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Los Angeles Fight Over Urban Drilling Site Heats Up

A fight between local residents and a unit of Freeport-McMoRan Oil & Gas Co. has heated up again over plans by the operator to flare associated gas at the site, which is in a working class neighborhood south of downtown Los Angeles near the University of Southern California (USC) campus. The company is waiting for a city of Los Angeles zoning decision on its plans.

City officials and others are questioning the Freeport plans, but the company contends it is exercising its rights under permits already in place. It was the focus of opposition from residents earlier this year (see Daily GPIApril 28). Regional air quality regulators approved the onsite gas combustion in April, 2013, followed by a city planning approval in December that year. The urban wellsite was originally permitted in 1961.

Freeport-McMoRan wants to install an enclosed burner (CEB 800) at the site to dispose of gas produced as a byproduct of oil production, contending it will have no noise or emissions impacts. But residents are not accepting the operator's assurances. The residents argue that the burning of the gas would further pollute their neighborhood, and it is not a beneficial use of the fuel in any event.

State-regulated specifications for the quality of the gas sold to local utilities, in this case Sempra Energy's Southern California Gas Co. (SoCalGas) unit, don't allow all of the associated gas at the wellsite to be taken by the utility, and thus, Freeport needs additional capacity to dispose of it onsite.

"The majority of the gas stream will continue to meet the utility quality specifications and will be delivered under an updated access agreement [with SoCalGas]," Freeport representatives told city planners, adding that the company expects to sign the new supply deal with the Sempra utility to be effective Jan. 1. The gas production at Freeport's Murphy drill site averages about 1 MMcf/d, and the CEB 800 unit will have a total capacity for up to 400 Mcf/d.

Residents have urged that microturbines for generating electricity be put on the site to suck up the associated gas, but Freeport officials told the city in their submittal last week that it would take as many as 35 turbines to use all of the gas and produce 5 MW, and the project does not pencil out economically. "It would require significant electrical infrastructure upgrades and a comprehensive infrastructure evaluation by the Los Angeles Department of Water and Power to determine if adequate transmission line capacity was available in that part of its system."

City Council President Herb Wesson, who represents the district where the drill site is located, said he will oppose the burner unless the company and the residents can reach an agreement. Meanwhile, the city zoning decision is still a month or two away, according to a report in Monday's Los Angeles Times. Freeport submitted a 21-page letter and attachments last Thursday to the city planning office to clarify and correct what the company considers erroneous public comments at a hearing in May.

Freeport-McMoRan drew complaints from residents early this year for its wellsite in the La Cienegas oilfield when it began maintenance acidizing at the two-acre urban site. The reaction mirrored the similar concerns for another site near USC owned and operated by Allenco Energy Co. Allenco shut down operations two years ago so it could improve its operations in the face of community and political pressure (see Daily GPINov. 27, 2013).

Earlier this year, Freeport abandoned plans for new drilling at the Los Angeles site, which borders a main east-west boulevard, following an outcry by nearby residents.

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