The Local Elections : Outcome May Mark the End of Oil Fight

Despite a campaign threat of a billion-dollar lawsuit, Occidental Petroleum Corp.’s decades-long quest to drill for oil beneath Pacific Palisades may have finally ended with the narrow voter approval of Los Angeles Proposition O.

After Tuesday’s election results, Occidental was still weighing its legal options, company officials said.

But the combination of the win for Proposition O and the resounding 2-1 defeat of Oxy’s rival Proposition P was being interpreted by drilling opponents as a probable finale to the 22-year coastal drilling fight.

Helped by strong Westside and Hollywood support, Proposition O won 52.3% of the vote to repeal three Occidental drilling ordinances. Proposition P, promising more money for police and schools while protecting the coastal drilling project, attracted support from only 34.3% of the city electorate.

Breakdown of Results

An analysis of returns showed the anti-drilling measure won in seven of the city’s 15 council districts and losing in several minority areas and several sections of the San Fernando Valley.

While the fight over Palisades drilling may be over, at least for now, the controversy has spawned a potential major issue in the next mayoral race. Proposition O co-sponsor Zev Yaroslavsky told a packed news conference that the anti-drilling measure amounted to a referendum on Mayor Tom Bradley’s 1985 approval of Oxy’s plans to sink up to 60 oil wells adjacent to Pacific Coast Highway across from Will Rogers State Beach.

Yaroslavsky ducked questions about his expected challenge of Bradley and to what extent the Proposition O victory may have helped him. He did take the opportunity to mock Bradley, who earlier Wednesday morning said he would enforce Proposition O.

“Of course, he’s going to enforce it. Under the law, he’s required to enforce it. Thanks a lot,” Yaroslavsky said with sarcasm. “This is the second time in two years that the mayor has been on the wrong side of an environmental issue in this town.” The Westside councilman was referring to Proposition U, which ushered in several slow-growth policies. As with O, Yaroslavsky co-authored U with Councilman Marvin Braude.

A jubilant Braude said, “I think (the drilling fight) is over. The people have spoken and that’s the important thing. I can’t conceive of another application coming in for oil drilling that would not be rejected out of hand by the appropriate authorities.”

But Braude and other longtime drilling opponents have celebrated the end of the drilling fight in years past only to see Occidental dust itself off and come back fighting. There was no indication Wednesday that the oil company is now willing to abandon its 22-year quest to drill at the Palisades site.

Occidental officials issued a brief statement that expressed disappointment over Tuesday’s balloting and concluded that “many voters were misled by the Prop O TV ads and mailers which falsely argued that Occidental wanted to drill for oil on the beach or in Santa Monica Bay.”

Occidental general counsel Gerald Stern’s written statement concluded with, “We have made no decision on what steps we might now take.”

But Stern’s statement also hinted that the oil company, despite the vote, believes it has various legal remedies that may be pursued.

“Proposition O breaches the commitment made by the city when we traded our land to the city expressly for the right to drill as set forth in the grant deed and discriminatorily deprives us of our rights,” Stern said. He was unavailable to elaborate.

During the campaign, Occidental threatened to file a $1.3-billion suit if Proposition O prevailed. Whether that threat will now be carried out was unclear.

Both Braude and Yaroslavsky scoffed Wednesday at a possible court challenge, saying that it takes only $100 to file a lawsuit but much more to win one.

“They can threaten and they have threatened to file a lawsuit and if they do . . . we’ll see them in court,” Yaroslavsky said. “I have responsibility as chairman of the Finance Committee for the general fund of this city. I have not lost one wink of sleep worrying about Occidental’s potential lawsuit against the city.”

Braude said a lawsuit was merely an effort by Occidental to intimidate the city.

Any oil company lawsuit, given the history of this complex controversy, would likely take years to resolve.

Inland Neutral Zone

Proposition O, however, may have provided Occidental another avenue to the Palisades oil that does not involve the courtroom. Besides killing the Oxy project, Proposition O also establishes an inland zone, 1,000 yards from the mean high tide line, in which new oil derricks will be barred. Nearly 15 years ago, Braude sought a similar restriction, but it was killed on the council floor.

Many Proposition P ads charged that the 1,000-yard inland barrier contained a loophole that would allow drilling under every beach in the city. A derrick could conceivably be erected outside the zone, with slant-drilling toward the beach then occurring under this loophole theory. Whether Occidental might consider moving its project beyond the 1,000-yard zone was uncertain.

And Braude was noncommittal when asked Wednesday if he would oppose such a future effort by Occidental to extract the Palisades oil from another site.

“(Occidental) would have to apply for (drilling rights) in the regular course,” Braude said. “They will have to go through public hearings, and decisions will have to be made at that time.”

Both Braude and Yaroslavsky voiced surprise at the Proposition O campaign’s ability to counter a 2-1 spending advantage that Occidental enjoyed in the record-setting, and often confusing, campaign.

Yaroslavsky called Tuesday’s election results a “victory over one very special, selfish, greedy corporate interest which wanted to put its own interests above the interests of the public. It appears that all the money in the world couldn’t fool the people of this city.”

Yaroslavsky also opened the door to retreating from his statement last August that he would not hire the campaign firm headed by Michael Berman and Carl D’Agostino (BAD) to run his mayoral campaign. The firm had been criticized for a controversial memo to Yaroslavsky that Bradley supporters said was racially divisive.

Praising the Berman-D’Agostino firm for running a “clean, straightforward campaign” on behalf of Proposition O, Yaroslavsky contrasted the BAD performance with the political consultants that ran Occidental’s drilling campaign. Yaroslavsky said Proposition P’s campaign theme that drilling opponents in the Palisades did not mind drilling elsewhere was calculated to be racially divisive and charged that Bradley was considering using one of the firms in his upcoming campaign.

Bradley responded through a spokesman that he had not hired anyone for his reelection bid and added, “I trust Mr. Yaroslavsky is not weaseling out of his promise to me and to the people of this city not to hire the BAD campaigns should he decide to run for mayor.”