Comments due March 29, 2015
— This quaint and quirky seaside community south of Los Angeles has had a conflicted relationship with the oil industry for close to a century. It has variously approved oil drilling, banned it, approved it and prohibited it again. During one yesonoil stretch, it contracted with an energy company to put 34 wells on a 1.3acre city maintenance yard a few blocks from a stretch of beach that normally bustles with surfers and swimmers. On Tuesday, the residents of Hermosa Beach are going to vote yet again on an oil and gas drilling initiative — whether to allow a contract with the energy company E&B Natural Resources Management to proceed despite a current drilling ban. The contract, which could mean hundreds of millions of dollars for the local government, received final approval from the City Council in 1992, but it has been in limbo ever since. A vote to block the drilling would come at an unusual cost: $17.5 million in damages to the energy company, the equivalent of about half the annual general fund budget in this city of almost 20,000 people. There have been voter initiatives to restrict oil drilling, particularly fracking, up and down the California coast, but none seem to have quite the complications and emotions associated with the one here. Across this community on a hillside rising up from the beach, homes are blistering with signs urging a no vote on Measure O, as the drilling initiative is known: “Keep oil out of Hermosa.” All five members of the City Council, including the mayor, have urged voters to defeat it, despite the huge penalty — part of an agreement the city signed with the company to end a lawsuit — and the loss of future oil revenue. “It’s a little more than we probably should have paid,” Mayor Peter Tucker said, referring to the deal for potential damages. “But if it gets us out of this constant, constant oil issue we’ve had hanging over us for 30 years, I think it’s money well spent.” “We are not an oil town,” Mr. Tucker said. “We don’t need the money.” E&B has begun an allout campaign to persuade voters to approve the initiative, including the kind of television commercials that seem more suited to a governor’s race. (No local cable for this campaign: E&B says it has bought time on Fox News and CNN.) The advertisements, with a backdrop of sundappled beaches and comforting music, dispute claims that the project would harm the environment and note that the method of drilling would mean no unsightly oil platforms on the horizon. The wells would drop straight into the ground before turning toward the oil under the ocean. Officials said the project was being jeopardized by unfounded fears in a state that has long been protective of the environment and wary of oil companies. “It’s the California coastline, and that’s always a challenge,” Michael Finch, a vice president with E&B, said. “We suffer from the ‘I don’t want it in my backyard’ syndrome. But you are talking about a 1.3acre site that would be behind a 35foot wall.” He said it would be more environmentally sound to drill for the oil here and put it right into the California distribution system than to ship it from across the globe. The campaign has set off fraught neighborversusneighbor debates about the future of this peaceful community, while fueling pointed questions about how the city ended up in such a financially vulnerable position. (City officials noted that the energy company had originally pushed for a much higher penalty for breaking the contract.) An environmentalimpact statement commissioned by Hermosa Beach listed nine potential areas of concern that it said the company would be unable to mitigate, including air quality, aesthetics and noise. “Hermosa Beach is a real small beach town,” said Hany Fangary, an environmental lawyer who is a member of the City Council. “We like the feeling of a beach town. If you have someone coming in and putting 34 oil wells right near the beach, it changes the character of the city.” Supporters of the project say the fears voiced by opponents — declining property values, offensive odors and the potential for a spill that could spray fuel into the water, on the beach or over neighboring houses — are exaggerated. “I’m very much in favor of it,” said Jim Sullivan, a commercial real estate broker. “It’s the best thing to come down the road for Hermosa Beach in its entire history.” Concern is driven in no small part by the conspicuous location for the proposed wells: a maintenance yard, now used to store city vehicles, that is in the middle of the city and surrounded by homes and businesses. For months at a time, drill rigs would soar as much as 110 feet, and construction is supposed to take at least three years. This is hardly a community of beachfront mansions. The streets are lined with small (but not inexpensive) homes where people, though able to feel the sweep of Pacific Ocean breezes, do not exactly have privacy: The entire community fills just 1.4 square