Ryah Cooley

Debate on timing of Hermosa oil election continues

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Two banners hanging over Michael Collins' home, which protest the project, can be seen across the street from the city yard, the proposed location for the oil drilling project in Hermosa Beach. Photo by Isaac Arjonilla, staff photographer.

Two banners hanging over Michael Collins’ home, which protest the project, can be seen across the street from the city yard, the proposed location for the oil drilling project in Hermosa Beach. Photo by Isaac Arjonilla, staff photographer.

E&B Natural Resources formally asserted that it has the right to call the timing of the election for the proposed oil project in Hermosa Beach in a letter sent to the city attorney earlier this week.

Nicki Carlsen, of Alston & Bird LLP, said in a letter to City Attorney Michael Jenkins that “E&B has the right to determine the precise project that is to be presented to the voters — It is E&B’s project, not the City’s project.” The letter also states that an oil election not approved by E&B would be meaningless.

E&B has previously said, in closed session negotiations for the development agreement, that it has the right under the terms of the settlement agreement to dictate the timing of the election. Jenkins has said that nothing in the settlement agreements precludes the city from going forward with a November election for the oil issue. Mayor Michael DiVirgilio said at the State of the City address in May that getting oil on the November ballot was a top priority for the city.

The settlement agreement states that the city has an obligation to “Place on the ballot at a special municipal election in a manner that comports with all applicable law within six 6 months of a request to do so by E&B or as soon thereafter as is permitted by the California Elections Code.”

The city and E&B Natural Resources signed a settlement agreement in 2012 that would allow E&B to call for an election to lift Hermosa’s ban on oil drilling. If successful, the ballot measure would allow E&B to install 30 oil wells at the city’s 1.3-acre maintenance yard.

The agreement calls for the city to repay E&B $17.5 million if the ballot measure fails. E&B loaned the money to the city to help settle a lawsuit with Macpherson Oil. At the time, the city was facing up to $500 million in damages for having restored a ban on oil drilling in 1995 after entering into a lease agreement with Macpherson to allow oil drilling from the city maintenance yard in 1992.

If the project is approved, the city could receive $118 million to $270 million over the 35 years of the project’s life, and Hermosa Beach schools would receive $1.2 million to $2.2 million, according to the cost benefit analysis prepared for the city by Kosmont Cos.

Michael Finch, vice president of health, safety and environmental affairs for E&B, said that more time is needed to ensure quality reports relating to the project and that the company doesn’t see that lining up with a November election. E&B expressed similar sentiments in an open letter to Hermosa Beach residents, which ran in newspapers and on the project’s website last week.

In response to E&B’s letter, the city posted a memo to the agenda for Wednesday’s study session on the Final Environmental Impact Report, which was released on June 10. In the memo, the city states that enough time has been given for the Environmental Impact Report, Cost Benefit Analysis and Health Impact Report. The city gave 60 days for public comment regarding the Draft Environmental Impact Report, when only 45 days were required by law. The EIR is the only report of the three that is legally required to be done before an election can occur. City staff have said that the EIR is on track to be certified by the July 22 deadline.

Jenkins said that the theme of E&B’s letter was that the company felt they “didn’t get their fair shake.”

“I think it’s fair to say the applicant was not treated how they wanted,” Jenkins said. “I also think it’s fair to say that there are a lot of frustrated people in this community and in this room right now.”

At Wednesday’s study session, representatives for Marine Research Specialists, the company that compiled the EIR, said they did not think the deadline for the report was rushed or unreasonable.

DiVirgilio said that the city remains committed to a November election for the oil issue.