Loading...
HomeMy WebLinkAboutAngus Petroleum Corporation Litigation Settlement - Zone Cha Za C OFFICERS Richard Cook BOYS &GIRLS CLUBS President OF HUNTINGTON VALLEY Robert Hoxsie 1st Vice-President John Maruska P.O.Box 2047 Vice-President Huntington Beach Mel Samick Califomia 92647-2047 Vice-President (714)841-7804 Alex A.Accetta May 22,"1995 FAX(714)841-7972 Treasurer Daniel"Skip"Marshall Secretary Chris Schneider Executive Director Mayor and Honorable City Council City of Huntington Beach DIRECTORS 2000 Main Street Karen Broxson Huntington Beach, CA 92648 David Garofalo Clay James JanetLacy Sarah Lazarus Subject: Assignment of Royalties, Springfield Property Trust Ray Mendoza Jake Mutchler Michael Roberts Don Stanton Hank Todd Dear Mayor and City Council, Karl Van Holt On March 16, 1995, we submitted the attached letter to you. ADVISORY MEMBERS However, we inadvertently omitted the enclosures that support the Ed Arnold intent of the Springfield Property Trust that one-third of the balance Al Chiantaretto Mayor of the Trust is to be distributed to the City of Huntington Beach for John Collins Councilmember parks and recreation purposes within one mile of the Springfield Laurann Cook •Paul Cook Drill Site. •Roberta DeFraga Dick Gregg Ed Holland Attached is the complete submittal including support documentation. Chief Ron E.Lowenberg P g PP •Don MacAllister Thank you for your patience. Dennis G.McGahey Mayor Linda Moulton-Patterson •Wayne Osborne •Councilmember Sincerely, James Petrikin,D.C. Craig Rice Kim Richards Marge Schneider •Councilmemberr..— George B.Scott Councilmember Jim Silva Paul E. Cook •Hal Smith Burton Willis,M.D. J.David Winscott •Past President BRANCH DIRECTORS Richard Cummer,H.B. Lisabeth Grimm,F.V. C MEMBER Boys 8 Girls Clubs of America Chamber of Commerce,Fountain Valley Chamber of Commerce,Huntington Beach -C r>M "The PostTIVE PLACE For VMS' A United Way Agency WDERAL I.D.#95-619246 OFFICERS Richard Cook BOYS&GIRLS CLUBS President "Robed Hozsie OF HUNTINGTON VALLEY 1st Vice-President March 16, 1995 John Maruska P.O.Box 2047 Vice-President Huntington Beach Mel Samick Mayor and Honorable CityCouncil California 92647-2047 Vice-President y Alex A.Accetta City of Huntington Beach FAX 714)8 1- Treasurer 2000 Main Street FAX(714)841-7972 Daniel"Skip"Marshall Huntington Beach, CA 92648 Secretary Chris Schneider Executive Director Subject: Assignment of Royalties, Springfield Property Trust DIRECTORS Dear Mayor and City Council, Karen Broxson David Garofalo Clay James In 1986, the City Council approved Zone Change No. 86-4 and Special Use JanetLacy Pcrmit No. 86-7 allowing Angus Petroleum Corporation to establish the Sarah Lazarus Ray Mendoza Springfield Avenue Drill Site at Springfield Avenue and Delaware Street. Jake Mutchler At that time, Angus Petroleum Corporation established a $1 million trust Michael Roberts Don Stanton fund to compensate owners of property located within 100 feet of the drill Hank Todd site tin-claims of loss of property value during the drilling period. Karl Van Holt '['he features of the "Springfield Property Trust" included payment of the ADVISORY MEMBERSbalance of the Trust after the drilling period on an equal 1/3 basis to: Ed Arnold Al Chiantaretto (a) Owners or properties located within 100 feet of the drill site; Mayor John Collins Councilmem (I)) the City of Huntington Beach for parks and recreation purposes within Laurann cook one mile of the Springfield Drill Site; and •Paul Cook •Roberta DeFraga Dick Gregg (c) Angus Petroleum Corporation. Ed Holland Chief Ron E.Lowenberg•Don MacAllister At that time, e only eve [ [the undeveloped )ark site within one mile of the drill site Dennis G.McGahey was McCallen Park located south of Yorktown Avenue between Delaware Mayor and Huntington Streets. After considerable discussion by the City Council, Linda Moulton-Patterson •Wayne Osborne it was understood at the time that McCallen Park would be the beneficiary of •Councilmember this 1/3 portion of the Springfield Trust. Enclosed is a Summary of the Springfield James Petrikin,D.C.Craig Rice Property Trust. The proposed benefit for park development is described under Kim Richards Other Benefits. Marge Schneider •Councilmember George B.Scott In the meantime, the City leased McCailcn Park to the Boys and Girls Clubs of c Jim Silva Huntington Valley for a period of. 50 years and we developed a new $1.5 million Jim Silva •Hal Smith youth facility to help with the education and recreation of boys and girls ages 6 to Burton Willis.M.D. 17. According to our lease agreement, the Boys and Girls Club is responsible and J.David Winscott •Past President liable for the entire park, including insurance, maintenance and landscaping. However, the park is used by the entire neighborhood during Club howl as well as hours when the Club is closed. This park is truly a benefit to the community. BRANCH DIRECTORS Richard Cummer,H.B. Lisabeth Grimm,F.V. MEMBER Boys&Girls Clubs of America Chamber of Commerce,Fountain Valley Chamber of Commerce,Huntington Beach "The POSITIVE PLACE For KIDS" A United Way Agency FEDERAL I.D.#95-619246 Mayor and I-10norable City Council March 16, 1995 Page 2 The new building replaced our leased facility at Bushard School which was being sold by the Foun(aim Valley School Uislricl. Cash and pledges of$850,000 were raised by a committee of community leaders who worked to make this dream a reality and a $650,000 loan was taken out to complete the building. On September 8, 1991 the new Club opened on the site of McCallen Park. The new Club offers daily programs in youth recreation, after school care, computer/tutoring services, teen activities, drug prevention and sports, and most important, provides a place to go for our I luntington Beach youlh. In addition, the Club offers an imporlant alternative fur latchkey children. They now have a place to learn, to play, and be with friends away from the stree(s. The City has received a letter dated March 16, 1994 front I)G&F Resources Company, the parent company to Angus Petroleum Corporation, which transmitted an Assignment of Conveyance of. Production Payments from the Springfield '1•rust. This Assignment effectively assigns one-half of an existing Production Payment of$75t1,000 to the City ol' I luntington Beach and one-half to Angus Petroleum Corporation. The letter stales that this Production Payment is now payable. We are herein requesting the City Council to now honor the intent of the 1986 Springfield Property Trust by assigning the$375,000 you will receive from the trust direc(ly Ab I luntington Nalional Bank li)r the sole purpose of reducing the balance of approximately $582,000 clue on the loan which was used to cumplele (lie Boys and Girls Club facility. We would be pleased to meet with you and city staff members to answer questions and discuss the proceedings of'1986. Most of the undersigned were direc(ly involved in the negotiations and City Council considerations which led to the Springfield Properly Trust. Sincerely, 4i(chard Cook.-T csidenl lion MacAllisler, 198 'it y C'ouncilinan J v c�1ti Carmiclae ngus Petroleum fill I'hontas, 19 6 City Councilman ;Pat vis, Angus Petrol r Paul Cook, 1986 Boys Club Board Member e Sheldon , 1, r erly Angus Petroleum � one °� pond:fio%r es'�A��IShIM� AI.3 f •" 'T`'��r<i +rvS)- ,�`ar�d• 't 1 r. Honorable Mav_ or and City Council Members of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 R_: Springfield Property Trust Dear Mayor and Members of the City Council : ANGUS Petroleum Corporation ( "ANGUS" ) is prepared to establish a One Million Dollar trust for the benefit of owners of property located within one hundred feet of t ,p Springfield Avenue Drill Site as shown on page =our of the attached summary of the Springfield Property Trus_ ( the "Trust" ) . At your request we have prepared the enclosed su-n-nary and will deliver a copy of this letter to each affected homeowner . As set forth in the summary, the features _he trust include: i . Pavment by the Trust of up to One Million Dollars ($1 , 000 , 000 . 00) for claims of loss of property value during the drilling period f March ? , _vR , ..o February 28 , 1990 , for properties 1_cated within -)ne hund.red zee_ of the Springfield Drily S_ _e . 2 . PaYme:l= cv _he rust o the ra l3nce _ f �e CGr;e Million Dollars after the drilling period on an equal 3ne third basis to : ( a) Owners of properties located within one hundred feet of the Drill Site Honorable Mayor and City Council Members of the City of Huntington Beach Page 2 (b) The City of Huntington Beach for parks and recreation purposes within o.ne mile of the Springfield Drill Site; and (c) Angus Petroleum Corporation. 3 . Administration of and distribution -from the Trust to be by an independent third-parry trustee to the maximum extent possible. 4 . Payment by the Trust of all appraisal and other costs associated with the compensation program. As an example of our commitment to the City of Huntington Beach and our neighbors , ANGUS is prepared to establish the Trust as soon as the Springfield Oil Recovery Project is approved by the City of Huntington Beach . Upon approval we will immediately work with the City of Huntington Beach to prepare the necessary documentation -to create the- Trust . We look forward to working with you and our neiahbors to establish and operate the Springfield Property Trust . Very truly .your s , John Carmichael Vice President Enclosure 0883B SPRINGFIELD PROPERTY TRUST SUMMARY ANGUS PETROLEUM CORPORATION WILL ESTABLISH AN IRREVOCABLE TRUST - TO . PROVIDE VALUE PROTECTION FOR CERTAIN PROPERTIES ADJACENT TO THE PROJECT DRILLSITE , SEE MAP) ADJACENT OWNERS SELLING THEIR PROPERTIES DURING . DRILLING ACTIVITIES WHO EXPERIENCE A RELATIVE DECLINE IN . PROPERTY VALUE' WILL' BE COMPENSATED BY THE TRUST . ANGUS WILL ESTABLISH THE TRUST UPON CITY COUNCIL APPROVAL OF THE PROJECT , AND SHORTLY THEREAFTER WILL. CONTRIBUTE TO THE TRUST : $250,000 CASH 3750,000 CEDiCATION OF .`'iPiiiNGFIEL D PROJECT REVENUES . ANGUS W.__ APPO I N7 A TRUSTEE T: OPERATE , -ADMINISTER , AND CARRY CUT THE PURPOSES OF THE TRUST . THREE YEARS AFTER, THE START OF DRILLING ' ACTIVITIES, THE TRUST WILL TER M: HATE AND ITS REMAINING ASSETS DISTRIBUTED: - ONE THIRD TO ADJACENT PROPERTY OWNERS . - ONE THIRD TO PARKS & RECREATION (EG . MCCALLEN PARK) . - ONE THIRD TO ANGUS . IN ADDITION TO THE TAX REVENUES , STREET IMPROVEMENTS, AND OTHER BENEFITS THE PROJECT CONTRIBUTES TO THE SURROUNDING NEIGHBORHOOD AND TO THE CITY , THE TRUST WILL ALSO PROVIDE : - VALUE PROTECTION TO OWNERS NEEDING TO SELL . - PARTICIPATION TO OWNERS NOT NEEDING TO SELL. - RECREATIONAL BENEFITS TO ALL NEIGHBORHOOD RESIDENTS . SPRINGFIELD PROPERTY TRUST SUMMARY This is a summary of the key provisions of the Springfield Property Trust. It hRs been prepared to help persons owning property within the trust area to understand the benefits provided by the Trust and how those benefits work. BACKGROUND During the time the Springfield Oil Recovery project was under consideration, members of the Huntington Beach City Council generally agreed with information provided by local realtors and other real estate experts that completion of the proposed project would generally enhance property values in the neigbborllood. Several members of the Council continued to be concerned that if owners directly across from the drillsite had to sell their property during the drilling phase they might not be able to get a full and fair price, Primarily to address that concern, and secondarily to provide a sharing in the benefits of the project, the concept of the Springfield Property Trust was developed. The Huntington Beach City Council placed the formation of this Trust as Condition No. 66 of the Use Permit for the Springfield project. The Trust has now been formed by ANGUS Petroleum Corporation in accordance with the Condition. The primary beneficiaries of the Trust are the current owners of the thirty two "protected properties" within 100 feet of the project drillsite. Other beneficiaries include the City of Huntington Beach and certain future owners of protected property. LOSS I3ENEFTT The loss benefit is a cash payment to owners who incur a "loss" in selling their protected property during the drilling phase of the Springfield project. The loss amount is based on the difference between the actual selling price of their property versus an estimate of what that price would have been without any nearby drilling operations. The estimate is initially set by professional appraisal of each protected property. ' This "initial value" is determined before drilling starts so that it represents a price unaffected by drilling. Periodically thereafter, it is adjusted by an Orange County real estate index so that it also reflects current market conditions. A selling price less than the price estimate, with few exceptions, will trigger a loss benefit under the Trust. This not only covers property that declines in price, it also covers property that does not go up in price as fast as the rest of the market. This is an important feature that provides meaningful price protections, even in a rising real estate market. r IDiSTRIBUTION 13ENEFIT When the drilling phase of the Springfield project comes to an end, the loss benefit stops and the distribution benefit starts. The distribution benefit is a cash payment to certain owners of "beneficial property" -- protected property on which no loss benefit was previously paid. 