miles. “We are all kind of crammed in here,” said George Schmeltzer, 76, a former mayor who has lived here for 53 years and is a leader of the opposition. “You can hear your neighbor brush his teeth. We are offkilter in a pleasant kind of way.” “It’s not an atomic bomb,” he said of the project. “But doggone it, it doesn’t seem right for a residential neighborhood.” The company anticipates that the drilling would produce 35 million barrels over the 34year life of the project, producing a potential $500 million windfall for Hermosa. (The revenue projection was made when the price of oil was close to $100 a barrel; it is about half that now.) But the more pressing question may be whether to pay $17.5 million to terminate the drilling contract. The initial ban on drilling was passed in 1932, about 13 years after California awarded Hermosa Beach the tidelands with the oil fields. In 1984, with the promise of muchneeded revenue for the city, voters approved initiatives granting two exemptions to permit oil drilling. In 1986, the City Council approved the first version of a contract that would be repeatedly amended over the next six years, awarding drilling rights to a company that was a predecessor to E&B. In 1995, voters reinstated the ban on oil drilling, leading the company to sue for damages. After years of litigation, the city in 2012 said it would let drilling begin only if approved by a ballot measure, and agreed to pay E&B the penalty if the initiative was defeated. The city has a surplus of close to $7 million that it has put aside to help pay the penalty. The rest would be paid in roughly $800,000 annual installments. “An $800,000ayear payment to preserve the quality of life and the special beach community that we have certainly seems worth it,” said Stacey Armato, one of the leaders of the antidrilling effort. (NYT March3, 2015)
19 comments:
It seems that this article adheres to a constant issue plaguing many coastal communities debating whether or not to allow drilling off their shores. The revenue from such endeavors proves to be quite profitable, in this case, potentially $500 million for the town of Hermosa Beach. This figure would decrease due however due to the decreasing prices of oil. However, the downside to this, and the side that I personally take, is that of the environmentalists. Allowing drilling in this area will indeed increase pollution, both to the air and most certainly to the water. It will be noisy, and take away from the neighborhood character. Most importantly however, it continues the dependence for fossil fuels, in an age where technology is strong enough to divest against it. Rather than depend on oil companies for energy, this town could invest in an offshore wind farm, creating renewable energy for its community, and stopping the constant oil debates.
The issue plaguing the small town of Hermosa Beach is whether or not to allow E&B to drill offshore. To provide some background, in 2012 after years of litigation, the city said it would let drilling drilling begin only if approved "by a ballot measure", and would "agree to pay E&B if the initiative was defeated." Some, like Jim Sullivan, a commercial real estate broker believe that the town should vote to allow E&B to drill. He says, "It's the best thing to come down the road for Hermosa Beach in it's entire history." Additionally, the project would bring in a ton of revenue for the small town. The company estimates that the drilling would produce, "35 million barrels over the 34year life of the project, producing a potential $500 million windfall for Hermosa." These numbers were estimated when the price of Crude was at $100 a barrel. Still, many are against the drilling. Recently, all five members of the City Council, including the mayor, have come out and urged voters to defeat the initiative, despite the incredibly high penalty ($17.5 million to be exact). In the past, the town has had a conflicted relationship with the oil industry for quite some time as it has "variously approved oil drilling, banned it, approved it and prohibited it again." I think Chelsea makes a great point, why not simply pay the penalty and invest in future more sustainable alternative energy sources such as wind or solar energy. Although the technology has quite a ways to go, in my opinion, alternative energy is the future and investing in such projects would lead to cleaner and more sustainable future.
I actually just read an article about this a few weeks ago, and it stated that residents voted in an overwhelming manner on rejecting a proposal for additional oil drilling in Hermosa Beach, which was named “Measure O”. The proposal would have allowed a drilling project proposed by E&B Natural Resources Management Corp, but results of the vote showed that 78.9 percent of voters have voted against it. The defeat of this proposal was pretty costly however, since it means that the city will have to pay E&B $17.5 million stemming from a lawsuit over drilling.
