Muratsuchi bill would loan Hermosa tideland funds for oil payment
A bill that would enable the City of Hermosa Beach to borrow $17.5 million from the State Tidelands Funds in order to help the city keep its ban on oil drilling is being proposed by Assemblyman Al Muratsuchi (D-Torrance).
Last year the city and E&B Natural Resources signed an agreement that would allow E&B to call for an election as soon as November to lift Hermosa’s ban on oil drilling. 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 abrogated a 1984 agreement with MacphersonMacperson to allow oil drilling from the city maintenance yard.
Muratsuchi, who is seeking reelection on the November ballot, announced the Hermosa Beach Tideland Oil Revenue Loan Bill (AB 2711) at a press conference Friday morning at the Hermosa Beach pier.
“I want citizens to live without fear of financial consequences if they maintain the ban,” Muratsuchi said.
E&B responded with a statement that described the proposed bill as unnecessary.
“During the past two years, city officials and community activists have consistently and forcefully stated that the City has the financial capacity necessary to repay the $17.5 million loan E&B provided. This loan allowed the City to avoid bankruptcy and to end 14 years of litigation with Macpherson Oil,” the statement noted.
Joining Muratsuchi at Friday’s press conference was State Senator Ted Lieu (D-Torrance). Lieu promised to “floor manage” AB 2711 in the Senate.
“I can’t think of anything more stupid than to do oil drilling in Hermosa Beach,” said Lieu, who is a candidate in the November election for the 33rd Congressional District seat.
Should AB 2711 become law, the city would be obligated to repay the interest-free $17.5 million loan at a rate of $500,000 per year until the loan is repaid. Muratsuchi said the repayments would go to the State Coastal Conservancy Trust Fund, to be used for its Climate Ready Program.
Hermosa Beach councilwoman Nanette Barragan said at the press conference that Hermosa will have to expend upwards of $50 million to prepare the city maintenance site for drilling if the ban is lifted.
Also speaking in support of the bill were representatives of Heal the Bay, Los Angeles Waterkeepers, Surfrider, Earthworks, South Bay 350 and Stop Hermosa Beach Oil. ER