Harkening back to its early 20th century roots as a world-class fossil fuel basin, Southern California is awash these days in fresh oil/natural gas drilling projects in areas that have long been surrounded by residential and commercial development.
While $100-plus/bbl global oil prices are the driver, growing negative public perceptions of hydraulic fracturing (fracking) have stirred a lot of opposition, as evidenced by the action taken last Tuesday by the five-member Los Angeles County Board of Supervisors to block a city plan in Whittier to drill on some of the city's open space public parkland.
Envisioned more than five years ago (see Daily GPI, July 8, 2008), Whittier, an older suburb about 15 miles southeast of downtown Los Angeles, intends to resume drilling on a small part of 1,200 acres of former Chevron and Union Oil production fields -- still producing -- that the city purchased from the oil companies in the mid-1990s for conservation purposes.
Many local jurisdictions are attracted to the potential additional source of city revenues as they emerge from a time of extreme belt-tightening throughout California and other western states. But the Los Angeles County Supervisors last Tuesday unanimously voted to oppose Whittier's plans, a censure that the city brushes aside as having no legal teeth. Ultimately, the courts will have to decide if the city can resume drilling on parklands purchased with public funds.
The controversy focuses on the fact that Whittier almost 20 years ago used county-wide ballot measure-generated funds to purchase 1,230 acres for conservation. In 2008, city officials agreed to lease seven acres to Santa Barbara-based Matrix Oil Co. for 30 years with the prospect of providing the city with $100 million of annual revenue, double the size of the 90,000-population city's current budget.
Matrix wants to use the acreage for slant drilling that it says has the prospect of producing 20 million bbl of oil.
Other areas of the county where oil/gas development has been a part of the area's history for more than a century are either stepping up production or, as in the case of the tony beachfront enclave of Hermosa Beach, proposing to resume drilling where there has been no activity for decades.
In Long Beach, the harbor and fossil fuel-producing center of Los Angeles County, oil production in the prolific Wilmington Oilfield continues without controversy under the city's supervision from four municipally created offshore "islands" dating back to the mid-1960s.
Since 2000, Occidental Petroleum Corp. has owned the operating rights, producing small profits for the company and sizable revenues for the state (more than $350 million for the 2012-2013 fiscal year) and $65 million for the city, according to Kevin Tougas, Long Beach's oil operations manager.
Currently, production from the four islands in the East Wilmington Field averages about 25,000 b/d, with historic production since the mid-1960s exceeding 1 billion bbl and projections for another 2 billion bbl still to be realized in Los Angeles County's second largest city.
While many of the region's other rekindled fields are near homes, businesses and/or environmentally sensitive areas, Long Beach has a unique setting: a mix of heavy industrial and port operations across the water from seaside residential areas. Each of the four man-made islands, totaling about 44 acres collectively, is self-contained and interconnected through a closed-loop system of pipes. They generate their power needs through a city-run 34 MW gas-fired power plant.
All the water is produced and used on each island, with constant recycling of produced water at each site. Tougas said Long Beach has been using hydraulic fracturing in many of its new wells for more than 20 years, and no one has noticed or complained.