Many Battles but No Winner : A tenacious Occidental Petroleum Corp. and ambivalent city officials have fought to a draw for 22 years over Palisades drilling.
A few weeks before Ronald Reagan was elected governor of California on Nov. 8, 1966, Occidental Petroleum Corp. discovered oil not far from his Pacific Palisades home.
On the same day 22 years later, when they will help choose President Reagan’s successor, Los Angeles voters may decide once and for all if Occidental will finally get to extract the first drop of oil from that same find.
Competing city Propositions O and P on the Nov. 8 ballot could prove to be the climax of the Palisades oil-drilling saga. But there is no certainty. The Oxy fight has appeared to be finished many times, only to resume unexpectedly on some other front.
Proposition O, co-sponsored by Councilmen Marvin Braude and Zev Yaroslavsky, seeks to wipe out three 1985 city ordinances permitting Oxy to drill in specified districts of Pacific Palisades. To prevent similar ventures, the measure also would impose a general ban on oil drilling 1,000 yards inland from the mean high tide, although present drilling operations, such as those in the Venice and Wilmington areas, would be allowed to continue.
Backed by Oxy
Proposition P, heavily bankrolled by Occidental, would “reauthorize” the 594 acres of drilling districts north of the two-acre Pacific Coast Highway site where Oxy would base its drilling operations. The pro-drilling measure would, among other things, earmark funds for toxic waste enforcement efforts.
Because the two measures conflict, the initiative receiving the most yes votes, if it has a majority, will prevail.
The two initiatives are hybrids of past efforts by the rival sides. In 1974, Braude proposed an identical 1,000-yard coastal drilling ban, which failed to win council backing. Oxy, meanwhile, has repeatedly tried to make its project more palatable to the city with attractive offers of additional revenue and at-cost oil and gas supplies.
The protracted fight has pitted one of the world’s largest corporations and its powerful chairman, Armand Hammer, against Braude and a determined alliance of environmentalists and Palisades homeowners called No Oil Inc. who object to oil drilling along the coastline and particularly near a popular beach.
The 90-year-old Hammer, known worldwide as the American capitalist who for decades has dealt successfully with Soviet leaders, has vowed to carry on the Palisades fight indefinitely. Equally committed in their opposition are No Oil leaders and Braude, who represents the Palisades area.
From the beginning, deep bitterness has framed the debate over the highly charged issue--the advantages versus the disadvantages of oil drilling in an upscale oceanside neighborhood. Nor has the rhetoric toned down over time:
"(Hammer) is like a spoiled child who is accustomed to having his own way,” Braude said recently. “He is apparently able to influence political decisions in other parts of the world, but he is simply unwilling to recognize that he simply cannot have his way here in Los Angeles, his own city.”
Counters veteran Oxy director Arthur Groman on Hammer’s behalf: “I think (Braude) is the most arrogant man that I’ve ever met in my life . . . he’s a hypocrite. He has absolutely no rational arguments against this (project).”
And as for the anti-drilling forces, Groman says: “These are dirty, vicious, lying people. There is nothing they won’t resort to. They are despicable people.”
Akin to a long-running soap opera, the controversy has also been an exhaustive bureaucratic struggle consuming hundreds of hours of public hearings before a half-dozen agencies. Filing cabinets full of dry and complex geological studies and environmental reports have proliferated.
Many Temporary Victories
In official arenas, both sides have won their share of temporary victories. The city Planning Commission has twice voted against the project, the City Council three times in favor. Two zoning administrators, 13 years apart, issued opposite opinions on whether drilling at the bluff-side site made sense. The California Coastal Commission’s experts urged the panel last year to reject Oxy’s exploratory permit application, only to see it approved on a 7-5 vote after a politically charged hearing.
Another key battleground has been the courtroom, where legal fees have run to hundreds of thousands of dollars on litigation that has twice gone up to the state Supreme Court. A No Oil suit challenging the project is still pending and Oxy promises to sue if Proposition O prevails on Nov. 8.
The controversy has figured in the rise and fall of several of the city’s political leaders and remains a factor in future campaigns.
A scandal over a 1969 land swap between Oxy and the city helped propel Bradley--who charged that Occidental obtained its drilling site through “deceit and deception"--to his historic victory over Sam Yorty, a key player in the exchange.
During a series of legislative hearings into the circumstances of the swap, Yorty denied, then later admitted under oath, that he kept tabs on the land exchange and his office helped push it through at a time when he was trading in thousands of shares of Oxy stock.
