S.F. Springs Considers New Zoning Ordinance to Restrict Oil Drilling

After more than a year of haggling with oil company officials, the City Council is expected Thursday to take a step away from the city’s oil-town legacy by approving a zoning ordinance that would prohibit some new drilling.

The intent of the ordinance is to encourage development of other industries within the city’s oil field area, said Richard Weaver, planning and development director for Santa Fe Springs. Oil companies that own property and its underlying mineral rights are able to drill on that land use only a portion of the land for drilling equipment, and the city wants to prevent them from blocking development of the remaining surface area.

But oil industry officials say they have cooperated with the city in fostering development; they regard the proposed restriction as unreasonable because it would ban new drilling without giving oil operators a chance to show how they can co-exist with other projects.

Oil Field Can’t Move

“We have a problem with unorganized condemning of property,” said Ed Malmgreen, assistant vice president of the California Independent Producers Assn., which represents about 700 oil operators in the state. “One of the problems is the oil fields are there. You can’t move oil fields very easily, but you can build buildings other places.”

The ordinance will create a new zone, called an N overlay zone, which the City Council could superimpose on existing parcels in the 1,000-acre oil field area. The ordinance calls for no more than 35% of the area, or 350 acres, to fall under the zone. In that area, new drilling could be prohibited if the city thought the land was necessary for commercial development.

Weaver said the city does not have any immediate applications in mind for the zone, and predicted it would be rarely used.

“But we feel it would be crucial in some cases when it’s the only way the development could occur,” Weaver said, adding that it could save the city from costly court battles in instances where a landowner might be uncooperative.

More Sales Tax Sought

Weaver says the city is not trying to shut down the oil business. But Santa Fe Springs, 85% of which is zoned for industrial use, is in need of commercial developments to boost its sales tax base. The city expects to derive about $150,000 in revenue from oil operations, as opposed to an expected $12.2 million from sales and use tax revenue.

The Planning Commission last month unanimously approved the ordinance, but Chevron USA Inc. is trying some last-minute lobbying to weaken the provision concerning the prohibition of new drilling. As with any rezoning, there would be a public hearing before the overlay zone could be imposed. Chevron sent a letter to City Council members asking them to add a clause that would require the council to consider an oil producer’s plans before banning drilling.

Margo Bart, a district land supervisor for Chevron, called the proposed ordinance shortsighted. “At the very least, an operator should have an opportunity to present an application and show what he would do to make an operation compatible with surrounding land operations,” Bart said.

Chevron has limited holdings in Santa Fe Springs, but monitors such ordinances because of the company’s extensive interests in Southern California. “It would set a very bad precedent to see this kind of language approved,” Bart said.

Terry Laudick, a land supervisor for Mobil Oil, the largest producer in the area with more than 300 wells, said the restrictions are likely to have a greater effect on independent drillers. “They don’t have the flexibility that (bigger producers) have. They don’t have alternate surface locations” from which to drill, Laudick said.

Although oil officials may be dissatisfied with the ordinance, the situation does not compare to the debate of a year ago, when the Planning Commission was seriously considering phasing out some existing oil wells after 20 years. Industry representatives saw the proposal as a way to remove their business from the city, once one of the state’s largest producers of oil. The revised ordinance also provides that the city make an effort not to apply the overlay zone to existing wells.