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Oil drilling in Hermosa Beach? [2012 Newsmaker]

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The mural of Hermosa Beach in 1909 was painted by local artist Chris Coakley on the side of the New Orleans Cafe. Photo by Ed Pilolla

The mural of Hermosa Beach in 1909 was painted by local artist Chris Coakley on the side of the New Orleans Cafe. Photo by Ed Pilolla

E&B Natural Resources of Bakersfield filed its application last month to drill for oil and gas, continuing the nearly 20-year saga of whether or not an oil company will be allowed to dig wells at the city maintenance yard.

E&B arrived on the scene in March as part of a settlement between the city and Macpherson Oil, which claimed Hermosa Beach breached its contract in 1998 when the City Council determined that drilling for oil could be unsafe. Macpherson was seeking up to $750 million in damages and the trial was set to begin in the spring. However, in a deal negotiated to avoid major liability for the city, E&B paid $30 million to Macpherson to have the opportunity to convince voters to support the oil project, and residents will go to the polls sometime in 2014 to decide.

If voters reject the oil proposal, then the city will pay $17.5 million to E&B, which the city would likely finance through a multi-year bond measure. If the voters approve the oil project, the city will owe $3.5 million so long as the project is also approved by the California Coastal Commission, the State Lands Commission, the South Coast Air Quality Management District and the California Division of Oil, Gas and Geothermal Resources.

Residents last voted in 1995 to reinstate the no oil drilling ban. In fact, since 1932, the city has had four votes to decide the fate of oil drilling within city limits.

In 1932, 1958 and 1995, voters shot down oil drilling in the city. The lone vote to support oil drilling and rescind the oil drilling ban came in 1984.

Last week, the city informed E&B that its application needed more information related to parking, lighting, storage, storm water mitigation plans and the company’s proposal for amending the Coastal Land Use Plan. E&B President Steve Layton said that additional material will be provided to the city soon. The city will begin the environmental review process required by the California Environmental Quality Act.

E&B Natural Resources President Steve Layton. Photo by Ed Pilolla

E&B Natural Resources President Steve Layton. Photo by Ed Pilolla

The application breaks the proposed oil drilling project into four phases, including demolishing the site, initial construction and test phase, final construction phase, and a final drilling and production phase.

E&B is hoping to build an underground cellar with up to 30 wells at the city maintenance yard at Valley Drive and Sixth Street. The wells would be able to produce 8,000 barrels of oil and 2.5 million cubic feet of natural gas per day for 30-35 years, according to the application. E&B wants to build an underground oil pipeline from the maintenance yard to 190th Street and into Redondo Beach and Torrance to oil distribution locations.

In a noise impact study included in the application, Behrens and Associates of Inglewood found that noise levels during drilling and production would not exceed an oil code standard of 45 decibels at any residential property in the surrounding area. An air quality impact analysis said construction activities at the site would primarily consist of dust and exhaust emissions that could exceed the South Coast Air Quality District’s standard for significance.

A group of residents called Stop Oil in Hermosa is opposing the oil project. They have raised concerns over property values, traffic, public safety, pollution, ground water contamination and noise. Layton has said the project would be conducted in an environmentally safe manner. A series of public hearings will be held during the environmental review process that will allow residents to voice their concerns or support for the project.


Related: E&B files application to drill for oil in Hermosa Beach

Related: Oil Trail: Crusades over crude oil span generations in Hermosa Beach

Previously: Drilling down into the Hermosa Beach oil deal



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