check valves would be located on the west side of Eagle Canyon Creek, the west side of Dos Pueblos Creek, on the east side of Cañada De La Destiladera, the east side of Winchester/Bell, and near the departure point out of Calle Real near the delivery facility. MBVs and check valves would be accessible from the EOF in approximately 0 minutes. A pipeline leak detection system would be installed that could use a pressure and temperature-compensated flow-metering system, with meters at each end of the pipeline. In addition, low pressure switches would be installed to monitor for low pressure in the pipeline. The inlet and outlet flow rates would be computed and compared continuously to each other by a PLC computer. In the event of a deviation between the inlet and outlet flows, or a substantial loss of pressure at either end, the pipeline would be automatically shut down and blocked in. The PPLP Coastal Pipeline, extending from LFC to Gaviota, is a -inch (0. m) 0,000 barrels per day (BPD) (, m ) capacity line. The pipeline from Gaviota to Pentland is a 0-inch (0. m), 00,000 BPD (, m ) capacity line, which ties into pipelines going south to market destinations at Los Angeles area refineries. This alternative was eliminated due to the potential for this alternative to exacerbate several of the impacts identified with the proposed Project, as well as route-specific impacts associated with this alternative. For example, the pipeline route located along the Union Pacific Railroad right-of-way would be immediately adjacent to the ocean for a majority of the route. Potential spills would easily drain into the ocean and impact sensitive shoreline and intertidal species. In addition, this route passes through Ellwood Pipeline Company - March 0

9 0 0 0 numerous areas with sensitive cultural resources that could not be avoided with minor pipeline rerouting given the limited right-of-way width and available areas suitable for pipeline installation. Pipeline failure due to a train derailment is also possible, as has occurred with other pipelines that are located within railroad rights-of-way. Finally, the route would be more susceptible to coastal erosion processes and landslide potential. Therefore, this alternative offers no real benefit over the proposed Project and was eliminated from further consideration... Crude Oil Truck Transportation This alternative would involve the use of trucks to transport crude oil from the Venoco EOF to a Venoco oil and gas processing facility in Carpinteria where it could be transported to Los Angeles area refineries via an existing crude oil pipeline (see Figure -). Trucks from the EOF would enter Highway 0 at the nearby Hollister Avenue onramp and travel east on Highway 0 for approximately miles (0 km) to Carpinteria. At Carpinteria, trucks would exit the highway at Bailard Avenue, and travel a short distance along Carpinteria Avenue to Dump Road and the Venoco Carpinteria Facility. The total one-way distance traveled by each truck would be approximately miles ( km). The EMT tanks and equipment would not be used for this alternative. As with the proposed Project, the EMT would be decommissioned and Line would be abandoned. Existing tanks at the EOF would be used for buffering of crude oil flows. Three tanks (the two existing crude oil tanks and the oily water tank), with a total capacity of,000 barrels (bbls) ( m ), could be available for storage at the EOF. Under this alternative, a truck loading rack would be constructed at the EOF to accommodate the necessary truck loading requirements. A truck unloading rack would be required at the Venoco Carpinteria Facility to transfer crude oil from the truck to an existing storage tank at the facility. The crude oil would be co-mingled with production from the Venoco Carpinteria Facility and transported via existing pipeline to Los Angeles area refineries. Each tandem truck can hold approximately 0 bbls ( m ) of oil. At the current South Ellwood Field production rate of, BPD (0 m /day) of oil, roundtrip truck trips per day would be required to transport crude oil to Carpinteria. Under the permitted facility capacity of,000 BPD (,0 m /day), truck trips ( one-way trips) per day or to truck trips ( to 0 one-way trips) per hour including peak hours would be required. March 0 - Ellwood Pipeline Company

10 Figure - Truck Transportation Route 0 Since the EOF is located on a property designated in the City s General Plan and zoned as recreation, it is a legal non-conforming facility. Therefore under this alternative, the facility would require a General Plan Amendment and Rezone, both of which would require voter approval under Measure A, to allow for the construction of a crude oil truck loading rack. Therefore, this alternative would not be feasible in the absence of a General Plan Amendment and rezone to change the recreation land use/zoning designations. This alternative was eliminated due to the inability of Venoco to permit a new truck loading rack at the EOF, which is classified as a legal, non-conforming land use. In addition, the risk associated with increased truck traffic, in terms of public safety and oil spills, would be greater than for the proposed Project. Also, air pollutant emissions, especially carcinogenic diesel particulate exhaust, would pose a greater risk to the public when compared to the proposed Project. Ellwood Pipeline Company -0 March 0