'In the aggregate, the distribution amount to the owners Is determined as one third of the then-remaining assets of the Trust. This aggregate amount is then split up evenly among the beneficial properties and paid to their owners of record as of the last day of the drilling phase. Based on remaining assets of $1 million, 32 properties would share in $1/3 million --M over $10,000 each, Of course, if there are any loss payments, remaining assets would obviously be less than $1 million. Not obvious, however, Is that less remaining assets does not necessarily reduce the $10,000 distribution amount. For example, if two pproperties were sold at a loss of $20,000 each, remaining assets would be reduced to $960t000. In this case, the other 30 properties would then share In $320,000 - - a distribution amount still more than $10,000. In fact, so long as each loss on average Is less than $30,000, the distribution amount should be at least $10,000. OTHER BENEFIT$ When distribution benefits are paid to owners of beneficial property, a similar distribution will be made to the City of Huntington Beach, The distribution will be earmarked for park development near the project site, and should provide recreational benefits to a larger number of area residents. This amount is also based on one third of the remaining assets of the Trust, Although the minimum amount is less certain than that to owners of beneficial property, all Indications support an amount of at least $250,000. This should be more than adequate to make substantial park Improvements. ADMINISTRATION Trust Services of America, Ino., a subsidiary of Ca1Fed, Inc. has been retained as the Trustee of the Springfield Property Trust. As Trustee, TSA will be responsible for holding Trust assets and making disbursements from the Trust for losses, distributions and other expenses of the Trust. As Trustor, ANGUS will retain certain responsibilities In directing the administration of the Trust. LIMITATIONS The loss benefit of the Trust is applicable only during the period when drilling Is underway. The distribution benefit of the Trust is applicable only when drilling has been completed. Trust payments for losses, distributions, and all other expenses will not exceed $1 million In total. This summary is subject to all other terms and conditions contained In the Springfield Property Trust document. - 2 - r ,*!�.r tom• ;N i+� -)i� PUE Resources Company ntSK,+R; W 1 March 16, 1994 City of Huntington Beach, California -„ _..._.. . . . 2000 Main Street Huntington Beach, California Attn: Michael T. Uberuaga City Adm!Wstrator RE: Assignment of Conveyance of Production Payment Royalty Interests Springfield Unit/Block 1804 Vista Del Mar Tract Section 5 City of Huntington Beach Orange County, California Gentlemen: Attached for execution by the City are 3 copies of the captioned Assignment. This Assignment effectively assigns an existing Production Payment 1/2 to the City of Huntington Beach and 1/2 to Angus Petroleum Corporation, Please execute all 3 copies and return 2, T11is Production Payment was established, pursuant to Special Use Permit 86-7, as part of a Trust Account to con "across the street" neighbors for losses which were incurred during the drilling phase of the Springfield Unit project, The neighbors were paid and the Trust terminated, The Trustee has executed the attached Assignment. This Production . Payment of$750,000 payable out of the production from the Springfield Unit is now payable 1/2 to the City and 1/2 to Angus, For reference purposed, a copy of the Trust Agreement of 1/8/88 is also attached, If you have an questions, please call me at (214) 750-3864. Very t ly urs, G e . Anderson O s ore Land Manager GWA:sr cc., John Carmichael/Iuntington Beach Office A PCFE Aterprfses Company ?r F l. Council/Agency Meeting Held: Deferred/Continued to: ,8 ❑Approved fAConditionally Approved ❑ Denied VCity Clerk's Signat re Council Meeting Date: 08/21/95 Department ID Number: CS 95-035 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, City Administrator. PREPARED BY: RON HAGAN Director Community Services p SUBJECT: SPRINGFIELD PROPERTY TRUST Statement of Issue,Funding Source,Recommended Action,Alternative Action,Analysis,Environment I Status,Attachments Y:J/���X�� ��L,/Zti4'T2rr�'�E�CL.-L�iYI'LllY4��"� L��-�a.= • L2.4 �YL21z.�t�tk rz.^w,vrvi�e-�.�ti.Ew-,mow-yu+ '�.+ l;l''1'^�4.C...-C-.LvcA.`' 1 � ' +"� Statement of Issue: As part of the Springfield Property Trust, the Angus Oil Company i'ei, , designated funds to be used for recreation and park purposes. City Council now needs to determine where these funds are to be deposited. Funding Source: Angus whipstocking operation as per the Springfield Property Trust. Recommended Action: Direct staff to accept the proceeds per the Springfield Property Trust for recreation and park purposes; and deposit these funds into the Park Acquisition and Development Fund . Alternative Action(s): Determine an alternative, such as the Boys and Girls Clubs, to be the recipient of this revenue. Analysis: The Angus Petroleum Corporation entered into the Springfield Property Trust in October, 1986, to provide an oil whipstocking operation. On October 20, 1986, City Council conducted a public hearing and approved the Use Permit to develop a consolidated drill site and oil operation bordered by Delaware Street, Huntington Street, Toronto Avenue and Rochester Avenue. Condition No. 56 of the Use Permit refers generally to the million dollar trust: "The property value protection plan submitted by the applicant shall be implemented as outlined prior to drilling," but there is no wording in the condition that specifically allocates money for a park. Mr. Carmichael, Angus Vice President, indicated in his October 17, 1986, letter, to City Council: Payment by the Trust of the balance of the $1 million after the drilling period on an equal one-third basis to (A) Owners of property located within one hun- REQUEST FOR COUNCIL ACTION MEETING DATE: 08/21/95 DEPARTMENT ID NUMBER: CS 95-035 dred feet of the drilling site, (B) THE CITY OF HUNTINGTON BEACH FOR PARKS AND RECREATION PURPOSES WITHIN ONE MILE OF THE SPRING- FIELD DRILL SITE, and (C) Angus Petroleum Corporation. [Emphasis added] The Springfield Property Trust summary, which was an attachment to Mr. Carmichael's letter, indicates: three years after the start of the drilling activities, the Trust will terminate and its remaining assets distributed: *One-third to adjacent property owners *ONE-THIRD TO PARKS AND RECREATION (e.g. MC CALLEN PARK) *One-third to Angus Petroleum Corporation. [Emphasis added] There are several parks within a one mile radius of the Springfield drilling site including McCallen, Manning, Lake, and Worthy Community. The October 16, 1986, summary does indicate as an example, " one-third to parks and recreation (e.g. McCallen Park)." The reference is made to the funds going to McCallen Park, but staff can find no indication where it is specifically spelled out or that there is a Council action indicating McCallen Park is to be the recipient. At the time that the Springfield Property Trust agreement was being initiated, McCallen Park had not been completed. This park was more expensive to construct than traditional neigh- borhood parks. The average park, at the time, was costing from $70,000 to $80,000 per acre; McCallen Park ultimately cost in excess of $800,000 or approximately $160,000 per acre. There were several reasons for this increased cost including reabandonment of oil wells, landscaping around the Boys and Girls Clubs building and parking lot, excavation and recompaction of the building site for the foundation of the Boys and Girls Clubs, and stub- bing in utilities for the building. Also, a larger playground than would normally be con- structed for a neighborhood park was designed and constructed because the Boys and Girls Clubs facility was going to be developed on the site. Although there is no specific indication that the city would in any way be reimbursed by the Boys and Girls Clubs or the Springfield Property Trust, it is reasonable to reimburse the Park Acquisition and Development Fund for some of these additional costs by placing the proposed revenue designated for " park and recreation" purposes from the Springfield Property Trust. Environmental Status: Not applicable. Attachment(s): City Clerk's 1. Connie Brockway's July 7, 1995 memo with attachment relative to the Page Number Springfield Property Trust. 2. Robert Franz May 19, 1995 memo. 3. Site map 0013752.01 -2- 08/09/95 2:39 PM CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICA TION TO: Michael T. Uberuaga, City Administrator FROM: Robert J. Franz, Deputy City Administrator SUBJECT: PROCEEDS FROM SPRINGFIELD PROPERTY TRUST DATE: May 19, 1995 We have reviewed the City Clerk's records, which include the "Springfield Property Trust, Agreement. All references to the City in the agreement are in general terms. We have been unable to find any requirement that proceeds to the City from the trust are to-be used for parks and recreation purposes. There is no reference to how the proceeds are to be used by the City. With regard to the letter-to the City Council from the Boys and Girls Club, attached are the documents that were attached to the letter. Those documents indicate there were communications about using the proceeds for parks and recreation purposes. The conditions on the project and the Trust Agreement did not, however, restrict the use of the proceeds. XNGUS.DOC/g/bob/word 05/19/95 2:54 PM c -- I JOHN D. CARMICHAEL, PE, REA 4581 Elder Ave. Seal Beach, CA 90740-3048 310-594-0238 FAX-310-594-8388 I July 14, 1995 City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Subject: Disposition of the Springfield Trust To Whom It May Concern: During the early days of the permitting process of the Springfield Project, a meeting was held with each of the City Council Members. One of the concerns of the Council was what could be done to protect the home owners who might have to sell their properties during the drilling process, which was the most disruptive period of the development. ANGUS Petroleum Corporation proposed to form a trust that would compensate a home owner for any loss of value to their home should they be forced to sell during the drilling phase of the Project. To this end, a proposal was made, and accepted as a condition to the Use Permit, to form a trust in the amount of$1,000,000. This money would be used to protect the 33 homeowners directly across the street from the Drill Site. At the end of the drilling phase of the project, any money left in the trust would be returned to the Protected Home Owners, ANGUS and the City of Huntington Beach in equal proportions. ` That portion of the Trust to be returned to the City of Huntington Beach was to be used for improvements to a park in the neighborhood of the Project. It has always been understood by ANGUS that the money returned to the City would be used for MacAllen Park. I was present at all of the meetings with the City Council Members in 1986 and when the proposal was presented to then Mayor Bob Mandick. I was then Vice President for California Operations for ANGUS Petroleum Corporation. Sincerely, John D. Carmichael File: TRUSTPRY.DOC 06-& `' �� from the desk of: KATE WHITNEY Deputy City Clerk City of Huntington Beach P.O. Box 190 Huntington Beach, CA 92648 (714) 536-5210 Number of registered voters in HB for Governor primary for 1994 53148 Republicans 34020 Democrats 87168 Number of actual votes for primary 20026 Republican 11371 Democrats 31397 Number of HB registered voters for General Election Nov 1994 103363 Registered 68139 Voted C 'ERS d cook 130YS&GIRLS CLUBS Ir. .jent OF HUNTINC3TON VAII.EY •Robert Hoxsle March 16 1995 tst Vice-President John Maruska P.O.Box 2047 Vice•President Huntington Beach Yee Pam ck Mayor and Honorable City Council Califomia 92647-2047 City of Huntington BeachFAX(714)841- Alex A.Accelta 7972 