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State Purchases Active Oil Wells Near Downtown--for $1

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TIMES STAFF WRITER

In a deal that looks good on paper, the state of California on Thursday purchased a pair of producing oil wells in downtown Los Angeles for $1.

But the wells put out only about four barrels a day and the crude they yield resembles clumpy goo more than the black gold of legend.

What’s more, they are in an old, shallow field of mostly capped wells that city and state officials fear could send oil seeping into homes, businesses and neighborhood streets one mile northeast of Los Angeles City Hall.

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Hoping to avert such a disaster, the state Department of Conservation plans to continue operating the wells, which were targeted for abandonment by their owner, to relieve pressure about 900 feet beneath the surface.

At a news conference in front of the wells on a hillside at Alpine Street and Beaudry Avenue, Department of Conservation Director Edward Heidig said: “We’re not going to solve the budget deficit with these wells.

“It’s a public safety issue,” he said. “Less than 3% of the 1,500 wells that operated here are still producing, and they were not all capped properly.

“An oil field is a lot like a boiling kettle,” he added. “When you put a lid on it, it wants to seep out . . . and that can present a fire hazard, a water pollution hazard and other unhappy results.”

The wells are expected to be maintained for the state by Manley Oil Co., a 100-year-old family-owned firm that operates 15 wells in the field, which peaked in production at the turn of the century.

Under a tentative agreement with department officials, the company each month will bill the state $100 and 50% of the oil produced, said Bruce Manley, president of the firm.

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“Given the current economic and regulatory conditions that small producers are facing in Los Angeles,” Manley said, “this is an option that we may need for other locations in the future.”

State officials hope to avoid getting into the business of taking over troubled oil wells.

“This is the first time we’ve done anything like this,” Heidig said. “It’s only a stopgap measure.”

Meanwhile, City Councilman Mike Hernandez has called on the city’s Public Safety, and Environmental Quality and Waste Management committees to address potential liability and safety issues related to the oil field.

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