Signal Hill Petroleum has been granted a short-term permit extension to operate on the company’s seven consolidated oil-well drill sites through Dec. 31. City staff said the oil operator has completed a number of improvements to its sites, including trash removal, fencing and installing trees.
Staff Writer
The largest oil operator and landowner in Signal Hill received unanimous approval from the City Council this week to continue operating on seven drill sites through the end of the year. However, a long-term permit won’t be considered until the City completes a major overhaul to its oil-code regulations, city officials said.
Signal Hill Petroleum, Inc., which operates more than 80 percent of the oil wells in the Long Beach Oil Field and 15 percent of the wells in Signal Hill, originally requested a short-term, six-month conditional-use permit (CUP) extension during the Council meeting on Feb. 4. After a motion by Councilmember Lori Woods, the Council agreed to increase the permit extension through Dec. 31.
City officials said the one-year extension gives a more “realistic” timeline for city staff to complete a comprehensive study on updating the City’s oil code, which regulates development on property with abandoned oil wells. Woods requested city staff to come back with an update on the study within six months.
City Attorney David Aleshire said the oil-code study, which includes working with Signal Hill Petroleum to analyze decades of data on water quality, capping oil wells and preventing methane leakage, is expected to be the most comprehensive in the country and would have major implications for future development in the city.
“The idea has been to try and figure out what is a reasonable program to try and clean up abandoned wells and make property developable,” he said. “We’ve been asking for a lot of data to be produced so that there could be the most comprehensive study that’s ever been undertaken by any municipality in the United States of an oil field and what the impacts are on land-use development.”
In Signal Hill, most new development requires costly environmental remediation, known as oil-well re-abandonment, before projects can break ground, mainly because of the City’s long history of oil extraction that dates back to the 1920s and 1930s.
Development on abandoned oil wells is required to comply with City and State regulations.
A major impetus for updating the City’s regulations, however, was the fact that in 2010 the State’s Division of Oil, Gas & Geothermal Resources (DOGGR) terminated a 22-year-old program for testing oil wells for methane leaks and reviewing development.
The State’s decision has left many developers and oil-rich cities, such as Signal Hill, on their own to conduct the oil-well development-review process, using independent petroleum engineers, according to city officials.
Making matters more complicated, the State abolished redevelopment agencies (RDAs) to fix a budget shortfall in 2012, eliminating Signal Hill’s largest funding source for incentivizing development and paying for the oil-well cleanups. City officials said that from 1990 to 2010 the City’s former RDA paid for 94 oil-wells cleanups.
Aleshire pointed out that, while the oil field is an “economically viable” resource, the City should look at creating a program that would replace redevelopment and help pay for cleaning up properties that continue to sit vacant.
“You don’t have a redevelopment agency anymore,” he said. “We want the field to be there, but maybe there needs to be a program, whereby over a period of time, out of the profits of the production of the field, some of these properties are cleaned up. Maybe there should be a program so for every new well drilled there ought to be a well eliminated, or something like that.”
Mayor Michael Noll, who said Signal Hill Petroleum has been “very good corporate citizens,” echoed Aleshire’s sentiment.
“We’re dealing in the future with no redevelopment so we’re going to have to come up with some other mechanisms,” Noll said.
Dave Slater, Signal Hill Petroleum’s executive vice president and chief operating officer, told the Council that a long-term CUP extension, possibly covering a 10-year period, would give the oil operator the ability to “plan future business” and maintain necessary permits required by regulatory agencies, such as DOGGR and the South Coast Air Quality Management District (AQMD).
City Manager Ken Farfsing noted, however, that the City wouldn’t be able to grant Signal Hill Petroleum a long-term permit until city staff updates Signal Hill’s oil code to conform to modern oil-drilling technology and developments.
“For the next operational permit, we really need to have all the facts and information before the City Council and the community, so you can make an informed decision,” Farfsing told the Council. “That process could take some time.”
Farfsing said a lot has changed since Signal Hill Petroleum was first granted its CUP in the 1990s, adding that the oil operator has invested “millions of dollars in specialized equipment and computer technology” to look at new underground oil reservoirs below Signal Hill for future oil drilling.
“A conditional-use permit, which was granted under an old oil code is a vehicle that was looked at over 20 years ago, and our feeling is that we need to really move ourselves into a more modern look at the oil code,” Farfsing said. “[Signal Hill Petroleum] may be here for another century, so our feeling is we really needed to take a comprehensive look at that.”
Colleen Doan, Signal Hill’s associate planner, said Signal Hill Petroleum, which consolidated its oil operations to seven drill sites after taking over operations from ARCO, Shell and Texaco in the 1980s, has provided data on 13 development projects and more than 360 oil wells.
She said a draft report from a water consultant indicates that, “there’s no evidence of problems or future impacts to water quality, which is good news.” Doan said a report from a petroleum engineer is expected by Feb. 25.
Once all reports are completed, the City will be able to develop a full scope for an environmental-review process, she said. Doan added that Signal Hill Petroleum has completed a number of improvements to its drill sites, including trash removal, fencing and installing trees.
Councilmember Larry Forester pointed out that Signal Hill Petroleum uses water injection to extract oil and does not conduct hydraulic fracturing, commonly known as “fracking.” The controversial procedure has recently come under nationwide scrutiny over potential for contaminating underground water wells and increasing seismic activity.
Scott Charney, Signal Hill’s director of community development, said the City has been monitoring recent public hearings on the State’s new fracking regulation, known as SB 4, and the City is planning to educate the public on oil operations in Signal Hill.
“A lot of people don’t understand the water-injection system,” he said. “One of our goals is to make sure people understand how this field is working.”
In a previous interview with the Signal Tribune, Signal Hill Petroleum officials confirmed that the company does not conduct fracking and has no intention to do so in the future, although the oil operator does employ acid-well stimulation treatments for maintenance purposes.
Other Council highlights:
Presentations Signal Hill Police Department officials presented two new public service announcements (PSAs) that the department developed with media students and staff from California State University, Long Beach. One of the videos on distracted drivers was presented during the Council meeting. Both PSAs are available on the police department’s website, the local cable public-access channel and signaltribune.com .
Housing Element update The Council unanimously approved its Housing Element update, which is a roadmap for housing development in the city for an eight-year period that ends in 2021. City staff said Signal Hill is expected to exceed regional and State requirements for accommodating affordable and moderate-income housing. The City is expected to submit the document for State approval in coming weeks, city staff said.
Police-employee misconduct Pending the city attorney’s approval, the Council voted unanimously for the City to enter into a five-year contract with RCS Investigations and Consulting LLC to conduct administrative investigations as directed by Police Chief Michael Langston as a way to increase “transparency and quality of investigations.” The police department has previously conducted its own administrative investigations of alleged misconduct on the part of its employees except in complex cases or where a potential conflict of interest existed, states a staff report.
New all-way stop The Council voted unanimously (4-0) to adopt a resolution establishing an all-way stop at the intersection of 21st Street and Raymond Avenue. Staff presented a report on recent actions taken to address resident concerns regarding traffic issues on 21st Street and Cherry Avenue and issues related to fitness activities in the hilltop area.
Budget workshop The Council announced that the City’s annual budget meeting is scheduled for May 28.
Right to Know and Vote Mayor Noll requested that and the Council agreed to have City Attorney Aleshire bring back an agenda item for the Council to vote on opposing the Taxpayers’ Right to Know and Vote initiative, which will be on the June 3 election ballot for Signal Hill. Noll said he would provide a report on a recent meeting he had with homeowners association (HOA) presidents.
The next Signal Hill Council meeting is scheduled for 7pm on Feb. 18 in the Council Chamber.