11 Bifurcated Oil and Gas Processing Options Alternatives were also eliminated which decreased the operational efficiency of the system. Under existing conditions, propane produced from the South Ellwood Field is combusted in the process heater to allow heating of the crude oil and subsequent removal of the water (dehydration). Operational efficiency is maintained by processing the crude oil and the gas at the same location. For example, processing the crude oil at Platform Holly and gas at the EOF might reduce some impacts at the EOF, but the air quality and energy use impacts would increase as there would no longer be a means of capturing waste heat gathered from combustion of non-carb spec permeate-type waste gases and using this heat for crude treatment. In addition, stabilization of the gases and removal of hydrocarbons produces a gas liquids stream, all of which cannot be mixed with the crude oil due to vapor pressure constraints if the crude oil were processed at a different location. Therefore, processing of crude oil at a location other than the EOF, or where crude oil dehydration occurs on Platform Holly with transportation through the EOF, would potentially require both a new fuel source for crude oil dehydration and reduce overall efficiency, which would increase impacts in other areas, such as the risk associated with truck transportation of natural gas liquids from the EOF. Given the operational inefficiencies of processing oil and gas at separate locations, as well as the inability to blend natural gas liquids into the crude oil for pipeline transportation, the following alternatives do not avoid or substantially lessen potential impacts associated with the proposed Project, and could potentially result in additional significant impacts:. Oil Processing on Platform Holly with an Offshore Pipeline Route to the PPLP pipeline tie-in near LFC.. Oil Processing at LFC with an Offshore Pipeline Route to landfall near LFC.. Oil Processing at LFC with a New Pipeline to Shore and Onshore Pipeline Route to LFC. Therefore, these alternatives have been eliminated from further consideration in the EIR. It should be noted that a similar alternative to the first alternative listed above (Oil Processing on Platform Holly with an Offshore Pipeline Route) was evaluated in the Venoco Ellwood Oil Development and Pipeline (Full Field Development) Project Draft EIR. This alternative, the Las Flores Canyon Processing: Offshore Gas and Offshore Oil Pipeline Alternative, was identified as the environmentally preferred alternative in that March 0 - Ellwood Pipeline Company

12 0 0 EIR because the crude oil and produced gas from Platform Holly would use offshore pipelines to LFC. The oil and gas could be efficiently processed at the existing ExxonMobil LFC facility, and the natural gas liquids could be blended into the crude oil for pipeline transportation. However, since the preparation of the Draft EIR, a reservoir study has indicated that offshore reinjection of produced gas is feasible, would enhance overall crude oil production, and, would not result in repressurization of the reservoir or increases in natural seepage. Therefore, the Recirculated Draft EIR for the Full Field Development Project has identified Crude Oil Processing on Platform Holly with Produced Gas Reinjection, as the new Environmentally Superior Alternative. An alternative similar to those listed above, Oil Processing on Platform Holly with a new Pipeline to Shore, and Onshore Pipeline Route to the PPLP Coastal Pipeline tie-in near LFC, would have the appearance to also bifurcate oil and gas processing. However, this alternative still allows for blending of natural gas liquids into the crude oil pipeline as the line passes through the EOF, and offshore crude oil processing can still utilize waste gases to heat the crude oil, either at platform Holly via a repaired utility pipeline, or in the existing heaters at the EOF. Therefore, while oil and gas processing would take place at different locations, this alternative still allows for the synergistic transfer or intermediate and waste gas products with crude oil processing. Since this EIR only considers potential impacts associated with the proposed crude oil pipeline and alternatives, the produced gas from Platform Holly would continue to be treated at the EOF under all alternatives. Thus, any alternative that does not allow for efficient processing of the produced gas and blending of natural gas liquids would result in additional significant impacts when compared to the proposed Project, and would not substantially lessen or avoid proposed Project-related impacts. 0. ALTERNATIVES EVALUATED IN THE EIR This section provides the descriptions of the alternatives evaluated in the EIR. A comparison of the production life under the various alternatives is provided in Table -. In all cases, Platform Holly is designed to produce through 00. The EMT would be decommissioned and the existing Line abandoned in all cases except the No Project Alternative in which the facilities would be abandoned following the offshore and onshore lease expiration dates and further environmental review. Ellwood Pipeline Company - March 0

