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Long Beach, CA, Keeps Drilling Despite Fracking Debate

Amid corporate and governmental decisions and worried local citizen action groups, Long Beach, CA, is holding true to its long fossil fuel history and just keeps drilling.

The nearby city of Carson imposed a moratorium on drilling, and Occidental Petroleum Corp.'s (Oxy) upcoming spinoff of its $16 billion California operations has not deterred Long Beach, a city oil and gas official told NGI's Shale Daily on Wednesday.

Energy and government officials alike point to what they consider to be unrealistic fears regarding the use of hydraulic fracturing (fracking) as creating the push for bans or moratoriums on drilling. Long Beach has not fracked a well this year, according to Kevin Tougas, oil operations manager for Long Beach’s gas and oil department.

"We are still working with the state Water Resources Department board on a groundwater monitoring plan that is required under SB 4 [fracking law] interim rules," Tougas said. "We hope to have a permit later this year. Production [overall for the city] is forecast to remain around 25,000 b/d."

In Long Beach, the harbor and fossil fuel-producing center of Los Angeles County, oil production in the prolific Wilmington oilfield continues without controversy (see Daily GPI, Oct. 31, 2013) under the city's supervision and Oxy's operating rights from four municipally created offshore "islands" dating back to the mid-1960s. Since 2000, Oxy's ownership has produced 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, Tougas said.

Earlier this month, Carson's city council, which represents a Los Angeles (LA) suburb in the area surrounding the Long Beach-LA Harbor, set a 45-day ban on oil and natural gas drilling as it considers plans by Oxy to step up directional drilling from a 6.5-acre site in the city (see Shale Daily, March 20). The ban could be extended up to two years.

An Oxy spokesperson for its California operations told NGI's Shale Daily that despite the disappointment with the council's action, the company is still proceeding with the state environmental review of its proposed Dominguez Advanced Recovery Project.

"If approved, it would create hundreds of jobs and provide significant revenue to the city, county and state over the life of the project," the spokesperson said. "If the project is not approved, we will shift our resources to other areas of the country. It's important to note that regardless of the outcome, this project is not material to our California operations."

Oxy plans to keep its California operations while it moves headquarters for most of its exploration business to Houston. The spinoff plans would not have an impact on the Long Beach work, Tougas said. "The new company will continue to make the same level of capital investments."

While many of the Southern California region's other rekindled oilfields 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, 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 fracking in many of its new wells for more than 20 years, and no one appears to have noticed or complained.

Others in the industry have talked about California using more acidization rather than fracking. Tougas said the acid would have to be pumped at a pressure high enough to fracture the formation to be regulated under SB 4.

"Our acid use is pumped at low pressure," he said. "Acid fracking is when acid is added to a frack job, but we do not use that stimulation technique in Long Beach. Since the acid is placed at low pressure, the risk to groundwater is less than a frack job and that is why DOGGR [the state Division of Oil, Gas and Geothermal Resources] is not requiring a permit for low-pressure acid use."

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