Impact Report Clears Hermosa Oil Drilling Plan

Hermosa Beach’s long-delayed effort to get its share of the South Bay’s petroleum reserves has moved a step forward with the completion of an environmental impact report. But the project faces more hurdles, and drilling is unlikely to begin for another six months to a year.

The consultant’s report, prepared by Irvine-based Ultrasystems Inc. for the city, generally concludes that an “urbanized” oil recovery effort, which utilizes various mitigation measures, will have little effect on the surrounding environment.

A public hearing on the report will be held by the Planning Commission, probably late next month, when another obstacle may surface.

Drilling Approved

Two 1984 initiatives approved drilling at the city’s maintenance yard at 6th Street and Valley Avenue and at the closed South School site, a block away on Valley. But two other initiatives that passed by substantially larger margins in 1984 and 1986 mandate preserving the school land as open space. Normally, in cases of conflicting initiatives, the one with the most votes prevails.

The city plan is to confine the drilling to the city yard and use a portion of the school property for storage and processing tanks. But if the open-space mandate of the initiatives stands, the city does not have sufficient room at the maintenance yard to carry out the plan evaluated in the environmental impact report.

After about two years of paper work and wrangles with the State Lands Commission, which must ultimately approve oil drilling in the tidelands, the city contracted in 1986 with Marina del Rey-based Macpherson Oil Co. to carry out the current drilling plan.

Donald Macpherson Sr., a 30-year veteran of oil-recovery operations in California and Texas, said last week that he hopes to begin work at the Hermosa Beach yard in six months to a year.

“It’s been a long haul getting to this point,” he said. “But we’re confident that the oil is down there and we’re committed to do everything we’re asked to do to fit our operation into the environment down there.”

Tidelands extend three miles out to sea from the onshore tide level. Land-based operations reach any oil under the ocean floor by drilling down and then slanting the bores at angles up to 90 degrees.

Cities like Hermosa Beach hold the offshore mineral rights in trust, but generally the state gets a cut of any revenues generated from oil and gas operations, and a city’s share is often restricted to public improvements in the tidelands.

According to the consultant’s report, Macpherson will start with three exploratory wells at the city yard, using temporary production facilities at that site. If tests prove promising, up to another 27 wells will be drilled at the yard and permanent production facilities will be built on the nearby school property.

To make room for the drilling operation, the city’s maintenance yard will be moved to the school site. Trucks will haul the oil and waste products until production exceeds 800 barrels a day, when oil and gas pipelines will be laid along Valley Drive and up Herondo Street to connect with an existing Chevron pipe at Prospect Avenue.

The environmental report reviews about 20 factors, ranging from noise and air quality to visual aesthetics and issues of public policy. The 175-page document, plus appendixes, outlines elaborate measures to minimize potential problems and make the operation blend into the surroundings.

Unavoidable Impacts

It estimates that the exploratory and drilling phase will take up to three years and acknowledges some “unavoidable adverse impacts” during that period, such as an increase in noise levels, emissions from trucks and construction equipment, and a 135-foot derrick visible throughout the neighborhood. It will be sound-dampened and camouflaged with neutral coloring.

Over the long term, the report says, “some hydrocarbon odor may be detected periodically” and the upper portions of camouflaged, 16-foot storage tanks on the school property will be visible from some locations.

The report may be viewed by the public at City Hall.

A primary motivation for the Hermosa Beach project originally was a perception that Redondo Beach has been sucking up all the oil from the northern edge of the Wilmington-Torrance field that extends under the two cities.

Sheila Schoettger, Redondo Beach’s harbor director, said her city may have drained a bit of the reserves under Hermosa Beach in its early oil-recovery efforts, which began in 1955.

Complaints Are Rare

“But it’s not like pulling a cork out of a bottle and everything runs out,” she said. “We believe that any drainage there may have been stopped long ago.”

The Redondo Beach experience offers some encouragement on the environmental front to its neighboring city. Schoettger said the city rarely receives any complaints about noise and odors near the well site at Harbor Drive and Beryl Street.

“A lot of people who visit the harbor area or live there don’t even know that we have oil wells,” she said.

However, if the output from those wells is any indication, Hermosa Beach may not find much black gold. Schoetter said Redondo Beach, which started with 58 wells, now has only 15 or 20 “in some sort of active state. It’s not going well. We’re definitely on the downside.”

She said production has dropped to about 45,000 barrels a year, down from a peak of 705,000 in 1958. Total revenue over that span came to $14 million, she said, with the city collecting only about $175,000 last year.

“We’re definitely not getting high-grade oil, so the payoff is low for that reason, also,” she said. “About 98% of what comes up is water.”

Early estimates of the hoped-for bonanza in Hermosa Beach ran as high as $25 million over the 35-year life of the proposed project. City Manager Kevin Northcraft, a relative newcomer who missed the early years of the project, was reluctant to offer a current estimate. But he said the oil revenue could be substantial.