13 Facility Table - Production Life Comparison (Abandonment Year) Proposed Project No Project Project Alternative Offshore Pipeline to LFC Processing on Holly with New Pipeline to the EOF and EOF to PPLP Platform Holly EOF EMT/Existing Line Notes:. Platform Holly design life would be to at least 00. Actual abandonment dates would depend on reservoir performance and commodity prices at the time. Most processes at the EOF under this alternative such as the gas processing system, crude oil storage and pumping, and electrical substation, would remain at the EOF site for the duration that Platform Holly is in operation. The offshore lease with SLC expires in 0 and the onshore lease with UCSB expires in 0. Alternate transportation options would need to be implemented at that time. Source: Venoco Application, February No Project Alternative 0... Description Under the No Project Alternative, production from Platform Holly and the EOF would continue under current operations in the near term, with all shipments restricted to double-hulled barges loaded at the EMT. However, the EMT offshore lease with CSLC expires on February, 0, although the EMT continued to operate for six years beyond their 00 lease expiration through year-to-year lease extensions until a new lease was signed in 00. The onshore lease with UCSB terminates on January, 0 with a requirement to have removed all tanks, equipment, installations, wastes, and debris from the site, including subsurface areas, six months after termination. The potential fate of current operations in the long-term can be classified thusly for purposes of this EIR: Venoco could seek additional extensions to the terms of its current onshore and offshore EMT leases with UCSB and CSLC, respectively, for a period that would allow it to recover enough hydrocarbon resources to meet its investment-backed The CSLC has extended the leases of several marine terminals, such as Shores Terminal and the El Segundo Marine Terminal, beyond their lease while environmental review was conducted to evaluate potential impacts associated with lease renewal. An analysis of alternative transportation options to the EMT is provided in the EMT Lease Renewal EIR (CSLC, 00), which considered truck transportation or a pipeline similar to the onshore pipeline route in this proposed Project (Section.0, Project Description). March 0 - Ellwood Pipeline Company

14 expectations, which Venoco projects to be the year 00. This fate is considered unlikely for the purposes of this EIR, because UCSB has stated on record that it would not grant any extension to the term of leases beyond 0. 0 Venoco could seek to extend only the offshore EMT lease with CSLC, and modify its offshore operation to transport crude oil directly from Platform Holly. The existing EMT moorings could be utilized with a new pipeline constructed from the EOF or Platform Holly. A new pipeline could be constructed from Platform Holly, but would require a barge to be continuously present at the mooring since there is only minimal crude oil storage (actually surge) capacity on the platform. The most efficient marine terminal design would be to locate a new Single Anchor Leg Mooring (SALM) adjacent to Platform Holly and a short loading line between the platform and SALM. This design would also require a barge to be continuously present, and would be somewhat analogous to the Offshore Storage and Treatment (OS&T) vessel that used to be moored adjacent to Platform Hondo approximately. miles from shore, but on a smaller scale. This option under the no project alternative appears unlikely given its substantially higher costs. 0 Venoco could seek appropriate permits from the City of Goleta and the California Coastal Commission to ship all crude oil processed at the EOF via highway. This alternative would require some modification to the EOF to accommodate loading of crude oil tanker trucks. This alternative, as a permanent mode of transporting crude oil to refineries, has been eliminated from further consideration in this EIR as explained in Section... 0 Venoco could seek appropriate permits from the CSLC, Coastal Commission, and the County of Santa Barbara to ship all crude oil produced from Platform Holly to Las Flores Canyon via a pipeline installed offshore to landfall south of the canyon. This alternative may require some processing of oil at the ExxonMobil consolidated oil processing site. It would also bifurcate oil and gas processing options an alternative that is eliminated from further consideration in this EIR as explained in Section... Venoco could seek appropriate permits from the CSLC, Coastal Commission, and County of Santa Barbara to take crude oil production directly to Las Flores Canyon from Platform Holly and re-inject gas production into the offshore reservoir. The likelihood of this option occurring is unclear; however, it would cost Ellwood Pipeline Company - March 0

