The Signal Hill City Council is preparing to vote on a proposal that would allow Signal Hill Petroleum to drill oil in the city for the next 20 years. If passed, it will be the longest permit extension the company ever has received.
Chief Operating Officer Dave L. Slater said the company wants a long extension because new subsurface seismic imaging technology has assured them that the oil drilling sites they control have at least 20 years of production left in them.
Slater said “on average,” the company’s wells have 50 years of production or more.
Iraj Ershaghi, director of the Petroleum Engineering Program at the University of Southern California, compared this technology to ultrasound technology used to view a fetus in utero. He told the Signal Tribune that the technology has “revolutionized” the oil industry and has substantially improved the chances of drilling a successful oil well.
Ershaghi said that unless issues with an oil well arise, many oil wells can produce oil for up to 75 years.
According to city documents, 62 wells across the seven drill sites are operated by Signal Hill Petroleum.
The company also owns 95% of the Long Beach Oil Field comprising 1,550 wells. The last oil well created was in 2019, Slater said, and they are still finding areas “in and around the field” that haven’t been drilled before.
Signal Hill Petroleum has seven sites around the city with pumps that extract oil; the company also owns storage tanks, water injectors, gas processing facilities, test stations and more throughout the sites.
The seven sites occupy almost 22 acres of Signal Hill and extract about 1 million barrels of crude oil a year. Roughly 1.5% of Signal Hill is occupied by oil drilling sites.
The oil extracted on these sites is transferred via pipeline to be sold to the Southern California Gas Company and the City of Long Beach.
Community Development Director Colleen Doan said that Signal Hill receives approximately $300,000 in oil taxes citywide, less than 1% of the City’s General Fund revenue.
Since 1998, the city has been issuing Conditional Use Permits (CUP) to Signal Hill Petroleum for all of its sites and operations, instead of separate permits for each site. The city has extended the CUP 10 times since then. A conditional use permit allows operations not generally permitted by zoning.
Here is the history of permit extensions granted to Signal Hill Petroleum:
- June 16, 1998: five-year permit introduced
- Oct. 1, 2002: 10-year extension
- Oct. 1, 2012: one-year extension
- Sept. 4, 2013: six-month extension
- Feb. 4, 2014: one-year extension
- Dec. 2, 2014: two and a half-year extension
- June 13, 2017: one-year extension
- June 12, 2018: one-year extension
- June 11, 2019: one-year extension
- Aug. 10, 2021: two-year extension
The new extension, if approved, will be the longest CUP extension granted to the company since its inception.
The extension would allow operations to continue as they have for the past 39 years, and allow the company to re-drill existing wells and drill up to 46 new wells. A maximum of five new oil wells can be drilled per year, according to city documents.
Signal Hill Petroleum said on average, they would be drilling two new oil wells a year with electric-powered drilling equipment.
As the company’s operations have grown, so have the conditions set by the city. Signal Hill Petroleum must follow a list of regulations regarding landscaping, noise mitigation, maintenance upkeep and more.
Signal Hill’s Community Development Director Colleen Doan said the department visits the 50-plus sites operating under Conditional Use Permits in the city throughout the year and sends a report to the Planning Commission. If a site is not following the set conditions, they are given a deadline to make the necessary changes.
Signal Hill City Council reviews the reports every year in February and March. Doan said in her 11 years with the City, the department has not yet had to revoke a CUP.
The permit application includes plans to update the gas plant located at 1215 E. 29th St. The site on 29th St. is a gas processing facility, where oil is cleaned by separating impure fluids to meet industry standards.
History of oil drilling in Signal Hill
Previously known as Barto Oil Company, Signal Hill Petroleum has been extracting oil from land in the city since 1984, when it acquired its first drill site from the Shell gas company. Over the next 15 years, the company acquired several more sites from gas companies in Signal Hill, such as Exxon, Texaco and Arco.
Before oil was discovered in Signal Hill, the hill was used by Native American tribes to send smoke signals to one another. By the turn of the 20th century, the hill was dotted with mansions from residents who wanted views of Southern California.
The United Oil Company was the first company that tried, and failed, to drill oil in Signal Hill in 1917; the idea was abandoned for years. The Shell gas company started another oil well on June 23, 1921 and forever changed the city’s history. That first well, known as Alamitos Well Number 1, has since produced over 1 billion barrels of oil and cemented Signal Hill as one of the most oil rich lands in the country.
Signal Hill elected to become its own city in 1924 in order to avoid paying Long Beach’s taxes on oil.
Oil has forever been a part of the fabric of Signal Hill’s history, and continuously reported on in past editions of the Signal Tribune:
An August 28, 1925 edition of the Signal Hill Beacon covers new oil wells in Signal Hill. (Courtesy of Signal Hill Public Library) 
A September 11, 1925 edition of the Signal Hill Beacon covers a record-breaking year of oil production for the Shell Company. (Courtesy of Signal Hill Public Library) 
A newspaper article in the June 2, 1950 edition of the Signal Hill Tribune marks the 29th anniversary of the Long Beach oil field. (Courtesy of Signal Hill Public Library) 
A newspaper article in the June 2, 1950 edition of the Signal Hill Tribune details some of the successful oil drilling operations of that time. (Courtesy of Signal Hill Public Library) 
A June 23, 1950 newspaper article printed in the Signal Hill Tribune remarks upon the excitement surrounding the success of Signal Hill and California oil fields. (Courtesy of Signal Hill Public Library) 
A June 16, 1950 newspaper of the Signal Hill Tribune reports on the success of Signal Hill oil wells. (Courtesy of Signal Hill Public Library) 
A newspaper article from the July 14, 1950 edition of the Signal Hill Tribune details a permit granted to oil drilling companies in Signal Hill, and residents’ opposition to the permit. (Courtesy of Signal Hill Public Library) 
An ad for the Camay Drilling Co. in a June 2, 1950 edition of the Signal Hill Tribune. (Courtesy of Signal Hill Public Library) 
Advertisement for the Oil Well Service Co. in a 1950 edition of the Signal Hill Tribune. (Courtesy of Signal Hill Public Library)
The Environmental Impact Report for the permit extension is currently being circulated and finalized. The report will be presented to the City Council and the Planning Commission at a public hearing by late 2023, City Manager Carlo Tomaino told the Signal Tribune.
The purpose of an Environmental Impact Report is to provide the City and public with the full environmental effects of a project and suggest mitigations to minimize significant effects.