AllenCo Energy Co. facility (photo: Nick Ut, Associated Press)
The city of Los Angeles has around 1,000 active oil wells, many of them approved years ago and, in the practice of the day, were governed by municipal rules specific to each drilling site. They have not been organized in any systemic fashion that can be accessed by the public or regulators.
When the Los Angeles Times read through the archive, its initial focus was the drilling site operated by AllenCo Energy Inc., a two-acre site located between downtown and the University of Southern California (USC). AllenCo voluntarily closed in November 2013 after being hit with a series of citations for violating the federal Clean Water and Clean Air Acts.
It was generally thought that Los Angeles lacked the legal authority to investigate complaints from neighbors of sickening fumes, respiratory ailments, dizziness, nosebleeds and other afflictions. The South Coast Air Quality Management District (AQMD) received hundreds of complaints since 2010 but took awhile to get rolling.
It wasn't until U.S. Environmental Protection Agency (EPA) investigators suffered similar symptoms after touring the facility, and U.S. Senator Barbara Boxer (D-California) said it should be shut down, that action was taken and AllenCo closed to regroup.
The AQMD announced in September that it had reached an agreement with the company and the EPA is close to an accord. Residents of University Park apparently are not happy.
But the Times found that the agreement with Atlantic Richfield Co. and Standard Oil Co. of California was pretty specific about the city's power and responsibility to protect the public. The companies were required to provide “effective housekeeping” and not subject the neighborhood to noxious fumes. The conditions included recognition that the city's chief zoning administrator could set safety conditions and make cleanup demands, and enforce them legally.
The five wells on the site were closed in 1999 when market prices and oil dissipation made it unprofitable to continue. But technology advances, including fracking and acidization, made the site profitable again.
Production resumed in 2005 and increased 400% in 2009 and 2010, about the time that neighborhood complaints skyrocketed. The agreement stipulates that any company that acquires the drilling rights is covered by the agreement. AllenCo obtained the rights six years ago.
The Times said that the mayor's office and the local city councilman's office asked the city's planning department two years ago what the existing conditions for the AllenCo property were and never heard back.