15 Venoco substantially more, due to the higher costs of installing an offshore pipeline (compared to the proposed project). 0 0 Venoco chooses to abandon production at Platform Holly prematurely (i.e., permanent cessation of use), including abandonment of the EOF. This option is judged to be unlikely for purposes of this EIR, because Venoco retains a vested right via its oil and gas leases with CSLC and its permits to operate until end of South Ellwood field s economic life, unless the City chooses to end the EOF s life earlier via amortization. Otherwise, any action by government to terminate production from Holly prior to the end of its economic life would require payment of just compensation to Venoco for loss of years of revenue it would have earned by continuing production of the South Ellwood field. The economic life of the operation is defined as the period of time during which Venoco, or any successors, is able to produce commercial quantities of hydrocarbons. If production was terminated prior to the end of economic life, that portion of market demand for oil and gas that is satisfied by South Ellwood Field production would have to be replaced by alternative energy sources (either other oil and gas developments or alternative energy strategies), or through energy conservation (See Section., Energy Conservation and Alternative Energy Sources) should the South Ellwood field permanently cease production prior to the end of its economic life.... Required Agency Approvals Agency approvals including additional environmental review under the No Project Alternative would be required for any proposed alternative transportation mode that would be necessary as a result of the termination of the EMT lease and decommissioning of the EMT... Offshore Pipeline Route from the EOF to the PPLP Coastal Pipeline tie-in near LFC 0... Description This alternative would involve continued oil and gas processing at the EOF, and construction of a new -mile (-km) long offshore crude oil pipeline between the EOF and LFC (see Figure -).. The new, -inch (0. m) pipeline would leave the EOF heading westerly through State waters to a point offshore of LFC. Landfall would be March 0 - Ellwood Pipeline Company

16 achieved by directional drilling,00 feet (,0m) from the LFC parking area north of Highway 0 to an ocean outfall located approximately,00 feet ( m) from shore in water depths ranging between feet to 0 feet ( m to m) below mean sea level. This alternative would avoid many of the potential impacts associated with construction and operation of the proposed onshore pipeline, such as onshore biological and cultural resources, but would substantially increase offshore oil spill risk, and offshore biological resource impacts. Installation of the offshore crude oil pipeline would entail the following planning and construction activities: 0 Pre-installation surveys; Barge laying of pipeline; Directional drilling at the EOF and LFC coastal locations; and Tie-in to EOF and PPLP Coastal Pipeline. 0 0 Pre-installation surveys would involve identification of ocean bottom features using multi-beam sonar, side scan sonar, and sub-bottom profilers to accurately determine the best pipeline route. Seafloor surveys would also identify sensitive areas (areas of hard bottom habitat) and/or man-made obstructions (wrecks, other pipelines, cables, etc.). Barge-laying of the pipeline would involve a lay barge approximately 00 feet to 00 feet (00 m to 0 m) long equipped with winches and anchor gear to ensure steady and precise movement along the pipeline laying route. All pipe materials would be delivered to the barge by supply boats. The pipe would be assembled into a continuous string on the lay barge. Onshore staging areas for the loading of pipe onto supply vessels for shipment to the lay barge would be required and would most likely be located in Port Hueneme. An estimated 00 truck trips would be required to deliver the pipe to Port Hueneme. The pipeline would be placed on the ocean floor. Directional drilling from EOF and LFC to the ocean outfall locations would involve similar equipment as the Dos Pueblos Canyon directional drill described in the proposed Project (Section.0, Project Description). The timeframe to install the directional drill is estimated to be to 0 days at each location, requiring a total of about,000 ft ( m ) of drilling fluid. Ellwood Pipeline Company - March 0

