L.A. in talks with oil producer about reopening facility near USC

AllenCo Energy is trying to negotiate a settlement with the Los Angeles city attorney's office as part of an effort to resume operations of an urban oil field that prompted hundreds of complaints of nosebleeds and respiratory ailments due to its emissions, officials confirmed Wednesday.

AllenCo voluntarily halted oil production at the site, in a mostly low-income South Los Angeles neighborhood about half a mile north of USC, two years ago at the request of U.S. Sen. Barbara Boxer (D-Calif.), and after health and environmental safety authorities were sickened during a tour of the property.

Since then formal complaints of respiratory ailments and nosebleeds in the University Park neighborhood have all but disappeared.

“The neighborhood has been at peace for the past few years,” said Sandy Novarro, a spokeswoman for the Esperanza Community Housing Corp., a nonprofit affordable housing developer in the area. “So, we’re very worried about the company trying to reopen.”

AllenCo declined to comment. But City Atty. Mike Feuer, who filed a lawsuit in 2014 to stop AllenCo from reopening, said  “the company appears to be trying to bring its operations into compliance with the environmental and community safety laws at the core of our lawsuit.”

“If there is to be a settlement,” he said, “it must contain strong measures to protect the health and safety of the surrounding community.”

Feuer’s lawsuit accuses the company of ignoring years of evidence that fumes from its oil fields were sickening residents of the surrounding neighborhood.

Feuer's investigation found that AllenCo willfully disregarded violation notices issued by oversight agencies and that regulators did not aggressively enforce their numerous and repeated citations.

As a result, AllenCo exposed neighbors “to noxious fumes and odors which have resulted in adverse health effects on community members in the form of severe headaches, nausea, nosebleeds, chronic fatigue and respiratory ailments, including asthma,” said the complaint, filed in Los Angeles County Superior Court.

The South Coast Air Quality Management District in May issued a permit allowing AllenCo to restart operations, but it does not relieve the company of having to comply with the requirements of the U.S. Environmental Protection Agency, the state Department of Conservation’s Division of Oil, Gas & Geothermal Resources and the Los Angeles Fire Department.

Over the last two years, AllenCo has made improvements at its facility, but many of those modifications still have not been tested or approved by federal, state and local agencies, officials said.

Seven of 11 idle wells on the property, which is leased from the Catholic Archdiocese of Los Angeles, have yet to yield a satisfactory demonstration of their mechanical integrity, said Don Drysdale, a spokesman for the state Department of Conservation.

The site was donated to the Archdiocese in the 1950s by descendants of Edward L. Doheny, one of Los Angeles' early oil barons. AllenCo bought the oil production facility on the site in 2009 and within a year increased production more than 400%, from 4,178 barrels to 21,239 barrels, the complaint said.

Other agencies, in addition to the air district, had cited AllenCo for violations in the years after the company ramped up oil operations.

The city Fire Department had issued citations for failing to repair and maintain fire protection systems. State safety inspectors cited the company for failing to inventory and label hazardous materials. Water quality inspectors noted chemical containers stored outdoors without covers.

But none of the agencies took additional steps to stop the violations. Neighborhood activists have complained that oversight agencies should have moved more forcefully.

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