Treasurer 2000 Main Street Daniel"Skip"Marshall Huntington Beach, CA 92648 Secretary Chris Schneider Subject: Assignment of Royalties Springfield Property Trust Executive Director � DIRECTORS Dear Mayor and City Council, Karen Broxson David Garofalo Clay James in 1986, the City Council approved Zone Change No. 86-4 and Special Use Janet Lary Permit No. 86-7 allowing Angus Petroleum Corporation to establish the Sarah Lazarus Springfield Avenue Drill Site at Springfield Avenue and Delaware Street. Jake Mutchler At that time,Angus Petroleum Corporation established a $1 million trust Michael Roberts fund to compensate owners of property located within 100 feet of the drill Don Stanton Hank Todd site for claims of loss of property value during the drilling period. Kart Van Holt Tile features of the"Springfield Property Trust' included payment of the ADVISORY MEMBERSbalance of the Trust after the drilling period on an equal 1/3 basis to: Ed Arnold Chiantaretto (a) Owners of properties located within 100 feet of the drill site; or n lmeCollm Coundimember (b) the City of Huntington Beach for parks and rccreation purposes within Laurann Cook one mile of the Springfield Drill Site;and ' •Paul Cook •Roberta DeFraga Dick Gregg (c)Angus Petroleum Corporation. Ed Holland Chief Ron Lowenberg MacAllister At that time the onlyundeveloped ark site within one mile of the drill site •DennisDon G.McGahey was McCallcn Park located sou h of Yorktown Avenue between Delaware Mayor and Huntington Streets. After considerable discussion by the City Council, Linda Moullon•Patter son •Wayne Osborne it was understood at the time that McCallcn Park would be the beneficiary of •Coundimember this 1/3 portion of the Springfield Trust. Enclosed is a Summary or the Springfield James Rice PeVikin,D.C. Craig R Property Trust. The proposed benefit for park development is described under Kim Richards Other Benefits. Marge Schneider •Coundimember George B.Scort in file nicantlnie, the City leased McCallen Park to the Boys and Girls Clubs of Coundimember Huntington Valle for period of 50 cars and we developed a new $1.5 million Jim Silva b Y F Y F •Hal Smith youth facility to help witli the education and recreation of boys and girls ages 6 to Burton Willis,M.D. 17. According o our ease ag t l reemcnt the Boys and Girls Club is res onsible and Wi J.David nscon •Past President liable for the entire park, including insurance, mainlenanec and landscaping;. I lowever, the park is used by the entire neighborhood during Club hours as well as hours when the Club is closed. 'Phis park is truly a benefit to the community. QRANCII DIRECTORS Richard Cummer,H.B. Lisabeth Grimm,F.V. MEMBER -toys S Girls Clubs of America ;hamber of Commerce,Fountain Valley Chamber of Commerce,Huntington Beach "The POSITIVC PLACE- For KiDS" A United Way Agency FEDERAL I.D.#95-61! r Mayor and I40norable City Council March 16, 1995 Page 2 The new building replaced our leased facility at Busliard School which was being sold by Ilse Fountain Valley School District Cash and pledges of$850,000 were raised by a committee of community lemicts who worked to make Ibis dream a reality and a$650,000 loan was taken out to complele the building. On Seplciliber 8, 1991 the new Club opened on (lie site of McCallen Park. The new Club oflcrs daily programs in youth rccrealion,after school care,computer/tutoring services, teen activities, drug prevcnlion and sports, and most importanl, provides a place to go for our I luntington Beach youth. In addition, the Club offers an important alternative for latchkey children. They now have a place to learn, to play, and he Willi friends away from (lie slrce(s. The City has received a letter dated March 16, 1994 from 1'G&E- Resources Company, the parent company to Angus Petroleum Corporation,which Iransmitted an Assignment of Conveyance of Production Payments from the Springfield Trust. 'Phis Assignment effectively amigns one-half of an existing Production Payment of$750,000 to (he City of I luntinglon Beach and one-half to Angus Petroleum Corporation. The letter stales (hat this Production Payment is now payable. We are licrein requesting the City Council (o now lionor the intent of the 1986 Springfield Property Trust by assigning the$375,000 you will receive from the trust directly' Ab t luntington National Bank for the sole purpose of reducing the balance of approximatcly $582,000 clue on the loan which was used to complelc the Boys and Girls Club facility. We NvDull be pleased to meet Willi you and city stall'members to answer(questions and discuss the proccedings of 1986. Most of the undeisigncd were directly involved in the negotiations and City Council considerations which led to the Springfield Property'Trust. Sincerely, Richard Cook, L' esidenl Don lac:Allister, 198 'ity Councilman 1 of Zakimichael, ngus Petroleum fin I'hrnnas, 1.9 G City Councilman Pat vis, Angus Petrol t Paul Cook, 1986 Boys Club Board Member C. •e Sheldon , F r erly Angus Petroleum j7- -95 02 : 29PM FROM III TO CITY CLERK POl JA MES W. SIL,VA 044 SUPERVISOR. SECOND DISTRICT ORANGE COUNTY HALL OF ADM!NiSTRAT!ON 10 CIbIC CENTER PLAZA. P O BOY, 087, SANTA ANA, CALIFOW41A 92702.0687 C PHGNE (714) 834•3920 Fix <?laT 6t4 0109 June 29, 1995 r The Honorable Dave Garofalo c Council Member =`; MM City of Huntington Beach `'`' ``-'m 2000 Main Street - TV Huntington Beach, CA 92648 r. r LCJ T j Lrl Dear Dave: II I write regarding a recent allocation of$375,000 from the Springfield Property Trust. According to a 1986 agreement, one third of trust payments are to go toward park purposes within one mile of the Springfield drill site. As you know, the Boys and Girls Club of Huntington Valley leases the one park in the area, McCallen Park. The club is responsible for the maintenance and landscaping of the park. I request that you and your council colleagues consider assigning the aforementioned payment to the Boys and Girls Club to assist in the retirement of their construction loan. In doing so, you would be fulfilling the intent of the 1986 agreement while helping a vital community organization. Thank you for your consideration of this action. Please contact me if you would like to discuss this matter. Sincerely, James W. Silva Supervisor, Second District JWS:RS U JUL. 4 1995 f A 7 v CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: Honorable Mayor and Councilmembers j FROM: Connie Brockway, City Clerk k C RE: 10/20/86 ANGUS PETROLEUM PUBLIC HEARING-ZONE CHANGE 86-4 - USE PERMIT 86-7 -FINDINGS AND AMENDED CONDITIONS �Y DATE: July 7, 1995 Attached are copies of the 10-20-86 City Council Minutes regarding the public hearing on appeal Zone Change 86-4,Use Permit 86-7,EIR 86-1. The City Council motion on page No. 5 (highlighted)includes adoptions of findings and conditions including amended Condition No. 56(Trust Fund) and a letter from Angus received 10/17/86. Page No. 13 - City Council Minutes sets forth Condition No. 56 (property value protection plan). I have attached the letter from Angus received 10/17/86 and the accompanying Springfield Property Trust Summary wherein the first paragraph refers to value protection and the remainder of the document describes the trust. The documents I have attached are obtained from the official zone change records on file in the City Clerk's Office. Please inform me should you have any questions. c cc: City Administrator City Attorney Community Development Department gA95cbmem\95-079 Page 4 - Council Minutes - 10/20/86 AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: None ABSENT: None JOINT SPECIAL MEETING SCHEDULED 10/27/86 - COUNCIL/REDEVELOPMENT AGENCY A motion was made by Bailey, seconded by Thomas, to hold a joint Special Meet- ing October 27, 1966 to consider all the Redevelopment Agency items scheduled to be heard October 20, 1986. The motion carried unanimously. PUBLIC HEARING - PLANNING COMMISSION OVERRULED - ZONE CHANGE 86-4 - APPROVED - USE PERMIT 6-7 - APPROVED WITH FINDINGS AND AMENDED CONDITIONS - EIR 86-1 CERTIFIED - ANGUS PETROLEUM CORP The Mayor announced that this was the day and hour set for a public hearing continued open from October 13, 1986 to consider an appeal filed by Councilman John Thomas to the Planning Commission's denial of Zone Change 86-4, Use Per- mit 86-7. Zone Change 86-4 proposes a change of zone from "Oldtown Specific Plan - Dis- trict 2-0" to "Oldtown Specific Plan - District 2-Ol.". Use Permit 86-7 - to develop a consolidated drillsite and oil operation. The subject location is two blocks bounded by Delaware Street to the east, Huntington Street to the west, Toronto Avenue to the north and Rochester Avenue to the south. The Mayor stated that Environmental Impact Report 86-1, assessing the environmen- tal effects of said proposal would also be considered by the City Council. The City Clerk announced that an informal petition had been submitted listing approximately 402 signatures in opposition and that communications in opposi- tion had been submitted by James E. Walton. Staff reports were presented by the City Administrator; the Director of Devel- opment Services, Scott Hess, Assistant Planner; Pam Posten, Assistant Planner; Jim Crisp, Vice-President of BCL regarding environmental concerns; and Fire Chief Picard. Planning Commissioner Porter informed to Council as to the rea- sons why the Planning Commission denied Zone Change 86-4 and denied Use Permit 86-7. Discussion was held between Mayor Mandic and staff regarding Phase 1 and Phase 2 of the project; and the noise equivalent. Discussion was held regarding the time to be allowed for public testimony. Spencer Sheldon, Kevin Williams, B. G. Williams, Edd Schofield, Nick McLachlan, John Rohrig, Ted Ehring, George Grundt, Kathy Walker, Larry Washa, Mel Frost, Dr. Ed Helton, Craig Webb, Mickey Shafer, Steven Berg-Hansen, Martha Brock, John Van Haulen, Tom Van Tuyl and Kirk Kirkland spoke in support of the project. Stan Lawrence, Robert Richardson, Dean Albright, Sharon Sarkis, Rachael Kaloian, Jason Rosen, Paula Rosen, Michael Craig, Dolores Walton, Lynn Moseman, G. T. Lee, Nancy Hartmann presented certified copy of CC&R's, Peter Fassnacht, Steven Ganetos, Lucille Battu, Michael Kaloian, George Corry, Mark Conley, Dirk Hartmann spoke in opposition to the project. Page 5 - Council Minu, - 10/20/86 Discussion was held regarding whether to close the public hearing and continue with the rest of the agenda. A motion was made by Kelly, seconded by Bailey, to close the public hearing and to continue discussion of the matter at the present time. The motion car- ried by the following roll call vote: AYES: Kelly, MacAllister, Finley, Bailey, Thomas NOES: Mandic, Green ABSENT: None The City Clerk presented Ordinance No. 2876 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ORDI- NANCE CODE BY AMENDING SECTION 9061 TO PROVIDE FOR CHANGE OF ZONING FROM OLD- TOWN SPECIFIC PLAN (DISTRICT TWO) WITH OIL SUFFIX TO OLDTOWN SPECIFIC PLAN (DISTRICT TWO) WITH OIL SUFFIX FOR DRILLING PURPOSES ON REAL PROPERTY GENER- ALLY LOCATED BETWEEN DELAWARE STREET TO THE EAST, ROCHESTER AVENUE TO THE SOUTH, CALIFORNIA STREET TO THE WEST, AND SPRINGFIELD AVENUE TO THE NORTH." (ZONE CHANGE #86-4)". The City Attorney stated that CC&R's were only enforceable between the private parties who own the property. She stated there was no conflict of interest to disallow Councilman Thomas from voting on the issue. She referred to a letter from Angus Petroleum stating that there was no existing contract between Angus Petroleum and Councilman Thomas. A motion was made by Bailey, seconded by Finley, to uphold the decision of the Planning Commission and approve Environmental Impact Report 86-1, and deny Zone Change 86-4 with findings set forth in the October 13, 1986 RCA and to 1 c:eny Use Permit 86-7 with revised findings as set forth in the October 13, 1986 RCA. Following discussion, the motion failed by the following roll call vote: j AYES: Finlf.y, Mandic, Bailey NOES: Kelly, MacAllister, Green, Thomas ABSENT: None A motion was made by Green, seconded by Kelly, to certify Environmental Impact Report 86-1 as adequate and in conformance with California Environmental Impact Report Guidelines and to overrule the Planning Commission decision and approve Zone Change 86-4 and Use Permit 86-7 with findings and conditions as amended to include optional Condition No. 55 pertaining to a five member review committee to monitor and inspect the project; Condition No. 56 pertain- ing to the one million dollar trust fund that Angus Petroleum Corporation is prepared to establish per the letter from Angus received October 17, 1986; Condition No. 57 pertaining to video camera scanning the drill site that can be viewed by 24-hour security personnel at the tank farm site; and amending Condition No. 13 to change the words to read ' .. .50 dBA. . .", and to approve introduction of Ordinance No. 2876, after reading by title; the findings and conditions are as follows: Findings for Approval - Zone Change No. 86-4: 1. A change 3f zone from "Oldtown. Specific Plan, District Two-O" (Oil Opera- tions excluding Oil Drilling) to "Oldtown Specific Plan, District Two-01" (Oil Operitions including Oil Drilling) will be compatible with surround- . r r 'Page 6 - Council Minute - 10/20/86 ing residential uses based on the mitigation measures described . in the environmental impact report and conditions of approval outlined in the use permit. 