Supporters of the project thought that the offshore drilling would have generated hundreds of millions of dollars of new revenue. This could have been used to provide funds to upgrade the city’s aging infrastructure, and improve many public services. There was also talk that the drilling proposal would also not involve any fracking or offshore drilling platforms and “no permanent equipment visible above the walls at the currently contaminated city maintenance yard.”
Individuals that opposed the project claimed that the project would have included a large drilling rig, 30 oil and gas wells and miles of dangerous underground pipelines that would have threaten the quality of their life and health. There would be an increase in air pollution, and the drilling site could have endangered lives in general. By rejecting Measure O, Hermosa Beach votes were protecting underground aquifers, which supply water for 11 cities in Los Angeles County, from the threat of toxic wastewater, which would, had Measure O passed, have been dumped into at least four injection wells. The town needs to look for new ways to produce energy, more natural and conservative ways that will project their communities from the harms that oil companies are trying to impose by performing large scale drilling projects like this.
The project was being failure by unbounded fears in a state that has long been protective of the environment and wary of oil companies.
“It’s the California coastline, and that’s always a challenge,” Michael Finch, a vice president with E&B, said. “We suffer from the ‘I don’t want it in my backyard’ syndrome. But you are talking about a 1.3-acre site that would be behind a 35-foot wall.”
I also say that it would be more environmentally sound to drill for the oil here and put it right into the California distribution system than to ship it from across the country.
This story of Oil Company’s and small towns fighting for control over the oil beneath their feet is one I read far to often. I’m adamantly opposed to any type of oiling drilling but offshore drilling upsets me more than most other kinds. As we saw in the gulf a few years ago spills are nearly impossible to contain. This town is clearly to small to handle a project like this. It still amazes me, although I’m not sure why, how anymore, that we are still in fact drilling for oil when we could be using the millions of dollars to research renewable forms of energy
Nick Stanto
The issue discussed in this article is the same as any other environmental issue: are the monetary costs worth the environmental risk and degradation. As an environmentalist, I am biased in my opinion. The increased air, noise, and water pollution is not worth whatever fuel can be extracted from these coastal communities. It's time to focus on building a new, cleaner energy profile and stepping away from fossil fuels entirely. Although Hermosa Beach, and towns like it, could raise large amounts of money from permitting this drillin, they will lessen the quality of their environment over time.
Haylei P.
The New York Times proclaimed that the vote of the drilling in Hermosa Beach was declined by residents - a 3,799 to 1,016 vote. Although the town would be paying up their $7 million penalty, with a $800,000 per year settlement to fully pay of the $17.5 million damages to the oil company, it was a good initiative on their part.
The potential of an oil spill on a beach can cause not only health concerns for the residents, but the environment (animals, ecosystem, etc.) as well. In relation to the big BP oil spill on the Gulf of Mexico, it nearly killed majority of the ecosystem and took years to clean up. This is just one of many examples to completely eliminate oil drilling and use alternative energy. Beaches create strong winds, which would be beneficially for companies to install wind turbines to power the town. In addition, the usage of solar energy - considering beaches are very known for sunny days and very little clouds.
The article describes the predicament of this small beach community in California. If the community votes against the drilling, then they have to pay 17 mil, but if they approve it then they have to deal with 3 years of construction. In my opinion the 17 million payment is the way to go. Time is money and I think 3 years is too long to deal with construction (noise and pollution), not to mention the 34 other years that the oil rig would be operating. The $800,000 a year is a good approach because of the discount rate.
The community will gain revenue if the project is approved, but the community would have to deal with the risk of a potential oil spill. An oil spill would significantly harm the local economy and arguably would cost more money than 17 mil.
-Frazer Winsted
I think the idea of a small residential community standing up to a big oil company is great. Yes, the community is divided on the issue, but the opposers to the initiative certainly have grounds for their stance. The board said that they don't need the money and that they value the character of their community more than oil. I agree with what others are saying and feel that Hermosa Beach should pay the penalty and start investing in alternative energy resources that will still bring in revenue but also maintain the character of the community.