17 Figure - Alternative Offshore Pipeline Route March 0 - Ellwood Pipeline Company

18 It is estimated that the pipeline installation, including the directional drilling, would take about two months. Approximately 0 persons would be employed for offshore construction, and an additional 0 to 0 people would be required for installation of the directional drill at the LFC. Offshore equipment requirements would include cranes, welding machines, water pumps, compressors, x-ray equipment and winches. The directional drilling equipment requirements would be similar to those described in the proposed Project (Section.0, Project Description) Required Agency Approvals Agency approvals necessary under this alternative would include permits for any improvements at the EOF, if required. These would include: Santa Barbara County; Santa Barbara Air Pollution Control District (SBAPCD); City of Goleta; California Coastal Commission (CCC); California State Lands Commission (CSLC), California Public Utilities Commission (CPUC); California Department of Fish and Game (CDFG), Office of Oil Spill Prevention and Response (OSPR); 0 California Department of Fish and Game, Marine and South Coast Region; California Department of Transportation; California State Fire Marshall (CSFM); Central Coast Regional Water Quality Control Board (RWQCB); U.S. Environmental Protection Agency (EPA) Region IX; U.S. Fish & Wildlife Service (USFWS); U.S. Army Corps of Engineers (USACOE); and U.S. Coast Guard (USCG). Ellwood Pipeline Company - March 0

19 .. Oil Processing on Platform Holly with a new Pipeline to Shore, and Onshore Pipeline Route to the PPLP Coastal Pipeline tie-in near LFC... Description This alternative would involve moving the crude oil processing from the EOF to Platform Holly and involve new pipeline and utility line construction. It would entail the following components: Installation of a new pipeline between the EOF and PPLP tie-in (this would be the same as the proposed Project); 0 Abandonment of the existing Line between the EOF and EMT (this would also be the same as the proposed Project); Installation of crude dehydration and stabilization equipment on Platform Holly; Removal of associated equipment at the EOF; Construction of a new pipeline between Platform Holly and the EOF; Installation of a new power cable to Platform Holly; Repair of the existing utility pipeline between the EOF and Platform Holly. 0 0 Some processes would remain at the EOF, including gas processing, crude oil storage and pumping, the electrical substation and sales gas compression. The crude pipeline to the PPLP Coastal Pipeline would still be installed for transporting the crude oil to area refineries. In February and December of 00, Venoco submitted an application to the CSLC and the County of Santa Barbara to fully develop the South Ellwood Field by expanding the lease boundary, transporting crude oil/emulsion to Ventura through an offshore pipeline, and conducting all gas processing at Platform Holly. The EOF would have been decommissioned except for the electrical substation, the control room and the sales gas compression. The 00 application included extensive engineering analysis of the equipment and modifications that would be required at Platform Holly, including spacing, deck and jacket modifications, and approximate costs. Much of the 00 analysis has been used in the following discussion. This alternative is also similar to the relocation option identified in the 00 Santa Barbara County amortization analysis, which included gas processing and crude oil March 0 - Ellwood Pipeline Company

20 0 0 0 treatment on Platform Holly with crude oil transportation via pipeline to the PPLP Coastal Pipeline. Based on the economics of the year 00 when crude oil and gas had substantially lower prices than at present, this alternative was determined in the amortization study to be the only economically feasible relocation option for the EOF and the EMT. The economic feasibility issue may have shifted significantly with the increase in oil prices, allowing for the feasibility of other alternatives as presented in this document. However, review of this alternative continues to be relevant to this environmental impact analysis and is provided below. As in the proposed Project, construction of the crude oil pipeline from the EOF to the PPLP Coastal Pipeline, decommissioning of the EMT and existing Line would still take place. This alternative still allows for blending of natural gas liquids into the crude oil pipeline as the line passes through the EOF, and offshore crude oil processing can still utilize waste gases to heat the crude oil, either at platform Holly via a repaired utility pipeline, or in the existing heaters at the EOF. Therefore, while oil and gas processing would take place at different locations, this alternative still allows for the synergistic transfer or intermediate and waste gas products with crude oil processing.... Platform Holly Crude Oil Processing Processing of crude oil at Platform Holly would involve removal of water at Platform Holly and injection of all of the water into an injection well at the platform. Current operations at Platform Holly involve the removal of the majority of water (about 0 percent) from the emulsion in the existing -phase separators and injection of the water into an injection well. Current EOF crude oil processing involves the removal of additional water and stripping the crude oil to remove some of the residual H S. Stripping involves passing sweet gas through the crude oil to remove some of the residual H S. EOF crude oil, once fully processed, has a water content of less than three percent water. Additional equipment and processes would need to be installed at Platform Holly in order to reduce the crude oil water content to below three percent. The various offshore components are summarized in Table -. Oil dehydration on Platform Holly would be achieved by utilizing the existing threephase separator and installing additional dehydration facilities including: Oil heater/exchanger, using Therminol to heat up the crude oil and remove some of the water (primary separation); Ellwood Pipeline Company -0 March 0

