The Los Angeles City Council approved in a 12-0 vote a new ordinance that bans new oil and gas production immediately and phases out all existing oil and gas production within 20 years. The ordinance is a dramatic step, as the petroleum industry drove growth in Los Angeles during the early and mid-20th century.
Los Angeles residents have complained that emissions of benzene and formaldehyde from drilling operations have caused health issues. The ordinance states that studies “show that activities related to oil and gas operations have been associated with many potential negative health and safety impacts, especially when they occur in close proximity to sensitive uses such as homes, schools, places of worship, recreation areas, and healthcare facilities.” The city council also stated that the phase out is consistent with the city’s policies on climate change.
Phase Out of Existing Operations
The ordinance notes that there are 26 oil and gas fields and more than 5,000 active and idle wells in Los Angeles. Wells are in all parts of the city, including Wilmington, Harbor Gateway, Downtown, West Los Angeles, South Los Angeles, and the northwest San Fernando Valley.
The ordinance will make existing oil operations legally nonconforming uses that are subject to a 20-year amortization period before they must end operations. The 20-year period is stipulated in the Los Angeles Municipal Code. The city could require oil operators to end drilling sooner if it determines that the companies will be able to recover their capital investments before 20 years.
During the amortization period, companies can still service wells, including replacement of tanks, appurtenant structures, and equipment. Certain maintenance activities, including acid treatment, reworking, and sidetracking would not be permitted once the ordinance becomes effective.
Well Site Remediation
The city’s Office of Petroleum and Natural Gas Administration and Safety will draft a new city policy to ensure proper plugging and abandonment of wells and comprehensive site remediation within 3-5 years of those sites ceasing production.
Opposition
Oil companies opposed the ordinance, arguing that foreign imports would be needed to replace the 2.5 million barrels of oil produced in Los Angeles each year. Other opponents point to the fiscal effects for the city, noting a study that indicated that the oil and gas industry brings in approximately $250 million in revenue for the city.