2. The proposed zone change is consistent with the goals and policies of the General Plan. Unitization and consolidation of existing oil operations is encouraged because it reduces the land area used for oil facilities. Approximately 5.3 acres of developable land will become available after the consolidation on the two blocks (3.1 acres). 3. Compliance with Title 15 of the Huntington Beach Municipal Code and the use permit conditions of approval will ensure that the proposed use allowed by the zone change will not be detrimental to the general health, welfare, and safety of the community. Findings for Approval - Use Permit No. 86-7: 1. The establishment, maintenance and operation of the oil operation will not be detrimental to the general welfare of persons residing or working in the vicinity, property and improvements in the vicinity of such use or building based on the conditions of approval and compliance with Title 15 of the Huntington Beach Municipal Code. 2. The proposed oil operation is consistent with the goals and objectives of the General Plan. Oil activities are a consistent use in any land use category of the General Plan. 3. The project will consolidate oil operations in one location reducing the visual impact of numerous wells now spread throughout the Springfield Oil Field area. Such consolidation will also be advantageous for safety and noise reduction purposes. The project will result in the abandonment and reclamation of 34 existing wells and 16 oil storage tanks in the Spring- field Oil Field area and will not significantly increase traffic in that area. 4. The project will result in increased tax revenues for the City of Hunt- ington Beach and other governmental agencies. 5. The conditions of approval are desirable and necessary in order to effec- tuate the purposes of the Huntington Beach Municipal Code, the official General Plan Land Use Plan and the best interests of the City. Further, they include mitigation measures set forth in the final Environmental Impact Report that will assure the location is suitable for the type of use proposed and the following will not result or be reasonably anticipa- ted from the project: damage or nuisance from noise, smoke, odor, dust or vibration; hazards from explosion, contamination or fire; hazards occa- sioned by unusual volumes or character of traffic; incompatibility with surrounding development. And, the project complies with all requirements of Division 9 and other applicable provisions of the Huntington Beach Municipal Code. 6. The conditions imposed include requirements of plans for the disposition of oil wells and for oil operations on the property involved, and for berms, walls and landscaping to provide maximum feasible screening of equipment and facilities. � 14 . Page 7 - Council Minutes - 10/20/86 7. Changes have been required and incorporated in the project during the course of the public hearing and consultation process to mitigate or avoid the significant adverse environmental effects of the project; the Division of Oil and Gas enforces rules and regulations for the conduct of secondary recovery operations; the mitigation measures incorporated, pro- posed and adopted, together with application of the rules and regulations of the Division of Oil and Gas,- will effectively mitigate all of the adverse impacts identified; public agencies other than the City, includ- ing the Division of Oil and Gas, Regional Water Quality Control Board and South Coast Air Quality Management District, will be reviewing aspects of this project for mitigation measures as to matters within their responsi- bility and jurisdiction, including subsurface operation, water and air quality; the critical need for oil renders infeasible the alternatives of no project or delayed project implementation, and alternative surface locations are infeasible because of their limited availability, or the greater disruption to the community at large which would result therefrom. 8. The subject location is centrally located within the Springfield Oil Field area; relocating the proposed project to another site is infeasible. 9. No substantial public purpose would be served by denial of Use Permit No. 86-7 but rather: (a) It is important that the United States develop its existing oil reserves in order to meet its energy needs without increasing dependence on foreign oil, and this project will result in incremen- tal recovery of approximately five (5) million barrels of oil; and (b) The project will consolidate oil operations in one location, reduc- ing the visual impact of numerous wells now spread throughout the Oldtown portion of the City; and (c) Such consolidation will also be advantageous for safety and noise reduction purposes; and (d) The project will be only an interim use of the surface site involved, and at the termination of the project the site will be available for recycling into other uses; and (e) The project will benefit and accrue to the general welfare of the City and the public for each of the reasons set forth above. (f) Approval of this project will reduce the immediate demand for more off-shore drilling facilities. 10. The proposed oil consolidation project will have 24 hour on-site person- nel, and will be safer than the existing non-continuous monitoring of the 34 scattered wells to be abandoned throughout the area. This will reduce the possible attraction of younger persons. 11. The most modern, efficient energy-saving equipment available will be integrated into the design of the project which will mitigate environmen- tal impacts such as fire, noise and air pollutants. Page 8 - Council Minutes - 10/20/86 12. The applicant has submitted a property value protection plan which will be implemented as outlined prior to drilling. Conditions of Approval - Use Permit No. 86-7: 1. The site plan dated August 15, 1986, and section drawings dated August 27, 1986, shall be the conceptually approved layout. (a) This use permit shall not become effective until Zone Change No. 86-4 has been approved and in effect. 2. All structures and procedures shall conform to Title 15 of the Huntington Beach Municipal Code and the Division of Oil and Gas Standards.- 3. The applicant shall obtain all necessary electrical and building permits. 4. 'Measures to reduce erosion should be used during grading and site prepa- ration. Grading and construction activity shall take place only during daylight hours. 5. During grading and excavation, earthmoving crews should observe cuts and spoils for potential archaeological finds. In the event of a potential find being located, operations shall be suspended until the significance of the find is determined. 6. A dust control program shall be submitted to the Department of Develop- ment Services for review and approval prior to the issuance of building permits. 7. Prior to any on-site construction or drilling, the masonry wall and all landscaping and street improvements shall be installed. 8. Prior to the installation of any landscaping, a landscape and irrigation plan shall be submitted to the Department of Development Services and Public Works for review and approval. (a) All landscaping shall comply with Chapter 15.22 of the Huntington Beach Ordinance Code and all trees shall be minimum 24 inch box type I and spaced no greater than 20 feet on center. 9. Prior to the installation of the office structure, elevations shall be provided for review and approval by the Development Services department. i (a) The office shall be on a permanent foundation. (b) A mansard or pitched roof shall be provided. 10. The applicant shall enter into a franchise agreement with the City for the installation of the underground connection between the two blocks. 11. The proper sealing and abandonment of the existing scattered wells which will be replaced by this project shall take place following approval of this project and must be completed within eighteen (18) months. '4 :1� Page 9 - Council Minutes - 10/20/86 12. The surface of the site shall be completely covered with an appropriate material (such as gravel) subject to review and approval of Development Services. 13. A report prepared by an acoustical engineer shall be submitted to the Department of Development Services for review and approval prior to com- mencing drilling. Said report shall predict and project dBA sound levels at the Angus Oil Site property line and adjacent residential property line both with and without an acoustical blanket on the drilling rig and service rigs. The report shall indicate noise attenuation measures necessary to assure compliance with the Huntington Beach Noise Code and a maximum noise level at the residential property line of 50 dBA during the nighttime hours between 10:00 PM and 7:00 AM. (a) A double acoustical blanket enclosure shall be provided at man-door entrances. 14. Noise attenuation for the drilling operation, oil operation and service ! operation shall be provided pursuant to the Oil Code and noise report specified in Condition 13. (a) If a noise problem occurs, the entire drilling structure shall be wrapped with an acoustical blanket for greater noise attenuation. 15. The project shall fully comply with the Huntington Beach Noise Ordinance. f 16. No speakers, loud bells or buzzers shall be employed on site. 17. Excessive vibration, as determined by the Director of Development Ser- vices, shall be reduced to acceptable levels. 18. Light and glare shall be directed and/or screened to prevent "spillage" onto adjacent residential properties. 19. All heavy truck traffic shall be limited to the following streets between the 405 freeway and the subject site: Beach Boulevard, Adams Avenue, and Delaware Street. For entrance to the site only Springfield Avenue and California Street may be used. 20. Truck traffic shall be limited to the hours between 7:00 AM and 5:00 PM. (a) No trucks may park on the street. (b) Truck deliveries shall be staggered so that no more than two trucks shall be on the premises at any one time. 21. All employees must park on either one of the two sites both during con- struction and after. 22. Local streets affected by truck traffic shall be inspected before and after construction. Any damage to local streets by heavy trucks shall be repaired and reconstructed per City requirements at the expense of the applicant. 23. All driveways shall be radius type and constructed to Public Works stan- dards. Page 10 - Council Minutes - 10/20/86 24. There shall be no entrance or exit of vehicles from the drilling site between the hours of 10:00 PM and. 7:00 AM except for emergency purposes. 25. An overload permit should be obtained from City and State (if required) for all oversized loads to be moved on public streets. 26. Pipe string cementing through fresh water bearing sands shall be imple- mented to prevent salt water intrusion into the aquifers. 27. A system for collecting, treating, and releasing storm drainage must be provided by the applicant and approved by Public Works. 28. Excess brine must be treated and a permit obtained, to meet Orange County Sanitation District and City Fire Department standards prior to being released into the sewer system. 29. Recycling of produced zone water back to the oil reservoir shall be cert- ified by the Regional Water Quality Control Board and all its conditions and restrictions shall be adhered to. 30. Well service rigs shall be operated no more than 48 days per year between 7:00 AM and 7:00 PM or daylight hours, whichever is shorter. 31. No more than four well service rigs may be on the premises at any one time. The service rigs shall not exceed 100 feet in height and shall be double muffled and utilize acoustical blankets. 32. All drilling rigs and production wells shall be operated by electrical motors and electric pumps only. 33. The drilling rigs shall not operate for any longer than 2 years during Phase One. 34. Drilling rigs after the two year period for the remaining 16 wells (Phase Two) shall comply with the conditions herein and may not be installed after an additional two years. The second phase drilling shall be limi- ted to 7:00 AM to 10:00 PM only. I i 35. Drilling derricks shall not exceed 142 feet in height. 