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California Beach Town Rejects Oil Drilling Plan

By a 3-to-1 margin, residents in the Los Angeles suburb of Hermosa Beach on Tuesday rejected a proposed plan by E&B Natural Resources to drill up to 34 wells from a 1.3-acre plot of city-owned land near recreational beaches.

Measure O drew 3,799 votes (78.9%) in opposition to 1,011 (21.1%) in favor. The measure, if approved, would would have lifted a decades-long ban on oil drilling (see Shale DailyJan. 14).

Bakersfield, CA-based E&B in 2012 purchased the drilling rights in Hermosa Beach from Macpherson Oil Co. Macpherson had sued the city of 20,000 after voters in 1995 overturned a drilling program that had been approved in 1984. Macpherson originally sought $750 million in damages.

Measure O was part of the lawsuit settlement. With the voters’ rejection, the city, about 25 miles southwest of Los Angeles, is required to pay E&B $17.5 million. The city council, unanimously opposed to drilling, already has set aside $6 million and plans to pay E&B the remainder of the settlement at $800,000/year.

E&B had proposed to drill horizontally under the nearby ocean floor. The operator estimated up to 35 million bbl of production could be extracted from the proposed project over a 35-year period.

“Working with city, we resolved a lawsuit that for years presented a danger to the city’s solvency and loaned the city $17.5 million so it could settle its lawsuit [at that time],” a Hermosa-based E&B spokesperson told NGI’s Shale Daily on Wednesday. “We still believe the passage of Measure O presented a better future for Hermosa Beach but have no regrets letting the voters decide the outcome.” 

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