-Emma Weis
I am very happy reading this article seeing that most do not want to drill for this oil. As available as the oil is under the pacific ocean and as much as it could bring big profits, they are saying that they really don't need the money. If they do start drilling, im not sure that all that oil would get put into the Cali distribution. There will be some big corporate guys saying it needs to go overseas and across the globe to fuel other countries or just to sell and make more profit. It would be a very dangerous process and very degrading if the do get the drilling approved. Now here is a real issue cali should be more concerned about and it is their fresh water supply. If there is some way that the oil that is drilled and sold to the states, cali should take those profits and work them into some kind of process to help the fresh water problem. I think that if they can link more solutions to other problems and follow a certain guideline to take on those solutions, then the drilling has a better chance of getting passed, but right now it is a very slim chance.
I am glad they are not concerning themselves with all that available oil and maybe they can convert towards renewable sources instead of sucking more fossil fuels from the earth
This is a classic case of economics versus society and the environment. The "I don't want it" in my backyard syndrome runs deep as residents cling onto the social and environmental fabric of their community. Though posing many potential benefits to the community, a strong sense of community and pride in that community makes many residents very disheartened and in clear opposition of any projects that will encroach on communal spaces and drastically affect the aesthetics and health of these spaces. In an effort to preserve beach culture, Hermosa residents stood up and spoke up. In reading the posted article and extending my knowledge of the proposal through further inquiry, many issues come to mind. The usage of the term “oil fields” is not well received as it objectifies an otherwise “beautiful” beach community reducing it to mere commodity. Additionally, it was stated that “all five members of the City Council, including the mayor, have urged voters to defeat it, despite the huge penalty — part of an agreement the city signed with the company to end a lawsuit — and the loss of future oil revenue. “It’s a little more than we probably should have paid,”, but yet, there is no extensive mention of the potential damages that the environment and community will incur if the project is granted permission, also failing to mention the amount of reparations that will be repaid as a result of any potential damages, yet the city has to settle with the company for not passing an initiative? This is an example of an instance where the polluter does not pay and is actually rewarded nicely for not getting its way.
37,253,956. According to the U.S. Census, this is most recently recorded population of California in 2010. As the number increases, so does the demand for fuel, oil, and energy. The growing demand for natural resources takes a heavy toll on consumers, American economy, and the environment. The town of Hermosa Beach, California, like many other towns across the United States has witnessed and faced this challenge first hand. In 1986, when the city council originally passed the first version of an oil drilling contract, the population of California was at 25,000,000. That means there has been an increase of over 12 million people since the original draft. After many amendments to the contract, it was finalized in 1992. This was a win for E&B, the oil company, but only until voters reenacted the ban on oil drilling in 1995. As pressure from environmentalists and economists and businessmen increases, a resolution has to be made to satisfy the residents of Hermosa Beach and the executives of the oil company.
The result of this vote will determine the values of the people. If on Tuesday, March 24, 2015, the voters of Hermosa Beach vote no on Measure O, then the contract will be terminated, the ocean protected, and drilling will remain banned in Hermosa Beach. But at what cost? $17.5 million dollars. This is the price the town will pay to the oil company to terminate the contract and compensate for damages. Negotiations with oil companies like E&B is a dirty business and it is difficult to determine a winner and loser. Whether the town votes yes or no on Measure O, the company is still winning and would get paid regardless. As individuals of large functioning societies, we must ask ourselves what is most important to us and our future generations. Is it the amount of money we have in our pockets or is it the ability to swim freely in an open sea, drink water without fear of getting sick, and breathe clean air without smog?
If I were a resident of Hermosa, I would probably be against new oil drills. Small beach towns like Hermosa have a lot of pride in the environment in which they live. They love it, and they don’t want anything to change. Neither would I. New oil drills would pollute the scenery reduce the air quality, and could bring unwanted traffic into an already small town. The costs are great, but the town may feel its worth it. This situation reminds me of a Coase situation. There are two entities that want different things. If E&B are allowed to drill, they will compensate the community with revenues from oil sales. However, the community is willing to compensate E&B not to drill in order to protect their peace of mind. However, there is a difference in that any amount of compensation to the twon by E&B if they are allowed to drill may not be enough to satisfy the townspeople for the radical changes that they would have to endure. There are some things money just can’t satisfy. I would rather have a clean environment to spend my days relaing. It would be a real shame to taint a beautiful beach side town.