Competing with the land swap as the most controversial and memorable development in the saga was Bradley’s 1985 approval of the drilling project. Branded a “betrayal” by environmentalists, Bradley’s action came seven years after he had denounced the project, with a mayoral veto, as “incompatible with the residential and public recreational uses now in existence . . .” in the area. Explaining his reversal, Bradley said Oxy had satisfied his earlier concerns by agreeing to install a dewatering system to stabilize the cliffs next to the drilling site.
If mayoral aspirant Yaroslavsky has his way, the Oxy project will again inflict political damage, with Bradley’s 1985 “flip-flop” becoming an issue in the election for mayor next April. Bradley, meanwhile, says he is “neutral” on the rival ballot initiatives, but some Palisades residents have not yet let him off the hook. The mayor was booed at this year’s July 4 parade held in the seaside community by spectators waving signs critical of Bradley’s 1985 approval of the project.
The drilling project’s history has shown that position reversals such as Bradley’s are politically risky. City Council members Pat Russell and Peggy Stevenson fought the project in 1978 but voted for it in 1985. Though other issues were involved, both lost reelection after their successors, Ruth Galanter and Michael Woo, campaigned against Palisades drilling and later helped form the first council majority ever to oppose the company’s coastal oil plans.
Former Stevenson chief deputy Dan Wooldridge said that on the morning of the council’s crucial vote in 1985, he tried to dissuade her from supporting the project, reminding her that her late husband, Councilman Robert Stevenson, had been an ardent Oxy opponent.
“I thought she was handing Mike Woo an issue,” Wooldridge said. Woo was elected five months later.
Other former opponents such as the Los Angeles County Federation of Labor have endorsed the Oxy project after years of aligning with environmentalists against it.
There have also been reversals in the other direction. Yaroslavsky, for one, supported Oxy’s drilling plans in 1978 and joined in an unsuccessful effort to override Bradley’s veto of the project’s ordinances. He said recently that in 1978 he was concerned about American dependence on foreign oil but shifted his position after learning that the Palisades project would not produce enough oil to justify the environmental risks.
The politics of the drilling project have become increasingly sophisticated as opposition has increased. In the early going, Oxy made modest efforts to press its case in City Hall. But after twice losing its drilling districts--first in a 1974 State Supreme Court ruling and later with Bradley’s 1978 veto--the company hired high-powered lobbyists with strong City Hall connections. Tens of thousands of Oxy dollars in campaign contributions also flowed to various council members.
Oxy director Groman said the new strategy came down to one simple reason: “It finally dawned on us that this was a political fight.”
Yaroslavsky said he is “turned off” by what he sees as Occidental’s “corporate muscle” being wielded at City Hall in recent years.
“I think it’s unhealthy for the city that one corporation can so mesmerize a mayor and the City Council and the Planning Commission process that he ultimately gets his way. I think you go and you make your case on the merits and either you win or you lose. . . .”
Says Braude: “If this had been a small oil company with limited resources, (Occidental) wouldn’t have gotten to first base and you can quote that.”
Unable to match Occidental’s financial strength, No Oil has sought public support by aligning with major environmental groups and celebrities such as actors James Garner and Ted Danson. Attorney Roger Jon Diamond, a founding member of the anti-drilling group and its current president, says the group now boasts 3,500 members.
Commenting on the duration of the fight, Diamond said No Oil members once thought the struggle had ended after Occidental was turned down in 1970 by the city’s Board of Zoning Appeals for an exploratory drilling permit.
“I personally thought it was over,” Diamond said. “We assumed that we had won the battle. I had no idea it would stretch on for (another 18 years).”
There have been literally hundreds of interlocking developments in the tortuous Oxy story, whether at City Hall or the courtroom. But none stands out as more significant than the event that gave birth to the controversy--the 1969 exchange of land between the city and Oxy three years after the oil company drilled a 9,721-foot-deep core hole near Canyon Elementary School in the Palisades.
Land Swap Details Sketchy
To this day, knowledge of the events surrounding the land swap are incomplete and based on conflicting accounts.
What is known for sure about the swap is that shortly after Oxy discovered oil from its 1966 test hole operation, two years of talks began between company and city officials about a possible land exchange in Pacific Palisades.
Recreation and park officials wanted five acres of Potrero Canyon land that Oxy controlled to complete a park the city had been piecing together for years. In secret negotiations, a trade was proposed: Oxy would surrender the canyon property, which it maintained was worth $20 million and needed for its Palisades drilling operations. In exchange the company would accept a drilling site on two acres that the city would buy from the state, across Pacific Coast Highway from Will Rogers State Beach.
