Allenco Energy Co. facility (photo: Nick Ut, Associated Press)
An oil pumping facility in a Los Angeles residential neighborhood that sickened residents for years and “horrified” Senator Dianne Feinstein (D-California) when she toured the area just before its closure last November might resume operations when it completes $700,000 worth of upgrades.
The U.S. Environmental Protection Agency (EPA) announced last week that it reached an agreement with Allenco Energy Inc. for improvements on the two-acre site located between downtown and the University of Southern California (USC). Allenco voluntarily closed after being hit with a series of citations for violating the federal Clean Water and Clean Air Acts.
The South Coast Air Quality Management District (AQMD) received hundreds of complaints since 2010 about noxious odors and illness in the area around the 2-acre site, which is operated by Allenco but owned by the Catholic Archdiocese of Los Angeles. People complained about respiratory ailments, dizziness, nosebleeds and other afflictions for years, but it wasn't until EPA investigators suffered similar symptoms after touring the facility that action was taken.
The EPA said in its press release announcing the agreement that it had found problems with “the inspection, testing and preventive maintenance of flammable gas and flame detectors, firefighting equipment, and oil storage tanks as well as pressure vessels and associated piping systems.” The agency also didn't care much for the 30-foot open trench filled with what the Los Angeles Times described as “noxious mixtures of mostly oil and water.”
Allenco agreed to fix all that stuff and let the EPA know about it at least 15 days before reopening. The company indicated it could complete its task within the next few weeks.
But making peace with the EPA doesn't guarantee Allenco can crank up production on its five wells. The city attorney's office filed a lawsuit in Los Angeles County Superior Court to block the facility from reopening after alleging the company willfully ignored notices of violations from multiple agencies.
The state Division of Oil, Gas and Geothermal Resources and the L.A. County Department of Public Health are also poking around Allenco.
The oil facility has operated intermittently since the 1960s, but Allenco has only been the operator since 2009. The wells were closed in 1999, according to the U.S. Department of Energy, when market prices and oil dissipation made it unprofitable to continue. But technology advances, including acidization, made the site profitable again. Acidization injects large amounts of hydrochloric or hydrofluoric acid into wells to dissolve rock formations and allow easier access to gas and oil.
Production resumed in 2005 and increased 400% between 2009 and 2010, according to the state. That was about the same time neighborhood complaints skyrocketed.
Allenco owner Peter Allen told the Los Angeles Business Journal that he will lose his life savings and dozens of workers will lose their jobs if he has to close the operation down permanently.