36. Upon completion of initial drilling of injection and producer wells, all drilling rigs shall be removed from the site. 37. Service rigs shall be erected only during maintenance operations. 38. Applicant shall install blowout prevention equipment. 39. A full vapor recovery system shall be installed. 40. Only three on-site crude oil tanks are permitted and shall never be com- pletely full at once. 41. Prior to issuance of building permits, an emergency action plan, includ- ing employee training and periodic practice, shall be developed by the applicant with consultation from the City and other regulating agencies. The plan should include how spillage onto street from site(s) would be f e Page 11 - Council Minutes - 10/20/86 handled (stockpile of sand, etc.); the safe handling of any chemicals and/or materials, and full knowledge of all systems and emergency equip- went. A copy shall be on file with the Fire Department and updated on a five year basis. 42. All oil must be transported by pipeline. 43. An on-site fire suppression system shall be installed as a primary source for fire protection. 44. Celler requirements for oil wells: (a) Must be provided with heat detection system from celler to 24 hour monitoring location. (b) Fire extinguishers approved by the Fire Department must be installed within 75 feet of travel. (c) Provide metal open grate covers over top of well cellers. 45. Storage tank requirements: (a) Must have pre-plumbed foam injection system installed on all product storage tanks. (b) Must have exterior deluge water spray system on all storage tanks. 46. Site requirements: l (a) All diked areas must have an engineered drainage system. (b) Foam storage area and foam quantity to be approved by Fire Depart- ment. i (c) Fire hydrants to be located in areas approved by Fire Department. (d) Hydrogen sulfide detection system approved by Fire Department to be installed on project perimeter. (e) Fire extinguishers approved by the Fire Department must be installed throughout the site. (f) All gate openings must be 24 feet in width and installation must comply with Fire Department Specification 403. 47. Well cellars shall be cleaned periodically to prevent waste accumulation. 48. Twenty (20) abandoned wells have been identified within the project area which do not meet present day abandonment requirements. A contingency plan shall be outlined and submitted to the Huntington Beach Fire Depart- ment for review ,.and approval with steps to be taken in the event that leakage from any of these abandoned wells finds its way to the surface. 49. Prior to termination of the oil operation, a plan shall be submitted sub- ject to review and approval of the Fire Department and 'Development Ser- vices Department, showing how the site shall be abandoned and restored to its closest natural state. Page 12 - Council Minutes - 10/20/86 50. There shall be no pipeline construction activity outside the site except between the hours of 7:00 AM and 8:00 PM, Monday through Saturday only. 51. The methodology of oil recovery for this project shall be limited to water injection only. Steam injection shall be prohibited. 52. The operator shall at all times during the term of this use permit and any renewal or extension thereof, maintain in force an insurance policy or policies insuring the operator, and as additional insureds the City of Huntington Beach, the City Council and each member thereof, and every officer and employee of the City acting in the due course of his employ- ment or in his official capacity, against liability or financial loss resulting from any suits, claims or actions brought by any person or per- sons, and from all costs and expenses of litigation brought against the insureds, in the amount of not less than $5,000,000 combined single limit for any injury to persons or damage to property, including (but not limi- ted to) injury or damage from subsidence and rebound, resulting from the operator's oil drilling and production activities and operations inciden- tal thereto. Said policies shall provide that the insurance coverage shall not be cancelled or reduced by the insurance carrier without the City having been given at least ten days prior written notice thereof by such carrier. The operator shall not cancel or reduce said insurance coverage. At all times during the term of this use permit, and any renewal or extension thereof, the operator shall maintain on file with the City Clerk a certificate or certificates of insurance issued by the carrier or carriers showing that said insurance is in effect in the amount required above, and a copy of each insurance policy. If the oper- ator does not keep said insurance in full force and effect, the City may obtain said insurance and pay the premium thereon, which shall then be j deemed a debt owned by the operator to the City. Any insurance policies procured by the operator hereunder shall provide that the insurance car- rier waives all rights of subrogation against the City. If the City obtains any policy of insurance hereunder, such policy shall include a j waiver by the insurance carrier of all rights of subrogation against the f operator. 4 53. The City Council shall review and, if necessary, may modify the condi- tions as set forth in this use permit, at the first regular City Council meeting following October 20, 1987, and at five year intervals there- after, and upon any change in ownership of the project which occurs between five-year reviews; provided that the phrase "change of ownership" as used herein shall not include any sale or other transfer to a corpora- tion, partnership or other form of business organization in which Alberta Natural Gas-United States and/or one or more of its shareholders or sub- sidiaries owns the controlling interests, or any sale or transfer so long as Angus or one of its subsidiaries retains responsibility for the opera- tion of the project. 54. The Planning Commission/City Council reserves the right to revoke this use permit if any violation of these conditions or the Huntington Beach Ordinance Code occurs. 55. A five member review committee shall be selected by the City Council com- prised of three property owners, who reside directly adjacent to the pro- ject site, one member of the Planning Commission and one City Council member. The Fire Department and Development Services Department shall 140 C 4 D Page 13 - Council Minutes - 10/20/86 jointly provide a staff liaison. The purpose of this committee shall be to monitor and inspect the project on a quarterly basis during the drill- ing phase and semi-annually thereafter. 56. The property value protection plan submitted by the applicant shall be implemented as outlined prior to drilling. 57. In the event that either one of the two blocks is to be without 24-hour supervision, a video camera shall be employed on-site to provide continu- ous surveillance which can be monitored by personnel at the other site. Findings for Approval - Environmental Impact Report 86-1: 1. The Final Environmental Impact Report was prepared in compliance with the California Environmental Quality Act and the State CEQA Guidelines. 2. The Final Environmental Impact Report is an informational document which informed the City Council and the general public of the environmental effects of the project and which was read, reviewed and considered by the City Council before making its decision on the project. 3. The Final Environmental Impact Report contains discussions of the signi- ficant environmental effects which cannot be avoided if the project is implemented, mitigation measures proposed to minimize the significant effects, alternatives to the project, the relationship between local short-term uses of the environment and the maintenance and enhancement of long-term productivity, statements of significant irreversible environ- mental changes which will result from the project and the growth-inducing impact of the action. 4. The Final Environmental Impact Report contains the comments and recom- mendations received on the Draft Environmental Impact Report a list of persons, organizations and public agencies consulted and commenting on the Draft Environmental Impact Report, and responses to significant environmental questions raised in the review and consultation process, a notice of completion of the Final Environmental Impact Report was filed with the Secretary of the Resources Agency as required by law. 5. Since completion of the Final Environmental Impact Report there have been no substantial changes in the proposed project, or in the circumstances under which the project is to be undertaken, or new information, which require its revision; the Final Environmental Impact Report is therefore certified as complete. The motion carried by the following roll call vote: AYES: Kelly, MacAllister, Green, Thomas NOES: Finley, Mandic, Bailey ABSENT: None RECESS - RECONVENE The Mayor called a recess of Council at 11:20 P.M. The meeting was reconvened at 11:25 P.M. r 141 oLnt a.� Cond• Mort C V&r7 r 1 6 u� 1 ` 1-3 hand rc.� I� q,gdct- tnvt�•d►'" Honorable Mavor and Cicy Council Members of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92640 ZS. Springfield Property '=rust Dear Mayor and Members cf the City Council : ANGUS Petroleurn Corporation ( "ANGUS" ) is preca_ed to establish a One Million Dollar trust for the benefit of owners of property 'located within one hundred ieec of cne Springfield Avenue Drill Site as shorn on page :our of the ai_tached summary of the Springfield Prope•rt-v r rus= , the "Trust" ) . At your request we have prepared the enclosed suaLmary and will deliver a copy of this letter to each affected homeowner . As set forth in the sun-nary, the features -:,f the trust include : 1 . Pavment by the Trust of up to One :Million Dollars ($1 , 000 , 000 . 00) for claims of loss Of property value during the drilling period from. March 1 , iy"e.% tQ February 28 , 1990 , for properties located within one :hundred feet of the Springfield Drill Size . 2 . Pavmen_ ,-;v _he Trust of the haiance c.L t,le 0--1e Million Dollars after the drilling period on an equal. one third basis to : ( a) Owners of properties located within one hundred fee`_ of the Drill Site /\ r Honorable Mayor and City Council Members of the City of Huntington Beach Page 2 (b) The City of Huntington Beach for parks and _` recreation purposes within one Nile of the J` Springfield Drill Site ; and (c) Angus Petroleum Corporation. 3 . Administration of and distribution -from the Trust to be by an independent third-pa:=y trustee =o the maximum extent possible . 4 . Payment by the Trust of all appraisal and other costs associated with the compensation program. As an example of our commitment to the City of Huntington Beach and our neighbors , ANGUS is prepared to establish the Trust as soon as the Springfield Oil Recovery Project is approved by the City of Huntington Beach. Upon approval we will immediately work with the City of :Huntington Beach to prepare the necessary documentation -to create the Trust-- . I We 'look forward to working with you and our neiahbors to establish and operate the Springfield Property Trust- . Very truly _yours , John Carmichael Vice President Enclosure 0883B r ANGUS PETROLEUM CORPORATION PRESENTATION TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA REGARDING THE SPRINGFIELD PROPERTY TRUST . OCTOBER 16, 1986 SPRINGFIELD PROPERTY TRUST SUMMARY ANGUS PETROLEUM CORPORATION WILL ESTABLISH AN IRREVOCABLE TRUST TO PROVIDE VALUE PROTECTION FOR CERTAIN PROPERTIES ADJACENT TO THE PROJECT DRILLSITE . (SEE MAP) . ADJACENT OWNERS SELLING THEIR PROPERTIES DURING DRILLING ACTIVITIES WHO EXPERIENCE A RELATIVE DECLINE IN PROPERTY VALUE WILL BE COMPENSATED BY THE TRUST . ANGUS WILL ESTABLISH THE TRUST UPON CITY COUNCIL APPROVAL OF I THE PROJECT , AND SHORTLY THEREAFTER WILL CONTRIBUTE TO THE l TRUST : C - 250,000 CASH . $750,000 DEDICATION OF SPRINGFIELD PROJECT REVENUES . . ANGUS WILL APPOINT A TRUSTEE TO OPERATE , ADMINISTER , AND CARRY OUT THE PURPOSES OF THE TRUST . THREE YEARS AFTER THE START pF DRILLING ACTIVITIES, THE TRUST WILL TERMINATE AND ITS REMAINING ASSETS DISTRIBUTED: - ONE THIRD TO ADJACENT PROPERTY OWNERS . - ONE THIRD TO PARKS & RECREATION (EG . MCCALLEN PARK ) . - ONE THIRD TO ANGUS . IN ADDITION TO THE TAX REVENUES , STREET IMPROVEMENTS , AND OTHER BENEFITS THE PROJECT CONTRIBUTES TO THE SURROUNDING NEIGHBORHOOD AND TO THE CITY, THE TRUST WILL ALSO PROVIDE : - VALUE PROTECTION TO OWNERS NEEDING TO SELL . - PARTICIPATION TO OWNERS NOT NEEDING TO SELL . - RECREATIONAL BENEFITS TO ALL NEIGHBORHOOD RESIDENTS . j(- SPRINGFIELD PROPERTY TRUST PROCEDURES FAIR MARKET VALUE ANGUS AND ADJACENT OWNERS WILL EACH SELECT A QUALIFYING "RM" APPRAISER TO INDEPENDENTLY DETERMINE FAIR MARKET VALUE . THE TWO APPRAISERS WILL AGREE TO A SINGLE FAIR MARKET VALUE . IF THEY CANNOT AGREE , THEY WILL JOINTLY APPOINT A THIRD itRM" APPRAISER WHOSE SOLE APPRAISAL WILL DETERMINE FAIR MARKET VALUE . THE TRUST WILL PAY ALL REASONABLE AND CUSTOMARY APPRAISAL FEES . RELATIVE DECLINE IN FAIR MARKET VALUE THE FAIR MARKET VALUE WILL BE PERIODICALLY ADJUSTED BY AN APPROPRIATE INDEX TO REFLECT CHANGES IN MARKET VALUES OF COMPARABLE REAL ESTATE IN THE IMMEDIATE AREA NOT AFFECTED BY DRILLING OPERATIONS . IN THE EVENT OF A BONA-FIDE SALES CONTRACT AT A PRICE LESS THAN THE ADJUSTED FAIR MARKET VALUE, THE DIFFERENCE WILL DETERMINE THE RELATIVE DECLINE IN FAIR MARKET VALUE . COMPENSATION THE TRUST WILL COMPENSATE THE OWNER BY AN AMOUNT EQUAL TO THE RELATIVE DECLINE IN FAIR MARKET VALUE LESS AN ADJUSTMENT FOR THE DIFFERENCE IN BROKERAGE COSTS , IN THE EVENT OF A DECLINE IN FAIR MARKET VALUE , ANGUS AND/OR THE TRUST WILL HAVE A RIGHT OF FIRST REFUSAL TO PURCHASE THE PROPERTY . OWNERS RECEIVING COMPENSATION FOR A DECLINE IN FAIR MARKET VALUE WILL NOT BE ENTITLED TO RECEIVE ANY ADDITIONAL DISTRIBUTION OF TRUST ASSETS WHEN THE TRUST TERMINATES . .ya_y,_ - - `•S.