Appellate Court Gives Occidental OK to Drill in Palisades

A state appellate court issued a strong setback Tuesday to the tangled, 15-year-old effort of No Oil Inc., to prevent oil drilling in Pacific Palisades, which environmentalists believe could cause earthquakes, landslides and fires.

The ruling by the 2nd District Court of Appeal upheld the Los Angeles City Council’s 1985 approval for Occidental Petroleum Corp. to open a coastal oil field estimated to produce 60 million barrels of oil and $100 million in taxes for the city over the next 30 years.

A decision by Los Angeles Superior Court Judge Norman L. Epstein, which was overturned by the appellate ruling, has blocked drilling for the last two years.

Epstein, in setting aside the ordinances permitting the drilling, had ruled that the project’s environmental impact report, required by the California Environmental Quality Act, was inadequate. He said it failed to deal with negative environmental effects of proposed pipelines that would carry the oil to refineries. Epstein also ordered the City Council to “clarify” its findings about slope stability and fire protection.

Permits Were Granted

Last July, the California Coastal Commission narrowly granted, by a 7-5 vote, permits for exploratory drilling, rejecting No Oil’s appeal of city administrative agency approval and a resolution opposing the permits by Councilman Marvin Braude and seven other members of the 15-member council.

Braude, who represents the Palisades area, claimed that Occidental should not be allowed even to apply for Coastal Commission permission for the project until questions about the validity of the council’s ordinances approving the drilling had been settled by the appellate courts.

No Oil Inc., recently filed a new suit contesting the Coastal Commission’s approval of drilling permits, claiming that the project violated coastal protection provisions of the state Coastal Zone Conservation Act. That suit is pending, and could block drilling under the separate state coastal law even if Tuesday’s appellate court green light is upheld by the state Supreme Court.

But currently the controversy is governed by the 50-page decision Tuesday by the Court of Appeal, written by Justice Robert R. Devich, with the concurrence of Justices Vaino Spencer and L. Thaxton Hanson.

After learning of the decision, John B. Murdock, attorney for No Oil Inc., said he had not yet talked with his clients, but assumed that the group will immediately seek a Supreme Court stay of any now-legal drilling and then file an appeal.

“We will take whatever measures are necessary to prevent drilling,” Murdock said.

Will Oppose Attempt

David Elson, one of Occidental’s attorneys, said when he was informed of the decision, that any attempt to stay the project further will be opposed.

“The client (Occidental) is prepared to move forward, and will start as expeditiously as possible in compliance with the conditions, and subject to getting all necessary permits,” said Elizabeth Watson, Elson’s co-counsel for Occidental.

The first step, under restrictions imposed by the Coastal Commission, Watson said, is to build a drainage system on the city property adjacent to the drilling site. She said she will have to discuss the project’s timetable with Occidental officials, after reading the appellate court opinion, but that the drainage construction could begin fairly quickly.

“Occidental has the approval from the City Council in the ordinances which were just validated by this decision,” she said, asserting the oil company’s legal right to proceed. “And, in addition, we have a coastal permit.”

In approving the drilling ordinances, the appellate court rejected all of No Oil’s legal arguments that the project violated the California Environmental Quality Act and the city’s General Plan and provided inadequate indemnification of city taxpayers for any damage suits.

“We conclude,” Devich wrote, “that the discussion of the environmental effects of the proposed pipeline contained in the environmental impact report . . . satisfies the requirements of the California Environmental Quality Act . . ; that the findings adopted by City Council . . . are not in need of clarification; that the drilling ordinances are consistent with city’s General Plan, and that the indemnity agreement provided as a condition of the drilling ordinances is valid. We therefore reverse the judgment.”

The justices said the council had properly dealt with slope stability by calling for the installation of the drainage system, and had dealt with the fire danger by planning a new fire station to serve the drill site.

No Oil Inc. has waged court opposition to Occidental’s efforts to drill for oil in the Palisades since the City Council first approved two exploratory wells in 1972. That ordinance squeaked by the trial court, with some restrictions, but was overturned by the state Supreme Court in 1974.

The legal debacle has gone on so long that the trial judge who approved that early ordinance, David N. Eagleson, has served on the state Court of Appeal and now sits on the state Supreme Court.