[Editor’s Note: Here are the prepared remarks of former Culver City Mayor Andy Weissman, pertinent to the Inglewood Oil Field, delivered this afternoon in Hermosa Beach. He testified before the State Assembly Committee on Environmental Safety & Toxic Materials for the Investigative Hearing on Oil Drilling and Production Hazards.]
I am a member of the City Council for the city of Culver City, and have had the honor of serving as Mayor of the city until my term expired on Monday.
The Baldwin Hills Oil Field encompasses about 1000 acres. About 90 percent of the oil field is located in unincorporated Los Angeles County, much of it abutting Culver City, including several of our residential neighborhoods. The remaining 10 percent of the oil field actually lies within the Culver City limits.
As a result, Culver City has been active in the regulation of the oil field, not only within its own boundaries, but also active in ensuring that the County’s regulation of the oil field is protective of our community and the environment.
I will talk about our involvement in both, beginning with the County’s regulation of the oil field.
County Regulation of the Baldwin Hills Oil Field
It appeared to many that by the late 1980s and into the ‘90s, the Baldwin Hills Oil Field had been nearly tapped out. Production had dipped considerably, and the drilling of new wells had almost stopped.
Then, in or around 2003, through seismic testing, PXP apparently determined that valuable oil reserves remained under the field, particularly at more significant depths.
Commencing in about 2005, there was a significant increase in the number of wells being drilled in the County portion of the field. Residents complained of the noise and odors.
In January 2006, while drilling several thousand feet down, PXP apparently hit a pressurized pocket of gas that spewed drilling muds and gases to the surface.
The noxious odors and fumes triggered numerous complaints not only in the adjacent residential neighborhoods, but from as far as two miles away.
This was followed by a similar incident just a few weeks later.
As we investigated the incident, we learned that PXP was embarking upon one of the most extensive drilling programs anywhere in the state, in the middle of a densely populated urban residential environment, all without the review of potential environmental impacts that is required by the California Environmental Quality Act, known as “CEQA.”
We learned that Los Angeles County’s antiquated zoning code required no permits for drilling oil.
The state’s Dept. of Oil, Gas and Geothermal Resources (known as “DOGGR”) does require permits. But these were issued to PXP without the required review under CEQA.
We urged DOGGR to cease issuing permits without the appropriate CEQA review, which DOGGR ultimately agreed to do.
The city then met with the County and urged the County to take responsibility to ensure that these extensive drilling operations in the middle of our community be properly regulated and adhere to the same environmental requirements that every other project must follow under CEQA.
We could not understand why a neighborhood shopping mall would be required to prepare an Environmental Impact Report (known as an “EIR”), yet no EIR was required for the drilling of oil wells within a few hundred feet of residential neighborhoods, schools and parks — particularly when such drilling had already caused harm to public health and safety.
The County eventually imposed a moratorium on new drilling while creating a zoning overlay district known as a Community Standards District.
The County developed new oil and gas regulations under an ordinance which I will refer to as the CSD Ordinance or CSD.
The County prepared an EIR for the CSD Ordinance that ostensibly looked at the potential impacts from the hundreds of new wells and other operations.
Unfortunately, while Culver City really helped start that process, we were not included in it.
The County did not consult with the city in the preparation of the EIR nor its CSD.
After many hearings and revisions of the CSD Ordinance, the County approved the CSD and EIR over the objections of Culver City and community and environmental groups.
While the CSD improved the oil field regulations in many respects, we believe it failed to include what was necessary to protect the environment and human health and safety, in part because the EIR itself fell far short of accurately identifying the environmental impacts from the project and how to mitigate those risks.
In order to protect the health and safety of the community, Culver City determined it had to file a lawsuit to challenge the approval of the CSD and EIR and send the EIR back to the County so it could be done right.
Culver City was joined by a number of community groups and citizens including: Concerned Citizens of South Central Los Angeles, Community Health Councils, Inc., Natural Resources Defense Council, Mark Salkin and Citizens’ Coalition for a Safe Community
Shortly after the County approved the CSD and EIR, Mark Ridley-Thomas was elected as the County Supervisor for the Second District, which includes the Baldwin Hills Oil Field.
Unlike his predecessor, Supervisor Ridley-Thomas recognized the CSD’s shortcomings.