-%y Win.-.. - .-?'•5'•_.. :.i.' - - �:p%,a„y.;.;. - - -r .-{ � c - �:SC?CTi. c- .r - �t •rra - " g. s SPRINGFIELD PROPERTY TRUST EXAMPLES EXAMPLE I INITIAL FAIR -MARKET VALUE $ 135 ,000 MARKET VALUE INDEX (ASSUME 10% INCREASE) X - 1 . 100 ADJUSTED FAIR MARKET VALUE $ 148 ,500 ACTUAL SELLING PRICE 145,000 E RELATIVE DECLINE IN FAIR MARKET VALUE $ . 3.5.00 t ADJUSTMENT FOR 6% BROKERAGE. COST _ 210 i COMPENSATION TO BE PAID BY TRUST $ 3 .290 EXAMPLE 11 INITIAL FAIR MARKET VALUE $ 135,000 MARKET VALUE INDEX (ASSUME 10% INCREASE) X 1 . 100 ADJUSTED FAIR MARKET VALUE $ 148 ,500 ACTUAL SELLING PRICE 150,000 RELATIVE DECLINE IN FAIR MARKET VALUE —0— ADJUSTMENT FOR 6% BROKERAGE COST —0— COMPENSATION TO BE PAID BY TRUST —0— '..���ri^' �:f• s7F ��'+;••3t:;<,..i` _� r +.;' l.x°.,_ �-� •�" TS� �s�;r � �- -- __.t-� �-- . �i'. •;.- ys`-xcs ='�•-�"+`x �i '�, t'-r '/cam• xS _ =�i�`,�Y'y�.s.�� 1:.7' r�.� ,m�'.'.-... C:• f+{. �+ux,.: �"'F:i�1�3: ::ew "�t.�r.':_. ��'i'��.. ',-.s. �'��l___... v 7 _ .'i•``LS i.^- %�pfi.a����. � z'�C• �. �'�:%r� � �; z '�,•.�'.�'•��'t-�,� r �et...,��a9.'� -s':: _ _ i'S!'y;� 7e -- 7,`:^�:: '�i.:'> � "+�•'ate *.. Z.. -.E.. 3 r_ _�.. �,'+�F:a-.;•a•• - �:\'.:�?i � �" i--�'_• r^i''r ski..Y}- ?��;++.,.�•y'1S:".� 'L'.`Sfi •,.��� -�-!�� �w. .r-� (`�'i...}ir, t ;.*e-.. ���� _•f: ♦.'c -t..: i.- �-''t�� �.•i•'�6,�K{'t' E R�.�.x �, 1- '0+' %i�r•-'ti� -'r rya•';•s �r,Y`;��=r.:- v.t '.i•. _ 'may.-. �_.;; •.�>: _ �w a. ' .r• �`-^.s .�'.{;�.r S. ''- -.r;i•3;.9x •:�' .' � - �,�.:.:� R� i Y: , ?X.: y!s1�.�• �.�. r i:-= � yr..,'!'�•.�•�',-�,�::j ,,.. ��-'-�".F,r�:+,yL�tis•Z%�. �Xr� r�.�- .%- .-✓:-••-`�V.i�:.T-�r_� ;�• �et„� �►, :4 ,;"? w a,.. =>l-' . SPR I NGF I D' PROP -► ,. � � _.,�:fa �,..f.� EI. ERTY`TRUSt .Y s^��. 4i:?br{�>, `;• .Y}`. � :. •t '•.f� NO P RO PERTY����•�,•. ,y e�, i.�.. •..ice: ..1 .T�tir.'•3-' -[...w4.. -C..,,� Tl. S�' 1. �•5` s7:•- - - � yam;=• _ -?s��.: .. �•�:; .p: ''f{'%•" Y{+ •:cn 1`-`.;�s.�F-,;.`�•e�'y,�1ix-:,�: •.ter:: _ N TORONTO AVE. FACILITIES k ASHANTE t SPRINGFIELD AVE. ' � 1 1 _ � j y N DRILL F ' 0 i z SITE w � 0 I O cc z I 75 J � 1 ' ROCHESTER AVE. 1 1 GENERALLY, THOSE PROPERTIES HAVING ANY PORTION OF THEIR BOUNDARIES WITHIN THE AREA FORMED BY EXTENDING THE CURB LINE OF THE DRILLSITE PROPERTY" 100 FEET-- IN ALL DIRECTIONS.`;- t Ji``• w .,tea SO ago- / I. F Fill F��'�;���©��i���►"= ,M��r w1,� �_.'.'tom ��`7 ������^ ams ` MA W FT r CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: Honorable Mayor and Councilmembers FROM: Connie Brockway, City Clerk RE: 10/20/86 ANGUS PETROLEUM PUBLIC HEARING-ZONE CHANGE 86-4 - USE PERMIT 86-7 -FINDINGS AND AMENDED CONDITIONS DATE: July 7, 1995 Attached are copies of the 10-20-86 City Council Minutes regarding the public hearing on appeal Zone Change 86-4, Use Permit 86-7, EIR 86-1. The City Council motion on page No. 5 (highlighted) includes adoptions of findings and conditions including amended Condition No. 56 (Trust Fund) and a letter from Angus received 10/17/86. Page No. 13 - City Council Minutes sets forth Condition No. 56 (property value protection plan). I have attached the letter from Angus received 10/17/86 and the accompanying Springfield Property Trust Summary wherein the first paragraph refers to value protection and the remainder of the document describes the trust. The documents I have attached are obtained from the official zone change records on file in the City Clerk's Office. Please inform me should you have any questions. r cc: City Administrator City Attorney Community Development Department g:\95cbmem\95-079 r Page 4 - Council Minutes - 1U/20/86 AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: None ABSENT: None JOINT SPECIAL MEETING SCHEDULED 10/27/86 - COUNCIL/REDEVELOPMENT AGENCY A motion was made by Bailey, seconded by Thomas, to hold a ,joint Special Meet- ing October 27, 1966 to consider all the Redevelopment Agency items scheduled to be heard October 20, 1986. The motion carried unanimously. PUBLIC HEARING - PLANNING COMMISSION OVERRULED - ZONE CHANGE 86-4 - APPROVED - USE PERMIT 86-7 - APPROVED WITH FINDINGS AND AMENDED CONDITIONS - EIR 86-1 CERTIFIED - ANGUS PETROLEUM CORP The Mayor announced that this was the day and hour set for a public hearing continued open from October 13, 1986 to consider an appeal filed by Councilman John Thomas to the Planning Commission's denial of Zone Change 86-4, Use Per- mit 86-7. Zone Change 86-4 proposes a change of zone from "Oldtown Specific Plan - Dis- trict 2-0" to "Oldtown Specific Plan - District 2-01.". Use Permit 86-7 - to develop a consolidated drillsite and oil operation. The subject location is two blocks bounded by Delaware Street to the east, Huntington Street to the west, Toronto Avenue to the north and Rochester Avenue to the south. The Mayor stated that Environmental Impact Report 86-1, assessing the environmen- tal effects of said proposal would also be considered by the City Council. The City Clerk announced that an informal petition had been submitted listing approximately 402 signatures in opposition and that communications in opposi- tion had been submitted by James E. Walton. Staff reports were presented by the City Administrator; the Director of Devel- opment Services, Scott Hess, Assistant Planner; Pam Posten, Assistant Planner; Jim Crisp, Vice-President of BCL regarding environmental concerns; and Fire Chief Picard. Planning Commissioner Porter informed to Council as to the rea- sons why the Planning Commission denied Zone Change 86-4 and denied Use Permit 86-7. Discussion was held between Mayor Mandic and staff regarding Phase 1 and Phase 2 of the project; and the noise equivalent. Discussion was held regarding the time to be allowed for public testimony. Spencer Sheldon, Kevin Williams, B. G. Williams, Edd Schofield, Nick McLachlan, John Rohrig, Ted Ehring, George Grundt, Kathy Walker, Larry Washa, Mel Frost, Dr. Ed Helton, Craig Webb, Mickey Shafer, Steven Berg-Hansen, Martha Brock, John Van Haulen, Tom Van Tuyl and Kirk Kirkland spoke in support of the project. Stan Lawrence, Robert Richardson, Dean Albright, Sharon Sarkis, Rachael Kaloian, Jason Rosen, Paula Rosen, Michael Craig, Dolores Walton, Lynn Moseman, G. T. Lee, Nancy Hartmann presented certified copy of CC&R's, Peter Fassnacht, Steven Ganetos, Lucille Battu, Michael Kaloian, George Corry, Mark Conley, Dirk Hartmann spoke in opposition to the project. 7i2 Page 5 - Council Minutes - '20/86 Discussion was held regarding whether to close the public hearing and continue with the rest of the agenda. A motion was made by Kelly, seconded by Bailey, to close the public hearing and to continue discussion of the matter at the present time. The motion car- ried by the following roll call vote: AYES: Kelly, MacAllister, Finley, Bailey, Thomas NOES: Mandic, Green ABSENT: None The City Clerk presented Ordinance No. 2876 for Council consideration - "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH ORDI- NANCE CODE BY AMENDING SECTION 9061 TO PROVIDE FOR CHANGE OF ZONING FROM OLD- TOWN SPECIFIC PLAN (DISTRICT TWO) WITH OIL SUFFIX TO OLDTOWN SPECIFIC PLAN (DISTRICT TWO) WITH OIL SUFFIX FOR DRILLING PURPOSES ON REAL PROPERTY GENER- ALLY LOCATED BETWEEN DELAWARE STREET TO THE EAST, ROCHESTER AVENUE TO THE SOUTH, CALIFORNIA STREET TO THE WEST, AND SPRINGFIELD AVENUE TO THE NORTH." (ZONE CHANGE #86-4)". The City Attorney stated that CC&R's were only enforceable between the private parties who own the property. She stated there was no conflict of interest to disallow Councilman Thomas from voting on the issue. She referred to a letter from Angus Petroleum stating that there was no existing contract between Angus Petroleum and Councilman Thomas. A motion was made by Bailey, seconded by Finley, to uphold the decision of the Planning Commission and approve Environmental Impact Report 86-1, and deny Zone Change 86-4 with findings set forth in the October 13, 1986 RCA and to teeny Use Permit 86-7 with revised findings as set forth in the October 133, 1986 RCA. Following discussion, the motion failed by the following roll call vote: AYES: Finley, Mandic, Bailey NOES: Kelly, MacAllister, Green, Thomas ABSENT: None A motion was made by Green, seconded by Kelly, to certify Environmental Impact Report 86-1 as adequate and in conformance with California Environmental Impact Report Guidelines and to overrule the Planning Commission decision and approve Zone Change 86-4 and Use Permit 86-7 with findings and conditions as amended to include optional Condition No. 55 pertaining to a five member review committee to monitor and inspect the project; Condition No. 56 pertain- ing to the one million dollar trust fund that Angus Petroleum Corporation is prepared to establish per the letter from Angus received October 171, 1986; Condition No. 57 pertaining to video camera scanning the drill site that can be viewed by 24-hour security personnel at the tank farm site; and amending Condition No. 13 to change the words to read ". . .50 dBA. . .", and to approve introduction of Ordinance No. 2876, after reading by title; the findings and conditions are as follows: Findings for Approval - Zone Change No. 86-4: 1. A change 3f zone from "Oldtown. Specific Plan, District Two-O" (Oil Opera- tions excluding Oil Drilling) to "Oldtown Specific Plan, District Two-01" (Oil Operitions including Oil Drilling) will be compatible with surround- Page 6 - Council Minutes - J"120/86 ing residential uses based on the mitigation measures described in the environmental impact report and conditions of approval outlined in the use permit. 2. The proposed zone change is consistent with the goals and policies of the General Plan. Unitization and consolidation of existing oil operations is encouraged because it reduces the land area used for oil facilities. Approximately 5.3 acres of developable land will become available after the consolidation on the two blocks (3.1 acres) . 3. Compliance with Title 15 of the Huntington Beach Municipal Code and the use permit conditions of approval will ensure that the proposed use allowed by the zone change will not be detrimental to the general health, welfare, and safety of the community. Findings for Approval - Use Permit No. 86-7: 1. The establishment, maintenance and operation of the oil operation will not be detrimental to the general welfare of persons residing or working in the vicinity, property and improvements in the vicinity of such use or building based on the conditions of approval and compliance with Title 15 of the Huntington Beach Municipal Code. 2. The proposed oil operation is consistent with the goals and objectives of the General Plan. Oil activities are a consistent use in any land use category of the General Plan. 3. The project will consolidate oil operations in one location reducing the visual impact of numerous wells now spread throughout the Springfield Oil Field area. Such consolidation will also be advantageous for safety and noise reduction purposes. The project will result in the abandonment and reclamation of 34 existing wells and 16 oil storage tanks in the Spring- field Oil Field area and will not significantly increase traffic in that area. 4. The project will result in increased tax revenues for the City of Hunt- ington Beach and other governmental agencies. 