21 Heat exchangers, to capture some of the treated crude s thermal energy and transfer it to the incoming crude; Degassing vessel to allow some residence time for trapped gases to flash off from (come out of) the crude oil; H S stripping column, to remove some of the residual H S; and Electrostatic treater, to enhance gravity separation of the water from the crude oil. Table - Platform Holly Processing Alternative Components Option Platform Holly Processing EOF Modifications Crude: Offshore crude oil processing, pipeline to EOF and PPLP Coastal Pipeline. Utilities Crude oil dehydration and stabilization. Deck space: 00 ft² to 00 ft² ( m² to m²). Therminol: 00 ft² ( m²). Water treatment: 00 ft² to 00 ft² ( m² to m²). Propane refrigeration: 00 ft² to 00 ft² ( m² to m²). Remove crude stripping, water separation/heating. Crude storage, pig processing and pumping would remain at the EOF. Removal of Therminol, heaters, water treatment facilities. Control building and electrical substation would remain. 0 0 Historically, crude oil H S concentrations, before stripping at the EOF, have ranged from parts per million (ppm) to ppm. In 00, they averaged 0 ppm (Santa Barbara County APCD 00). A stripping column on Platform Holly would be necessary for the crude oil to meet the PPLP Coastal Pipeline crude specifications of 0 ppm without incurring additional tariff charges. The addition of the above listed crude processing equipment on Platform Holly would eliminate the need for crude oil/emulsion treatment at the EOF. This alternative assumes that the onshore pipeline is constructed with a tie-in to the PPLP Coastal Pipeline, as described in Section.0, Project Description. Intermediate oil storage would be retained at the EOF. The existing two,000 bbl oil storage tanks at the EOF would be sufficient for this purpose. In addition, crude pumping from the EOF to the PPLP Coastal Pipeline and pig catchers (from Platform Holly) would also remain at the EOF to allow for pigging the pipeline between the EOF and Platform Holly. March 0 - Ellwood Pipeline Company

22 Pig launchers would need to be installed on the crude oil line at the EOF for pigging between the EOF and the PPLP Coastal Pipeline tie-in. Deck spacing required for the installation of the crude oil processing equipment on Platform Holly is estimated to be about 00 ft to 00 ft ( m to m ).... EOF Configuration Under this alternative, some equipment could be decommissioned and removed at the EOF, but the following equipment would still be required: 0 All gas processing equipment; Oil storage tanks totaling,000 bbls ( m ) (the two existing tanks); Crude oil and gas pig receivers; and Crude oil pumping and metering equipment; Equipment that could be removed would be associated with crude oil treatment, and would include the following: Oil/water separation facilities; Water treatment facilities; and Incinerators. 0 0 However, Venoco would likely retain this equipment in order to provide a backup treatment capability for Platform Holly, and the incinerators may be required to provide additional crude oil heating capability since the crude oil from Platform Holly would have cooled substantially due to heat loss during subsea pipeline transport. Therefore, it is unlikely that crude oil treatment at Platform Holly would result in a noticeable change in the EOF footprint.... New Offshore Pipeline The existing Platform Holly oil pipeline is a -inch (0.-m) pipeline approximately.0 miles (, m) in length that transports the oil/water emulsion from Platform Holly to the EOF. The Platform Holly oil pipeline is -years-old,.-inch (outside diameter) API-Grade B type steel with a nominal wall thickness of 0.0-inches. It has a Specified Minimum Yield Strength (SMYS) of,000 psi and a Maximum Allowable Operating Pressure (MAOP) of 0 psi based on the hydro-test pressure of approximately,000 psi. The normal operating pressure of the pipeline is approximately 00 psi. Venoco Ellwood Pipeline Company - March 0