Supervisor Ridley-Thomas requested, and the entire Board agreed, to take another look at the CSD Ordinance and how it can be more protective of human health, safety and the environment. We continue to be hopeful that revisions to the ordinance will be forthcoming, but, in the absence of any resolution, we had to persevere with the litigation.
PXP has been very aggressive in the CSD litigation, at great costs to the city.
Indeed, PXP vigorously sought to have the case dismissed without a hearing on the merits.
The Court rejected PXP’s efforts and it is now set for trial on June 3, 2010.
Some of the examples of the issues that we are challenging include these:
1. The CSD does not provide for any environmental review of any future oil well drilling. Rather, the way the County structured the CSD Ordinance, the approval of the CSD itself constitutes the one and only County approval for hundreds of new wells for decades to come.
2. The EIR failed to consider air quality impacts from future drilling operations on the flawed theory that it would not be worse than the emissions from the significantly increased drilling operations in 2005 and 2006 that were not subjected to any mitigation under CEQA.
3. The CSD Ordinance allows drilling operations to increase noise levels in residential neighborhoods that exceed those allowed in commercial areas and even construction areas.
4. The EIR failed to meaningfully consider directional or slant drilling — a conventional and well-used technology — as an alternative to drilling within a stone’s throw of residential neighborhoods.
5. The EIR predicted that the risk of an oil spill reaching a waterway could only occur once every 5200 years but failed to address that such a spill was not only much more likely to occur but actually did occur in March 2008 during the preparation of the EIR. In March 2008, there was a spill from a pipeline, which flowed into the storm drains leading into Ballona Creek.
6. The EIR predicted an increased cancer risk, above and beyond that from current operations, of nearly 10 in 1 million residents exposed, but decided, without any justification, that such a risk was so “insignificant” that it did not require mitigation.
7. The County Board of Supervisors found that 167,000 tons of new greenhouse gas emissions that the increased operations at the oil field will generate was “insignificant” and need not be mitigated. 167,000 tons. This is the equivalent of about 40,000 new cars on the road every year. In contrast, the California Air Resources Board has proposed 7,000 tons of greenhouse emissions as a significance threshold if the project meets certain performance standards.
Importantly, we should note that the parties are now engaged in settlement discussions.
Supervisor Ridley-Thomas’s office has been very active in leading these settlement discussions. The California Attorney General’s office has acted as a mediator given the important public interests at stake.
The city is very confident in the merits of its position, but believes that a negotiated settlement that adequately addresses the city’s health and safety concerns, presents the opportunity for a better outcome for all the parties.
We are hopeful that this process will lead to a constructive resolution of our concerns.
City’s Regulation of Oil Operations Within City Limits
Now, let me address the regulation of oil operations within the city’s own jurisdiction.
Before all the controversy arose over the County portion of the oil field, the city had begun to look at its own oil ordinance regulating oil and gas operations. We recognized that it needed to be updated.
The city has about 25 operating wells within its city limits. No new wells have been drilled since 2002. In late 2005, we began the process or revising the ordinance and sought to work collaboratively with PXP to do so.
However, with the events in 2006 resulting in the release of noxious gases to our neighborhoods, we realized there was much we did not know about the environmental and public health risks of oil drilling.
We suspended our own efforts to allow the County’s process of developing the CSD Ordinance to proceed.
We had hoped that the city could learn more about the environmental risks through the County’s environmental review, and the resulting EIR, and emulate an ordinance adopted by the County so that there would be consistent, safe and protective regulations throughout the Baldwin Hills Oil Field.
We hired a consultant experienced in the field to help us with the process and to identify and address the risks and issues unique to Culver City.
However, in the middle of the litigation over the CSD, before Culver City completed its analysis, much less promulgated a revised drilling ordinance, PXP obtained drilling permits from DOGGR to drill three new wells in Culver City, near Culver City Park.
We were caught by surprise by this. PXP had not consulted us. Our ordinance had not been revised.
The County’s EIR had identified a number of major environmental, public health and safety concerns that had to be addressed and mitigated, and we had no ordinance in place to address such risks or to even require the limited mitigation recommended in the County’s EIR.
In order to allow us time to develop our new regulations, which could include a change to our zoning regulations, we promptly adopted a moratorium under California Government Code section 65858.
Just as promptly, PXP sued the city to lift the moratorium. PXP not only sued the city, but its individual Councilmembers and even tried to take their depositions – which was refused by the court.