5. The conditions of approval are desirable and necessary in order to effec- tuate the purposes of the Huntington Beach Municipal Code, the official General Flan Land Use Plan and the best interests of the City. Further, they include mitigation measures set forth in the final Environmental Impact Report that will assure the location is suitable for the type of use proposed and the following will not result or be reasonably anticipa- ted from the project: damage or nuisance from noise, smoke, odor, dust or vibration; hazards from explosion, contamination or fire; hazards occa- sioned by unusual volumes or character of traffic; incompatibility with surrounding development. And, the project complies with all requirements of Division 9 and other applicable provisions of the Huntington Beach Municipal Code. 6. The conditions imposed include requirements of plans for the disposition of oil wells and for oil operations on the property involved, and for berms, walls and landscaping to provide maximum feasible screening of equipment and facilities. 4 , Page 7 - Council Minutes - 10/20/86 7. Changes have been required and incorporated in the project during the course of the public hearing and consultation process to mitigate or avoid the significant adverse environmental effects of the project; the Division of Oil and Gas enforces rules and regulations for the conduct of secondary recovery operations; the mitigation measures incorporated, pro- posed and adopted, together with application of the rules and regulations of the Division of Oil and Gas, will effectively mitigate all of the adverse impacts identified; public agencies other than the City, includ- ing the Division of Oil and Gas, Regional Water Quality Control Board and South Coast Air Quality Management District, will be reviewing aspects of this project for mitigation measures as to matters within their responsi- bility and jurisdiction, including subsurface operation, water and air quality; the critical need for oil renders infeasible the alternatives of no project or delayed project implementation, and alternative surface locations are infeasible because of their limited availability, or the greater disruption to the community at large which would result therefrom. 8. The subject location is centrally located within the Springfield Oil Field area; relocating the proposed project to another site is infeasible. 9. No substantial public purpose would be served by denial of Use Permit No. 86-7 but rather: (a) It is important that the United States develop its existing oil reserves in order to meet its energy needs without increasing dependence on foreign oil, and this project will result in incremen- tal recovery of approximately five (5) million barrels of oil; and (b) The project will consolidate oil operations in one location, reduc- ing the visual impact of numerous wells now spread throughout the Oldtown portion of the City; and (c) Such consolidation will also be advantageous for safety and noise reduction purposes; and (d) The project will be only an interim use of the surface site involved, and at the termination of the project the site will be available for recycling into other uses; and (e) The project will benefit and accrue to the general welfare of the City and the public for each of the reasons set forth above. (f) Approval of this project will reduce the immediate demand for more off-shore drilling facilities. 10. The proposed oil consolidation project will have 24 hour on-site person- nel, and will be safer than the existing non-continuous monitoring of the 34 scattered wells to be abandoned throughout the area. This will reduce the possible attraction of younger persons. 11. The most modern, efficient energy-saving equipment available will be integrated into the design of the project which will mitigate environmen- tal impacts such as fire, noise and air pollutants. �v� Page 8 - Council Minutes - 10/20/86 12. The applicant has submitted a property value protection plan which will be implemented as outlined prior to drilling. Conditions of Approval - Use Permit No. 86-7: 1. The site plan dated August 15, 1986, and section drawings dated August 27, 1986, shall be the conceptually approved layout. (a) This use permit shall not become effective until Zone Change No. 86-4 has been approved and in effect. 2. All structures and procedures shall conform to Title 15 of the Huntington Beach Municipal Code and the Division of Oil and Gas Standards. 3. The applicant shall obtain all necessary electrical and building permits. 4. 'Measures to reduce erosion should be used during grading and site prepa- ration. Grading and construction activity shall take place only during daylight hours. 5. During grading and excavation, earthmoving crews should observe cuts and spoils for potential archaeological finds. In the event of a potential find being located, operations shall be suspended until the significance of the find is determined. 6. A dust control program shall be submitted to the Department of Develop- ment Services for review and approval prior to the issuance of building permits. 7. Prior to any on-site construction or drilling, the masonry wall and all landscaping and street improvements shall be installed. 8. Prior to the installation of any landscaping, a landscape and irrigation plan shall be submitted to the Department of Development Services and Public Works for review and approval. (a) All landscaping shall comply with Chapter 15.22 of the Huntington Beach Ordinance Code and all trees shall be minimum 24 inch box type and spaced no greater than 20 feet on center. 9. Prior to the installation of the office structure, elevations shall be provided for review and approval by the Development Services department. (a) The office shall be on a permanent foundation. (b) A mansard or pitched roof shall be provided. 10. The applicant shall enter into a franchise agreement with the City for the installation of the underground connection between the two blocks. 11. The proper sealing and abandonment of the existing scattered wells which will be replaced by this project shall take place following approval of this project and must be completed within eighteen (18) months. '4 :143 Page 9 - Council Minutes - 10/20/86 12. The surface of the site shall be completely covered with an appropriate material (such as gravel) subject to review and approval of Development Services. 13. A report prepared by an acoustical engineer shall be submitted to the Department of Development Services for review and approval prior to com- mencing drilling. Said report shall predict and project dBA sound levels at the Angus Oil Site property line and adjacent residential property line both with and without an acoustical blanket on the drilling rig and service rigs. The report shall indicate noise attenuation measures necessary to assure compliance with the Huntington Beach Noise Code and a maximum noise level at the residential property line of 50 dBA during the nighttime hours between 10:00 PM and 7:00 AM. (a) A double acoustical blanket enclosure shall be provided at man-door entrances. 14. Noise attenuation for the drilling operation, oil operation and service operation shall be provided pursuant to the Oil Code and noise report specified in Condition 13. (a) If a noise problem occurs, the entire drilling structure shall be wrapped with an acoustical blanket for greater noise attenuation. 15. The project shall fully comply with the Huntington Beach Noise Ordinance. 16. No speakers, loud bells or buzzers shall be employed on site. 17. Excessive vibration, as determined by the Director of Development Ser- vices, shall be reduced to acceptable levels. 18. Light and glare shall be directed and/or screened to prevent "spillage" onto adjacent residential properties. 19. All heavy truck traffic shall be limited to the following streets between the 405 freeway and the subject site: Beach Boulevard, Adams Avenue, and Delaware Street. For entrance to the site only Springfield Avenue and California Street may be used. 20. Truck traffic shall be limited to the hours between 7:00 AM and 5:00 PM. (a) No trucks may park on the street. (b) Truck deliveries shall be staggered so that no more than two trucks shall be on the premises at any one time. 21. All employees must park on either one of the two sites both during con- struction and after. 22. Local streets affected by truck traffic shall be inspected before and after construction. Any damage to local streets by heavy trucks shall be repaired and reconstructed per City requirements at the expense of the applicant. 23. All driveways shall be radius type and constructed to Public Works stan- dards. - Page 10 - Council Minutes - 10/20/86 24. There shall be no entrance or exit of vehicles from the drilling site between the hours of 10:00 PM and 7:00 AM except for emergency purposes. 25. An overload permit should be obtained from City and State (if required) for all oversized loads to be moved on public streets. 26. Pipe string cementing through fresh water bearing sands shall be imple- mented to prevent salt water intrusion into the aquifers. 27. A system for collecting, treating, and releasing storm drainage must be provided by the applicant and approved by Public Works. 28. Excess brine must be treated and a permit obtained, to meet Orange County Sanitation District and City Fire Department standards prior to being released into the sewer system. 29. Recycling of produced zone water back to the oil reservoir shall be cert- ified by the Regional Water Quality Control Board and all its conditions and restrictions shall be adhered to. 30. Well service rigs shall be operated no more than 48 days per year between 7:00 AM and 7:00 PM or daylight hours, whichever is shorter. 31. No more than four well service rigs may be on the premises at any one time. The service rigs shall not exceed 100 feet in height and shall be double muffled and utilize acoustical blankets. 32. All drilling rigs and production wells shall be operated by electrical motors and electric pumps only. 33. The drilling rigs shall not operate for any longer than 2 years during Phase One. 34. Drilling rigs after the two year period for the remaining 16 wells (Phase Two) shall comply with the conditions herein and may not be installed after an additional two years. The second phase drilling shall be limi- ted to 7:00 AM to 10:00 PM only. 35. Drilling derricks shall not exceed 142 feet in height. 36. Upon completion of initial drilling of injection and producer wells, all I drilling rigs shall be removed from the site. 37. Service rigs shall be erected only during maintenance operations. 38. Applicant shall install blowout prevention equipment. 39. A full vapor recovery system shall be installed. 40. Only three on-site crude oil tanks are permitted and shall never be com- pletely full at once. 41. Prior to issuance of building permits, an emergency action plan, includ- ing employee training and periodic practice, shall be developed by the applicant with consultation from the City and other regulating agencies. The plan should include how spillage onto street from site(s) would be Page 11 - Council Minutes - 10/20/86 handled (stockpile of sand, etc.); the safe handling of any chemicals and/or materials, and full knowledge of all systems and emergency equip- ment. A copy shall be on file with the Fire Department and updated on a five year basis. 42. All oil must be transported by pipeline. 43. An on-site fire suppression system shall be installed as a primary source for fire protection. 44. Celler requirements for oil wells: (a) Must be provided with heat detection system from celler to 24 hour monitoring location. (b) Fire extinguishers approved by the Fire Department must be installed within 75 feet of travel. (c) Provide metal open grate covers over top of well cellers. 45. Storage tank requirements: (a) Must have pre-plumbed foam injection system installed on all product storage tanks. (b) Must have exterior deluge water spray system on all storage tanks. 46. Site requirements: (a) All diked areas must have an engineered drainage system. (b) Foam storage area and foam quantity to be approved by Fire Depart- ment. (c) Fire hydrants to be located in areas approved by Fire Department. (d) Hydrogen sulfide detection system approved by Fire Department to be installed on project perimeter. (e) Fire extinguishers approved by the Fire Department must be installed throughout the site. (f) All gate openings must be 24 feet in width and installation must comply with Fire Department Specification 403. 47. Well cellars shall be cleaned periodically to prevent waste accumulation. 