Hermosa Beach Votes to Kill Drilling Deal and Pay Oil Company Millions

Wednesday, March 04, 2015

The tiny Southern California town of Hermosa Beach (pop. 20,000) banned future oil drilling in 1932, after five wells had been pumping for two years. But the industry never gave up on tapping the known reserves that stretch out into the ocean from beneath the 1.4-square-mile enclave.

During the OPEC-induced gasoline crisis 52 years later, the city wavered and voters approved an exemption that would have allowed a new drilling project. But controversy ensued and in 1995 voters put the ban back in place. That led to litigation by the Macpherson Oil Co. three years later, which stretched until 2012, when the city agreed to put the question before the voters again.

On Tuesday, they overwhelmingly voted to kill the project at a huge financial cost.

Measure O would have allowed Bakersfield-based E&B Natural Resources Management to drill 34 oil wells on 1.3 acres in the city’s maintenance yard, which is surrounded by businesses, residences and a greenbelt, and is just blocks from the beach. It is essentially the same Macpherson project to slant drill into oil reserves beneath the ocean floor that the city approved in 1992.

The last of the city’s active wells was plugged and abandoned in 2005.

The agreement reached with Macpherson, and passed along to E&B when it bought the contract, requires Hermosa Beach to pay the oil company $17.5 million if voters rejected the project again. That’s a tough nut for a city whose annual operating budget is around $40 million. But they have $7 million squirreled away in a special fund and have pledged to pay $800,000 a year until the debt is cleared.

Although all the numbers weren’t in late Tuesday night, the turnout was described as “massive” in media reports. Of course, massive in American politics means that somewhere in the vicinity of half the city’s 13,800 registered voters turned out. Voters were rejecting the measure 3-1.    

All five members of the city council, including the mayor, opposed Measure O. Mayor Pete Tucker told the New York Times, “We are not an oil town. If it gets us out of this constant, constant oil issue we’ve had hanging over us for 30 years, I think it’s money well spent.”

E&B spent a reported $2 million on the campaign for Measure O, around 10 times what the opposition, led by Heal the Bay, could muster. The company estimated that the city would have received $627 million over 30 years if the project were approved.

–Ken Broder


To Learn More:

Hermosa Beach Oil Drilling Measure Goes Down to Defeat After Massive Voter Turnout

(by Paul Teetor, LA Weekly)

Hermosa Voters Reject Drilling for Oil in Bay (Heal the Bay)

Hermosa Beach—Remember When—Beach Boys (by Woodrow Clark, Huffington Post)

California Beach Community to Decide if It’s “an Oil Town” (by Adam Nagourney, New York Times)

Tideland Oil & Gas Drilling in California: Is Santa Monica Bay at Risk? (National Resources Defense Council and Heal the Bay) (pdf)

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