L.A. officials take new aim at Allenco drill site near USC

A man jogs past a gate to an oil production site operated by Allenco Energy Inc. in the University Park neighborhood in 2013, shortly after operations there were suspended.
(Francine Orr / Los Angeles Times)

Under a new plan being floated at City Hall, officials could try to block the reopening of a South Los Angeles oil site where neighbors once complained of nausea, nosebleeds and other ailments.

The idea germinated last year, when Councilman Gil Cedillo said he wanted the city to use a rarely exercised power under its Municipal Code to cancel “oil drilling districts” that were no longer active. Such districts cover areas where oil and gas drilling has been authorized by the city.

Cedillo was specifically eyeing the Allenco Energy Inc. site, which halted operations nearly five years ago amid a public outcry.


Federal and local investigations had been launched, and environmental officials had been sickened by fumes while visiting the site roughly half a mile north of USC. After the Allenco site shut down, City Atty. Mike Feuer sued and got a court order that requires Allenco to follow new requirements if it wants to restart operations.

That has not reassured community activists, who have called on the Roman Catholic Archdiocese of Los Angeles, which owns the University Park site, to shutter it permanently.

If it reopens, “we fully expect that the neighborhood residents will still get sick,” said Rabeya Sen, policy director for the nonprofit Esperanza Community Housing.

In a recently released report, Petroleum Administrator Uduak-Joe Ntuk said that the drilling district that covers the Allenco site did not meet city requirements to be terminated for inactivity, as Cedillo had initially suggested. However, Ntuk said that under the City Charter, council members could simply repeal the drilling district.

A Los Angeles City Council committee focused on energy and environmental issues voted Tuesday to back that idea, sending it to the council for approval. Cedillo said the move would kick off a complicated process that could potentially prevent oil operations at the Allenco site, but that he hoped the city could reach a simpler solution.


“My preference is to negotiate a solution that everyone can sign off on, rather than get caught up in a bureaucratic process,” Cedillo said, suggesting that the site could be repurposed for housing.

Allenco did not respond to emails seeking comment on the proposal. The archdiocese said that under its leasing agreement with the company, it does not have the right to shut down the site, despite public statements by Ntuk that the organization could terminate the lease.

Nonetheless, “we are working with the city and Allenco to find an alternative use for the site that is in the best interest of the community, royalty holders and all other stakeholders,” said Itzel Magana, media and public relations manager for the archdiocese.

The committee also tentatively backed plans Tuesday to initiate a new system of annual inspections of oil and gas sites across Los Angeles. Ntuk argued in a report that such a program would help prevent leaks and spills, reduce the risk of equipment breakdowns and ensure that sites were in line with safety regulations.

The city has been hampered by a decentralized system of inspections carried out by different departments that have no clear way to coordinate with each other, Ntuk wrote. Under the proposed program, city inspectors would visit oil and gas wells and production facilities, check that sites are being run in line with city requirements, and track permits and other records for each facility.

City Councilman Paul Koretz said that while other agencies already inspect oil and gas sites, he thought they had “been falling down on the job.”


“They don’t have to live with the mistakes in L.A. — we do,” Koretz said.

The idea has spurred questions about whether L.A. could overstep its legal authority. In a letter to city officials, Southern California Gas Co. argued that its facilities would not be subject to the new system of inspections because it is a public utility regulated by the California Public Utilities Commission, which “precludes the city from imposing new or supplemental regulations” on its facilities.

Ntuk told committee members that the city was still researching those issues.

Rock Zierman, chief executive of the California Independent Petroleum Assn., said in a statement Tuesday that the industry “is already under the toughest regulations in the nation,” but that his group was open to the city joining other government agencies to inspect sites, as long as proposed changes were fully vetted publicly.

At Tuesday’s meeting, others raised concerns about stiffening city rules on the industry. Some environmental and community activists have pressed for new restrictions that would eliminate oil and gas production near L.A. homes and schools. That idea, which was not part of the approved proposal, has alarmed industry and some labor groups.

Driving the petroleum industry away would send it to countries with less oversight, they argued. “Let’s keep the jobs local, the workers and residents safe, and the environment closely monitored, rather than send the industry off to Third World countries,” said Gus Torres, a business representative for United Association Local Union 250, which represents pipe fitters.

If the council backs the plans for the new inspection program, city attorneys would draft an ordinance to create it, which would come before lawmakers for approval.


Twitter: @AlpertReyes