Whether Oxy sought the trade or agreed to it reluctantly is still a matter of dispute.
The city-Oxy negotiations involved a controversial chain of events that in late 1969 led to the land exchange. Nearly 20 years later, Occidental’s highway drilling site is at the center of the present contest between the two rival ballot initiatives.
Three years after the swap was approved, investigations into its origins and Yorty’s role were conducted by the Legislature, City Council and Los Angeles County Grand Jury.
Though no illegalities came to light, both Oxy and park officials were criticized for concealing key facts. Oxy representatives, for instance, admitted that they failed to tell city officials that the sloping canyon site--which they had contended was vital--was merely one of several drilling locations under consideration and would have been costly to prepare. Experts later said that if these facts had been known, the city could have condemned Oxy’s canyon land, taking it over at a cost much lower than the $20 million the company said it was worth and avoiding the necessity of a trade.
Park Officials Criticized
Park officials, meanwhile, were criticized for leading state officials to believe for more than a year that the Pacific Coast Highway site was necessary to alleviate an acute beach parking problem. What the city really wanted was land it could trade to Oxy, which the city got after Yorty’s office lobbied the state for language in the deed restricting use of the two-acre highway site to oil drilling.
The competing interests have used the swap for nearly 20 years to promote their respective arguments. No Oil has cited it to try to show that Occidental’s drilling site was obtained deviously. Oxy, meanwhile, recently resurrected in a 90-second Proposition P commercial its view of the swap: that for the city to prevent the company from drilling for oil on the site is to break a 19-year-old promise.
Both sides express the hope that the Nov. 8 election will end the long-running dispute. But their statements are built on a scenario of victory. Defeat is another matter.
Groman said Oxy will file suit for inverse condemnation if Proposition O passes.
“Maybe we won’t be permitted to drill for oil,” Groman said, “but the city will have to pay us for our property and will have to pay the homeowners (who have mineral leases with Oxy) for the loss of their oil.”
No Oil President Diamond, meanwhile, said whatever happens in the Nov. 8 election “will go a long way toward resolving the fight. For No Oil, this may be the end of the line.”
“However,” he added, “if we lose . . . there still has to be a Coastal Commission hearing on commercial production. . . .”
POLITICAL FLIP-FLOPS ON PALISADES DRILLING
In the long battle of whether to allow Occidental Petroleum Corp. (Oxy) to drill for oil in the Pacific Palisades, consistency often has been a casualty. The following key figures have switched positions on the issue over the past two decades.
TOM BRADLEY City Council 1963-1973 Mayor 1973-present
FROM: Opposition: In successful 1973 mayoral campaign against Sam Yorty, decries Oxy-City land swap as “Watergate West”; says despite oil shortage, “we must not sink to graft and corruption to meet those needs.” In 1978, as mayor, vetoes three Oxy drilling ordinances.
TO: Support: In surprising January, 1985, reversal, approves a revised drilling plan, saying concerns are now removed. Environmentalists charge “betrayal.”
ZEV YAROSLAVSKY City Council 1975-Present
FROM: Support: In 1978, backs the project. Later votes to override Bradley veto; agrees with Oxy that Palisades project would relieve U.S. dependence on Arab oil.
TO: Opposition: In 1985, joins council drilling foes. In 1988, co-sponsors ballot measure that would kill project. Became convinced that amount of oil was insufficient to risk drilling along coast.
PAT RUSSELL City Council 1966-1987 FROM: Opposition: In 1972 and 1978, opposes project as harmful to environment and dangerous because of unstable cliffs above site.
TO: Support: In 1985, sides with drilling; says Oxy satisfied her doubts; calls it unfair to allow drilling in Venice but not in Palisades.
PEGGY STEVENSON City Council 1975-1985
FROM: Opposition: In 1978, is one of handful on City Council to oppose Oxy bid for drilling rights; opposition so strong she refuses to meet with Oxy chairman Armand Hammer.
TO: Support: In 1985, joins pro-drilling council majority after Oxy agrees to 43 conditions; switch is cited as main reason for losing 1985 reelection bid.
DANIEL GARCIA Planning Commission 1976-1988
FROM: Support: In 1978, votes for Palisades project; cites need for new sources of domestic oil; says Oxy taking steps to lessen the concerns over unstable bluffs.
TO: Opposition: In 1984 speech, calls project in Palisades one of worst possible sites; says nothing can make it work.