PXP did not want to give the city time to develop its own more protective regulations.
PXP took the position that the city could not limit new oil drilling on land where PXP already had wells because PXP claimed to have a vested right to drill new wells — as many as it wanted.
Under PXP’s theory, once a city allows land to be used for one well, a city has no right to limit or regulate the drilling of new wells.
After a trial on the merits, Judge Chalfant correctly rejected PXP’s vested rights claim and the other arguments it asserted.
Judgment was entered in the city’s favor just a few days ago.
Within days after the trial concluded, PXP sued the city again, claiming that the city did not have the discretion to condition drilling permits because of its vested rights — rights which the Court has now rejected.
Lessons Learned
The Court’s rejection of PXP’s misplaced vested rights claims in our case is important.
PXP made similar vested rights arguments to the County as leverage to gain a more favorable CSD Ordinance. And the arguments had an effect.
The County felt constrained in its ability to regulate the drilling of new wells because of PXP’s arguments that it had vested rights that it would sue to enforce.
We trust that the County of Los Angeles will take note of Judge Chalfant’s decision as it looks to make the CSD more protective.
When we discuss local oversight of oil operations, the risk of expensive litigation by deep-pocketed oil companies is the elephant in the room.
For budget-strapped municipalities, such litigation can be crippling.
In our case, we felt that the public health and safety concerns had to be protected.
We stood up to PXP, and the court vindicated our position.
Other municipalities or counties may not choose to do so, and while regrettable, it is understandable.
Cities like ours with limited resources are left to protect important public interests in public health, safety and the environment.
But the threat and cost of litigation may force cities to choose between protecting these important interests and having enough funds to provide the essential public services that we do.
You have asked us to provide suggestions on how the state can assist local entities in providing better oversight and regulation of oil drilling operations. These are our suggestions:
1. We propose that California undertake a comprehensive study of the environmental, health and safety risks from drilling wells in urban and suburban environments.
For example, we need to understand the risks of long-term exposure to low levels of hydrogen sulfide emissions from petroleum operations.
It is asking too much to ask local agencies to fully study, understand and assess these complex technological issues with the limited resources at their disposal.
And, as we have found, it is very difficult to find experts in the petroleum production field willing to take a position that is adverse to a big oil company, such as PXP.
This state study will assist local agencies in their local land use and regulatory decisions and the preparation of their own environmental documentation of the local risks under CEQA.
The state study should also look at the feasibility of established, new and developing technology in mitigating environmental risks, such as directional drilling, electrified drilling rigs and the like.
2. The oil field operator, under the oversight of local air districts, such as the South Coast Air Quality Management District, should be required to provide on-site monitoring and borderline monitoring of toxic emissions such as hydrogen sulfide, benzene and particulate emissions.
3. DOGGR, as the state agency most directly responsible for regulation and permitting of oil production facilities, must consider the potential environmental impacts of oil operations under CEQA.
In the absence of another lead agency, DOGGR must take the lead agency status and discharge its obligations vigorously.
As a responsible agency, it should fully participate in the process and lend its considerable expertise to assuring that potential environmental impacts are understood and mitigated.
Too often, DOGGR fails to undertake any CEQA review at all.
4. We propose that the state legislatively clarify that the so-called “diminishing asset” doctrine clearly does not apply to petroleum extraction. The “diminishing asset” doctrine has been exclusively applied to quarrying operations to create a vested right in mining the entire property.
Yet, PXP argued that it should also apply to petroleum, creating a “vested” right to drill as many wells as they want without condition.
While the argument is absurd, the city was forced to spend a good deal of money to establish the nonsense of it in court.
And we can expect that PXP will force us to do the same before the Court of Appeal.
A legislative clarification would put an end to the absurdity.
5. Drilling rigs should be regulated by local agencies, just like any other stationary source. Currently portable rigs, and almost all are portable, are only regulated by the state.
The same regulations apply to drill rigs operating in remote rural counties as to drill rigs operating in the South Coast Basin with all of our air quality problems.
6. We recommend legislation that would authorize the recovery of attorneys’ fees by smaller municipalities who are forced to defend a lawsuit adjudicated in the municipalities’ favor.
This will help level the field for those municipalities who have to make the hard choice to stand up against large corporations with substantial legal budgets.
Thank you for the opportunity to present this testimony on behalf of Culver City.