The problems of Hermosa Beach are unfortunately not unusual. Particularly in small towns, oil and gas companies are making their move to infiltrate any and all untapped domestic fuel resources. We see this not only with the oil rigs on the coats of California, but also with the natural gas stores in many parts of the rural United States. These situations always raise the same issues, which are typically dived into two teams; one group is for the fuel extraction and the other is against it. The "pro" team will say that allowing the drilling will provide jobs and much-needed income to areas that tend to be on the poorer side. The "con" team will advocate for the rights of the environment and aesthetics. This is the dilemma plaguing Hermosa Beach. What does the community value more? Is it the millions of dollars that the project will bring in? Is it the peace and quiet of their sea-side neighborhood? Is it knowing that they did not compromise their morals and sell out their community? The area seems very divided on the topic, as is expected.
The only real solution is hit the problem at its core and eliminate the need to drill for oil in the first place. Renewable energy resources, such as wind and solar (both of which can be very effective for an ocean-front town which is plentiful in both sunshine and ocean breezes) need to replace the aggressive construction of oil rigs. While it is still possible that there may be some push-back over the implementation of these energy sources, it is less likely that environmental groups will find fault with them. Both solar and wind power also produce little to no noise, so that too will no longer be a concern.
In the mean time, I hope that the people of Hermosa Beach remember what it is about their town that they love, and I hope they do not let any of these aspects be compromised for the sake of a pay day.
Its great to see such a small town stick up for themselves and what they believe is right and whats wrong. Allowing drilling int this area will increase pollution. Air and especially the water will be effected by this process. Also the noise will be very disturbing to near by resident members. Also depending on fossil fuels is not a good idea.
Allowing drilling int this area will increase pollution in many different aspects. But air and especially the water will be effected by this process. The noise alone will cause a decrease in the communities involvement and the way the town is normally run. This will effect many different activities also causing a lack in tourism and lack in income for the community. Also depending on fossil fuels is a bad way to go about it. They should look into investing in other products and energy companies rather oil companies. Or at-least a company with a better plan and resource strategy. Residence members that opposed the project claimed that the project would have included a large drilling rig, 30 oil and gas wells and miles of dangerous underground pipelines that would have threaten the quality of their life and health.
-Derek Fields
It seems to me like this is a no-brainer. It seems, the way this article puts it, that none of these people want the drilling to ensue. Even the mayor, who will have to worry about paying the money to terminate the contract, seems to want it dismantled. It doesn't make sense for a company to totally intrude on an entire community if the entire community is against having them there.
The beach is probably one of their main sources of revenue. If they are going to set up these rigs, it will ruin the beaches atmosphere, add noise, add air pollution, and not to mention the look of the rig itself. People go to the beach to relax and enjoy nature as it pulls the waves in and out. In the long run, this project will most definitely hurt the town's income, even if they are getting oil directly distributed to them. I hope that in the near future this town decides to pay for the company's dismantlement, and that they can keep their land preserved as it should be.
Leanna Molnar
The revenue from allowing drilling to happen at Hermosa Beach could be quite economically beneficial for the town as well as the state because California is now going under a massive debt. However there are environmental damages to think about by approving this. The city council needs to rethink their priorities by either fully agreeing to the drilling or not thinking about it at all. This does continue to support the use of fossil fuels which is particularly not needed in Cali because it has vast open space/land where it can use the space to harness wind energy. It could be expensive and as there are economical challenges, once surpassed can reap environmental advantages.
These estimates were given when the price of oil was over $100 dollars a barrel. So this estimate would be a lot lower a the current price. Jim Sullivan, a commercial realestate broker said that this deal is the best thing to come to this community. Even with this astronomical amount of revenue that could come to the community, many are against it. The community has flip flopped with their opinion of drilling. They were against it, then for it and back again. The community should opt to put their efforts in using alternative energy sources.
- John D’Onghia
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