WILLIAM ROBERTSON County Federation of Labor head
FROM: Opposition: In 1972, calls the project environmentally unsound and says it would employ too few workers. Opposition was restated in 1977.
TO: Support: Endorses project in 1978; says project needed to produce jobs; becomes official sponsor of 1988 pro-drilling initiative.
THE LONG FIGHT OVER DRILLING
August, 1966: Occidental Petroleum Corp. (Oxy) drills first test hole in the Pacific Palisades area, near Santa Monica city limits about a half mile inland.
November, 1966: Oxy and city park officials launch talks to swap 4.5 acres that Oxy controls at mouth of Potrero Canyon for 2 acres of surplus state land near Will Rogers State Beach. City plans to obtain the acreage from the state to make the deal with Oxy.
March-December, 1968: City parks chief William Frederickson negotiates with state to obtain the 2 acres, saying space is needed for parking to serve nearby Will Rogers State Beach; by time deed is ready for signing, however, only permitted purpose of land is for oil drilling.
1969: City obtains the state land and swap deal is concluded--Oxy’s 4.5 acres in Potrero Canyon for the city’s 2 acres near the beach. On Oct. 10, City Council unanimously approves land swap.
May-September, 1970: Homeowners and environmentalists form No Oil Inc. to fight Oxy project; they oppose drilling permit at two lengthy hearings.
June-July, 1972: City Hearing Examiner Roy Bundick urges prohibiting drilling at Palisades site; cites landslide danger; calls approval “Russian Roulette.” Superiors and Planning Commission reject Bundick recommendation; Mayor Sam Yorty administration officials intervene.
October, 1972: City Council narrowly approves drilling project; Yorty signs ordinances. Four days later, No Oil Inc. and other drilling foes sue, saying project lacked environmental review.
Jan. 14, 1973: Superior Court Judge David Eagleson overrules No Oil objections; approves drilling. But a month later state Supreme Court halts project pending environmental review.
May, 1973: Using the controversial land swap as a major campaign issue, Councilman Tom Bradley defeats Yorty in a bitter race for mayor.
Fall, 1973: Council’s Governmental Efficiency Committee holds “Oilgate” hearings into land swap; Yorty calls hearings “witch hunt”; denies, later admits, that he knew about swap before its completion; says he had bought only a “miniscule” amount of Oxy stock.
Dec. 21, 1973: Court of Appeal upholds 1972 drilling ordinances after environmental review; ruling reversed by state Supreme Court a year later, holding that an environmental impact report should have been prepared before project was approved.
Feb. 26, 1975: Oxy dismantles partially constructed oil derrick at Palisades site; drilling opponent Councilman Marvin Braude says fight apparently over.
Late 1975-1978: Oxy files new drilling application; after numerous hearings on environmental impact report, Planning Commission first rejects, then approves, project.
June-August, 1978: City Council votes 9 to 6 to approve drilling, but Mayor Bradley vetoes action as “incompatible with (nearby) residential and public recreational uses. . . .” Oxy chief Armand Hammer vows ". . . the battle has just begun.”
1982-1984: Oxy files third drilling application, agreeing to install a dewatering system to guard against landslides and indemnifying city in event of damage.
January, 1985: City Council votes 10 to 4 for drilling project; reversing himself, Bradley approves project; cites new safeguards; says unfair to prevent Oxy drilling when oil projects exist elsewhere in city; No Oil Inc. files new lawsuit.
Dec. 12, 1985: Associate Zoning Administrator Robert Janovici denies the Oxy permit; says use of Will Rogers State Beach would be inhibited; decision overruled seven months later by Board of Referred Powers.
Dec. 18, 1985: Superior Court Judge Norman Epstein holds up project; rules environmental report too vague on piping oil from project site.
July, 1987: Against staff recommendation, state Coastal Commission votes 7 to 5 to grant Oxy coastal permit to drill.
November, 1987: State Court of Appeal overturns Epstein’s decision, clearing way for drilling. Braude, with seven council co-signers, urges repeal of original ordinances approving drilling.
January-February, 1988: Planning Commission is disqualified from hearing Braude repeal motion on grounds that Oxy had hired the law firm of Commission President Daniel Garcia; by 3-2 vote, Board of Referred Powers halts repeal attempt.
March, 1988: Braude and Yaroslavsky launch ballot initiative drive to kill Oxy project; Oxy supporters respond a week later with campaign for competing measure to allow drilling; both later qualify for November ballot.