The interior of an oil separating tank with a “christmas tree” device awaits final cleaning and re-coating to prevent leaking at E&B’s oil site In Huntington Beach. Photo by Sam Gangwer, Staff photographer.
Residents of Hermosa Beach might be voting on whether or not to allow E&B Natural Resources to drill for oil in their city in March 2015.
City council asked staff Tuesday to come back at its July 22 meeting with a proposal for the election be scheduled in March of next year. E&B had asked for a June 2015 election. Mayor Michael Divirgilio has previously said that getting oil on this year’s November ballot is a top priority for the city. However, E&B claims that that language in the settlement agreement the company the right to dictate the timing of the election and that a November election without its approval would be meaningless.
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.
Both residents who are for and against the proposed oil drilling project said they wanted an election to happen quickly, but they also wanted it done legally so as to avoid a potential lawsuit from E&B.
“I don’t think a lot of members of this community have the time to do this twice,” Hermosa Beach resident Kevin Sousa said.
City Attorney Michael Jenkins has previously said that nothing in the settlement agreement precludes a November election. The documents 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.”
DiVirgilio said that his understanding during negotiations for the settlement agreement was that the language allowed for E&B to prevent the city from delaying the vote on oil — rather than giving the company the power to delay the election indefinitely. Divirgilio said that while he would prefer a November election, March 2015 would be fair to both the city and E&B.
Regarding the timing of the election, E&B President Steve Layton said, “We are committed to resolving that in a manner that is in all of our best interests.”