Hermosa Beach Sued Over Offshore Oil Drilling Ban

Launching another round in the protracted, widely watched battle over oil drilling along the region’s coast, Macpherson Oil Co. has gone to court to force Hermosa Beach to honor a deal it struck more than a decade ago allowing the firm to slant drill.

The Santa Monica-based company, in documents filed last week in Los Angeles Superior Court, seeks authorization to begin tapping offshore oil fields through so-called slant wells built on city property a few blocks from the beach.

Macpherson and the municipality signed a lease contract for the project in 1986, and the oil company underwent a lengthy regulatory and permit process.

Meanwhile, a coalition of residents and environmental groups battled the project on political and legal grounds, getting city voters to approve an oil drilling ban in 1995 and suing the city, in 1993 and again in 1997, to overturn the lease.

In September, drilling opponents persuaded the City Council to cancel the project.

However last month, Superior Court Judge Kurt J. Lewin ruled that the voters’ ban could not be applied retroactively to Macpherson. The judge said the project, which has undergone an extensive environmental review, could be stopped only if there was significant new information about its potential effects on public health, safety and welfare.

“The city breached the contract. That leaves us with no alternative but to go to court,” company President Donald R. Macpherson Jr. said after the council voted 3 to 0 last month to reaffirm its decision to kill the project.

Under the terms of the lease, Macpherson would drill nearly three dozen wells at the city maintenance yard, about five blocks from the beach. After being drilled downward, the wells would then slant west to siphon oil from beneath the ocean.

Oil company executives estimated that they could extract up to 30 million barrels of oil and generate $12 million annually during the 25- to 35-year life of the project. Some of that money would find its way into city coffers as taxes, which was what attracted Hermosa Beach officials in the first place.

Neighbors charged that the project would harm the city and the beach.

Rosamond Fogg, leader of Hermosa Beach Stop Oil, the group formed to fight the project, said Monday that the coalition is preparing to appeal Lewin’s ruling.

“It is also my hope that Judge Lewin, upon reviewing the safety issues, will not second-guess the city’s decision to quash the project,” Fogg added.

Macpherson contends in court documents that its lease is binding, and that the oil reserves it contracted to extract are being siphoned off by others at drill sites adjoining the city. The company is seeking reparations from the city based on estimated losses in excess of $100 million. It also is asking the court to require the city to allow the project to proceed.

The three council members who voted in September to halt the project based their decision largely on the report of a consultant, who said the project was as “safe as any comparable modern operation” but did pose some risks, including a 1 in 7,000 chance of one or more deaths.