Inglewood Oil Field: Background
The Inglewood Oil Field (IOF) is located within Culver City and the unincorporated area of Los Angeles County (“County”) known as Baldwin Hills. The entire surface boundary limits of the IOF, including lands within both the City and County, totaled approximately 1,000 acres as of 2008. The portion of the IOF that is solely within the limits of Culver City (“City IOF”) totals 77.8-acres. (Surface boundary limit refers to the physical extent of the ground surface for which the Oil Field Operator has access and land owner permission to establish and conduct oil drilling activity. Subsurface and mineral right limits may have different boundaries than the surface boundary.)
The IOF has had several Oil Field Operators since its origination in the 1920’s. Most recently, in 2014 Freeport McMoRan Oil and Gas (FMOG) became the Oil Field Operator for the oil and gas facilities throughout the entire IOF after purchasing the rights from Plains Exploration and Production Company (PXP). In July, 2016, FMOG sold its onshore California oil and gas properties (including the IOF) to Sentinel Peak Resources California LLC (SPR). SPR assumed operation of the IOF, including the City IOF, as of January 1, 2017.
Following a series of accidental gas release and odor events in late 2005 and early 2006, community and City interest in the IOF activities peaked and the County initiated the process of establishing regulations for oil and gas production activities within the unincorporated County portion of the IOF (the “County IOF”). In October 2008, the Los Angeles County Board of Supervisors adopted the Baldwin Hills Community Standards District (County CSD), which established the oil and gas regulations, and related Environmental Impact Report (CSD EIR). The County CSD regulations were supplemented through a Settlement Agreement resulting from subsequent litigation, challenging the adequacy of the CSD EIR under the California Environmental Quality Act (CEQA), and only are applicable to the County IOF.
The CSD and the Settlement Agreement can be viewed on the County’s web site.
Following the County process and litigation settlement, the City of Culver City initiated the process of establishing more robust regulation for oil and gas production activities within the City IOF (with the intent of replacing the existing regulations set forth Chapter 11.12 of the Culver City Municipal Code). In April 2013, Culver City released to the public the Discussion Draft Oil Drilling Regulations for the Culver City Portion of the Inglewood Oil Field (the “Draft Drilling Regulations”). Following an informal public review and comment period, the City Council adopted (in June 2014) a resolution declaring its intention to initiate preparation of the Inglewood Oil Field Specific Plan for the City IOF (the “Draft Specific Plan”). Although the provisions of the Draft Drilling Regulations and Draft Specific Plan are unique to the circumstances of the City IOF, its surrounding community and desired level of City oversight, many of the reporting and monitoring requirements are modeled in part from the County CSD regulations.
Since June 2014, City staff has worked with a team of consultants to prepare the Draft Specific Plan and related Draft Environmental Impact Report (the “Draft EIR”). Prior to and during that time, the City outreached to PXP and then FMOG in an effort to coordinate and collaborate on the planning process, including an understanding from the operator of the existing oil field operations. In the absence of a cooperative interest from either party at that time, the City instead moved forward with the Specific Plan process as a City-initiated effort and had targeted a public release date of March 30, 2017 for both the Draft Specific Plan and Draft EIR.
Following SPR’s acquisition of the IOF and its efforts to reach out to the City to request an opportunity to discuss the Draft Drilling Regulations, the release date of the Draft Specific Plan and Draft EIR was postponed in order to conduct an April 17, 2017 community meeting and provide SPR the opportunity to present its request to the City Council as to options for allowing SPR to participant more directly in the regulatory process for the City IOF.
On April 17, 2017, the City Council held a community meeting to discuss and consider a temporary hold on the Inglewood Oil Field (IOF) Specific Plan Project and related Environmental Impact Report (EIR) in order to consider a request from the new IOF operator, Sentinel Peak Resources (SPR), to participate in the Specific Plan process as a project applicant. Such discussion included an evaluation of options related to the processing of the Draft IOF Specific Plan and related Draft EIR.
After hearing from the public and SPR, and thoroughly discussing the matter, the City Council authorized the Oil Drilling Subcommittee (Clarke and Sahli-Wells), in conjunction with City staff and consultants, to enter into discussions with SPR over the next 90 days for the purpose of drafting a proposed working agreement between the City and SPR, which should contain certain mutually agreeable guiding principles, action items and other discussion points, including but not limited to:
Reimbursement of City’s costs including, but not limited to, costs to date relating to the preparation of the Draft Specific Plan and EIR, or assistance with funding of other City projects with a connection to the oil field;
A voluntary commitment that SPR will not submit any applications for any new wells during these discussions, and/or at any time a written agreement is in place;
Agreement that either party may withdraw from the discussions at any time; and
SPR’s agreement that if the oil field is sold during the term of any written agreement, such purchase agreement would clearly state that the new owner is subject to the terms and conditions of the existing agreement between the City and SPR.
The City Council further directed:
Prior to the end of the initial 90-day discussion period, the Subcommittee and staff are to return to the full City Council at a community meeting to report on the progress of discussions and make recommendations for a proposed short-term Working Agreement, setting forth such guiding principles, action items and discussion points, for the City Council’s consideration. At such time, the City Council may also consider a process for further time extensions of any approved Working Agreement.
If at any time there is an inability to arrive at mutually agreeable guiding principles or action items or a failure of SPR to comply with the terms of any approved Working Agreement, the Oil Drilling Subcommittee is to bring the matter forward to the full City Council to consider whether a further extension of such Working Agreement is warranted or whether to instead withdraw from discussions and proceed with the City’s current Specific Plan process, including the release of the Draft EIR.
These discussions with SPR shall proceed on a dual track with the existing IOF Specific Plan process, in order to ensure that the Draft Specific Plan and related Draft EIR will be ready for release in the event either party withdraws from discussions.