23 0 0 0 has been equipping Platform Holly to separate and inject most of the water produced with the oil on the platform. Therefore, the total fluid volumes are decreasing and the fluid is, in effect, going to be non-corrosive crude oil. The June 00 inspection of the crude oil emulsion pipeline identified extensive corrosion, primarily internal and found along the bottom half of the pipeline, ranging in wall loss from 0 percent to. percent (the survey graded the anomalies 0 percent or greater). There were a total of,0 metal loss group anomalies (greater than 0 percent metal loss) with Internal/ Internal. All six defects, greater than 0 percent wall loss, were external. The worst wall loss (. percent) was located about feet from the Platform. However, these anomalies did not affect integrity of the pipeline. Based on the evaluations conducted on the wall losses, the maximum allowable operating pressure for the offshore crude/emulsion pipeline was determined to be, psig for the pipe only; the flanges are limited to,0 psig (0 MPa). The applicant has established a maximum operating pressure of 0 psig with the CSLC required hydrostatic test (,000 psig). A deformation Pig inspection conducted in June 00 identified one dent with. percent ID (internal diameter) reduction. An inline inspection conducted in June 00, provided data used to analyze the pipe per ASME BG (Manual for Determining the Remaining Strength of corroded Pipelines) or RSTRENG Program-AGA Research Committee Project PR--0 [A Modified Criterion for Evaluating Remaining Strength of Corroded Pipelines (December )]. Majority of pipeline operators (including Venoco) use the RSTRENG Program which is less stringent than the BG. These are accepted standards for the pipeline industry, the CSFM and the US Department of Transportation in assessing existing pipelines. According to these standards, if the measured maximum depth of corroded area compared to nominal wall thickness is greater than 0 percent, then the pipeline segment is recommended for repair or replacement. If the measured maximum depth of corroded area, compared to the nominal wall thickness, is between 0 percent and 0 percent, then these manuals provide procedures and calculations to establish a safe maximum operating pressure [ CFR.(h)()(b)]. Based on corrosion anomalies/defects found during the most recent inspection, none of the defects warranted repair or replacement. The calculations indicate that the Platform Holly pipeline rupture pressure for the worst defect found in the pipeline is, psig which is. time more than the established MAOP and. times greater than the normal operating pressure of the pipeline. March 0 - Ellwood Pipeline Company

24 0 0 In May 00, sub-sea pipeline inspections were conducted on the pipeline bundle and Seep Tent to Shore Pipeline, utilizing a Hysub 0 Remotely Operated Vehicle (ROV). In general, the surveys concluded that the pipelines were found to be in excellent condition with no damage or excessive spans. All cathodic potential were found to be within the acceptable criteria. One noteworthy observation was the presence of an abandoned anchor and chain wrapped around the Seep Tent pipeline. This is an example of the type of third party damage that can occur on unburied sub-sea pipelines. The 00 ROV report did identify a clamp installation on the pipeline bundle. Actually, clamps were installed on the oil pipeline and the utility pipeline. The 00 Smart Pig survey anomaly confirmation inspection (conducted in December 00) showed external corrosion anomalies on oil, gas, utility and utility with Plidco clamp. The Smart Pig survey identified the oil pipeline anomaly at %. The anomaly was confirmed with % metal loss. These anomalies were possibly due to the power cable drag. All anomalies on the pipelines were covered with coating lumps. A Plidco clamp was installed on the oil pipeline. The anomalies on the gas and other pipelines were cleaned and recoated with Splash Zone Epoxy. As per communication with the DOT (DOT 00), the offshore emulsion pipeline is under the jurisdiction of the CSFM and the CSLC. The Platform Holly pipelines are inspected internally every year per CSLC regulatory requirements to monitor the changes in the corrosion. If any survey shows a corrosive anomaly of 0 percent or greater wall thickness loss, then the CSLC would immediately de-rate the MAOP and require Venoco to inspect and repair the weakened section of pipe. The pipeline if currently classified as fit for service by the CSLC with internal corrosion being controlled through the injection of corrosion inhibitors; however, it is identified for replacement under this alternative to address long-term utilization. This alternative would require that existing Platform Holly oil pipeline be replaced due to the pipeline corrosion issues discussed above. Installation of the offshore crude oil pipeline would entail the following planning and construction activities: 0 Pre-installation surveys; Modifications to Platform Holly; Barge laying of pipeline; Directional drilling at the EOF coastal location; and Tie-in to PPLP Coastal Pipeline. Ellwood Pipeline Company - March 0