48. Twenty (20) abandoned wells have been identified within the project area which do not meet present day abandonment requirements. A contingency plan shall be outlined and submitted to the Huntington Beach Fire Depart- ment for review and approval with steps to be taken in the event that leakage from any of these abandoned wells finds its way to the surface. 49. Prior to termination of the oil operation, a plan shall be submitted sub- ject to review and approval of the Fire Department and 'Development Ser- vices Department, showing how the site shall be abandoned and restored to its closest natural state. Page 12 - Council Minutes - 10/20/86 50. There shall be no pipeline construction activity outside the site except between the hours of 7:00 AM and 8:00 PM, Monday through Saturday only. 51. The methodology of oil recovery for this project shall be limited to water injection only. Steam injection shall be prohibited. 52. The operator shall at all times during the term of this use permit and any renewal or extension thereof, maintain in force an insurance policy or policies insuring the operator, and as additional insureds the City of Huntington Beach, the City Council and each member thereof, and every officer and employee of the City acting in the due course of his employ- ment or in his official capacity, against liability or financial loss resulting from any suits, claims or actions brought by any person or per- sons, and from all costs and expenses of litigation brought against the insureds, in the amount of not less than $5,000,000 combined single limit for any injury to persons or damage to property, including (but not limi- ted to) injury or damage from subsidence and rebound, resulting from the operator's oil drilling and production activities and operations inciden- tal thereto. Said policies shall provide that the insurance coverage shall not be cancelled or reduced by the insurance carrier without the City having been given at least ten days prior written notice thereof by such carrier. The operator shall not cancel or reduce said insurance coverage. At all times during the term of this use permit, and any renewal or extension thereof, the operator shall maintain on file with the City Clerk a certificate or certificates of insurance issued by the carrier or carriers showing that said insurance is in effect in the amount required above, and a copy of each insurance policy. If the oper- ator does not keep said insurance in full force and effect, the City may obtain said insurance and pay the premium thereon, which shall then be deemed a debt owned by the operator to the City. Any insurance policies procured by the operator hereunder shall provide that the insurance car- rier waives all rights of subrogation against the City. If the City obtains any policy of insurance hereunder, such policy shall include a waiver by the insurance carrier of all rights of subrogation against the operator. 53. The City Council shall review and, if necessary, may modify the condi- tions as set forth in this use permit, at the first regular City Council meeting following October 20, 1987, and at five year intervals there- after, and upon any change in ownership of the project which occurs between five-year reviews; provided that the phrase "change of ownership" as used herein shall not include any sale or other transfer to a corpora- tion, partnership or other form of business organization in which Alberta Natural Gas-United States and/or one or more of its shareholders or sub- sidiaries owns the controlling interests, or any sale or transfer so long as Angus or one of its subsidiaries retains responsibility for the opera- tion of the project. 54. The Planning Commission/City Council reserves the right to revoke this use permit if any violation of these conditions or the Huntington Beach Ordinance Code occurs. 55. A five member review committee shall be selected by the City Council com- prised of three property owners, who reside directly adjacent to the pro- ject site, one member of the Planning Commission and one City Council member. The Fire Department and Development Services Department shall 1.40 Page 13 - Council Minutes - 10/20/86 jointly provide a staff liaison. The purpose of this committee shall be to monitor and inspect the project on a quarterly basis during the drill- ing phase and semi-annually thereafter. 56. The property value protection plan submitted by the applicant shall be implemented as outlined prior to drilling. 57. In the event that either one of the two blocks is to be without 24-hour supervision, a video camera shall be employed on-site to provide continu- ous surveillance which can be monitored by personnel at the other site. Findings for Approval - Environmental Impact Report 86-1: 1. The Final Environmental Impact Report was prepared in compliance with the California Environmental Quality Act and the State CEQA Guidelines. 2. The Final Environmental Impact Report is an informational document which informed the City Council and the general public of the environmental effects of the project and which was read, reviewed and considered by the City Council before making its decision on the project. 3. The Final Environmental Impact Report contains discussions of the signi- ficant environmental effects which cannot be avoided if the project is implemented, mitigation measures proposed to minimize the significant effects, alternatives to the project, the relationship between local short-term uses of the environment and the maintenance and enhancement of long-term productivity, statements of significant irreversible environ- mental changes which will result from the project and the growth-inducing impact of the action. 4. The Final Environmental Impact Report contains the comments and recom- mendations received on the Draft Environmental Impact Report a list of persons, organizations and public agencies consulted and commenting on the Draft Environmental Impact Report, and responses to significant environmental questions raised in the review and consultation process, a notice of completion of the Final Environmental Impact Report was filed with the Secretary of the Resources Agency as required by law. 5. Since completion of the Final Environmental Impact Report there have been no substantial changes in the proposed project, or in the circumstances under which the project is to be undertaken, or new information, which require its revision; the Final Environmental Impact Report is therefore certified as complete. The motion carried by the following roll call vote: i AYES: Kelly, MacAllister, Green, Thomas NOES: Finley, Mandic, Bailey ABSENT: None RECESS - RECONVENE The Mayor called a recess of Council at 11:20 P.M. The meeting was reconvened at 11:25 P.M. r - -141 - I , . oLn�/� o,� fond%�'iort es�abl�sl+IM♦ AI•S r ti C v e Honorable Mayor and Cicy Council Members of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92643 R:7 : Springfield Property "rust Dear Mayor and Members of the City Council : ANGUS Petroleum Corporation ( "hLdGrJS" ) is prep._ed to establish a One Million Dollar trust for the benefit cf owners of property 'located within one hundred fees: of _ -;e Springfield Avenue Drill Site as shown on page four of the attached summary of t11e Springfield Property Trust ( the "Trust" ) . At ycur request we have prepared the. encl, sTe . su:lnary and will deliver a copy of this letter 'Co G4,ch af`ected homeowner . As set forth in the summary, the features D- .he trust include : 1 . Pavment by the Trust of up to One :Million Dollars ($1 , 000 , 000 . 00) for claims of loss of property value during the drilling period flrorr. March 1 , iy^% to Eebruary 28 , 1990 , for properties located withione hundred fe`t of the Springfield Drill S: e . 2 . Pavment b•r _he Trust of the to lance c,f tine One Million Dollars after the drilling period on an equal ine third basis to : (a) Owners of properties located within one hundred fee`_ of the Drill Site Honorable Mayor and City Council Members of the City of Huntington Beach Page 2 (b) The City of Huntington Beach for parks and recreation purposes within one mile of the Springfield Drill Site ; and (c) Angus Petroleum Corporation . 3 . Administration of and distribution from the Trust to be by an independent third-par_y tfustee =o the maximum extent possible . 4 . Payment by the Trust of all appraisal and other costs associated with the compensation program. As an example of our commitment to the City of Huntington Beach and our neighbors , ANGUS is prepared to establish the Trust as soon as the Springfield Oil Recovery Project is approved by the City of Huntington Beach . Upon approval we will immediately work with the City of Huntington Beach to prepare the necessary documentation. - to create the Trust . We look forward to working with you and our neighbors to establish and operate the Springfield Property Trust . Very truly yours , �- John Carmichael Vice President Enclosure 0883B I - ANGUS PETROLEUM CORPORATION PRESENTATION TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA REGARDING THE SPRINGFIELD PROPERTY TRUST . OCTOBER 16, 1986 I SPRINGFIELD PROPERTY TRUST SUMMARY ANGUS PETROLEUM CORPORATION WILL ESTABLISH AN IRREVOCABLE TRUST TO PROVIDE VALUE PROTECTION FOR CERTAIN PROPERTIES ADJACENT TO THE PROJECT DRILLSITE . SEE MAP) . ADJACENT OWNERS SELLING THEIR PROPERTIES DURING DRILLING ACTIVITIES WHO EXPERIENCE A RELATIVE DECLINE IN PROPERTY VALUE WILL BE COMPENSATED BY THE TRUST . ANGUS WILL ESTABLISH THE TRUST UPON CITY COUNCIL APPROVAL OF THE PROJECT , AND SHORTLY THEREAFTER WILL CONTRIBUTE TO THE TRUST : $250,��� CASH . $750,000 DEDICATION OF SPRINGFIELD PROJECT REVENUES , ANGUS WILL APPOINT A TRUSTEE TO OPERATE , ADMINISTER , AND CARRY OUT THE PURPOSES OF THE TRUST . THREE YEARS AFTER THE START OF DRILLING ACTIVITIES , THE TRUST WILL TERMINATE AND ITS REMAINING ASSETS DISTRIBUTED: - ONE THIRD TO ADJACENT PROPERTY OWNERS . - ONE THIRD TO PARKS & RECREATION (EG . MCCALLEN PARK ) . - ONE THIRD TO ANGUS , IN ADDITION TO THE TAX REVENUES , STREET IMPROVEMENTS , AND OTHER BENEFITS THE PROJECT CONTRIBUTES TO THE SURROUNDING NEIGHBORHOOD AND TO THE CITY, THE TRUST WILL ALSO PROVIDE : - VALUE PROTECTION TO OWNERS NEEDING TO SELL . - PARTICIPATION TO OWNERS NOT NEEDING TO SELL . - RECREATIONAL BENEFITS TO ALL NEIGHBORHOOD RESIDENTS . SPRINGFIELD PROPERTY TRUST PROCEDURES FAIR MARKET VALUE ANGUS AND ADJACENT OWNERS WILL EACH SELECT A QUALIFYING "RM" APPRAISER TO INDEPENDENTLY DETERMINE FAIR MARKET VALUE . THE TWO APPRAISERS WILL AGREE TO A SINGLE FAIR MARKET VALUE . IF THEY CANNOT AGREE , THEY WILL JOINTLY APPOINT A THIRD itRM" APPRAISER WHOSE SOLE APPRAISAL WILL DETERMINE FAIR MARKET VALUE , THE TRUST WILL PAY ALL REASONABLE AND CUSTOMARY APPRAISAL FEES . RELATIVE DECLINE IN FAIR MARKET VALUE THE FAIR MARKET VALUE WILL BE PERIODICALLY ADJUSTED BY AN APPROPRIATE INDEX TO REFLECT CHANGES IN MARKET VALUES OF COMPARABLE REAL ESTATE IN THE IMMEDIATE AREA NOT AFFECTED BY DRILLING OPERATIONS . IN THE EVENT OF A BONA-FIDE SALES CONTRACT AT A PRICE LESS THAN THE ADJUSTED FAIR MARKET VALUE, THE DIFFERENCE WILL DETERMINE THE RELATIVE DECLINE IN FAIR MARKET VALUE . COMPENSATION THE TRUST WILL COMPENSATE THE OWNER BY AN AMOUNT EQUAL TO THE RELATIVE DECLINE IN FAIR MARKET VALUE LESS AN ADJUSTMENT FOR THE DIFFERENCE IN BROKERAGE COSTS . IN THE EVENT OF A DECLINE IN FAIR MARKET VALUE , ANGUS AND/OR THE TRUST WILL HAVE A RIGHT OF FIRST REFUSAL TO PURCHASE THE PROPERTY . OWNERS RECEIVING COMPENSATION FOR A DECLINE IN FAIR MARKET VALUE WILL NOT BE ENTITLED TO RECEIVE ANY ADDITIONAL DISTRIBUTION OF TRUST ASSETS WHEN THE TRUST TERMINATES . Y. t, h _i SPRINGFIELD PROPERTY TRUST EXAMPLES EXAMPLE I INITIAL FAIR -MARKET VALUE $ 135 ,000 MARKET VALUE INDEX (ASSUME 10% INCREASE) X MOO ADJUSTED FAIR MARKET VALUE $ 148 ,500 ACTUAL SELLING PRICE 145,000 RELATIVE DECLINE IN FAIR MARKET VALUE $ . 3,500 ADJUSTMENT FOR 6% BROKERAGE COST 210 COMPENSATION TO BE PAID BY TRUST $ 3 ,290 EXAMPLE II INITIAL FAIR MARKET VALUE $ 135 ,000 MARKET VALUE INDEX (ASSUME 10% INCREASE) X 1 . 100 ADJUSTED FAIR MARKET VALUE $ 148 ,500 ACTUAL SELLING PRICE 150,000 RELATIVE DECLINE IN FAIR MARKET VALUE -0- ADJUSTMENT FOR 6% BROKERAGE COST -0- COMPENSATION TO BE PAID BY TRUST -0- Pt< I- NGve PROTECTED PROPERTY - TORONTO AVE. FACILITIES L------ ASHANTE I SPRINGMELD AVE. DRILL SITE 0 cc 0 < U- � < ui ROCHESTER AVE. GENERALLY, THOSE PROPERTIES HAVING ANY PORTION OF THEIR BOUNDARIES WITHIN THE AREA FORMED BY EXTENDING THE CURB LINE OF THE DRILLSITE PROPERTY" 100 FEET- IN ALL DIRECTIONS % Name,Address and Telephone r A '(s) space )w se of Court Clerk Only Michael A. Banzhaf F I L Ball , Hunt , Hart, Brown & Baerwitz 211 E. ocean Blvd. , P.O. Box 1287 SEP 2 3 1987 Long Beach , CA 90801 ( 213 ) 435-5631 GARY L. CiRANVILLE, Coun�)J Cie,,� Attorney(:) for . . Petitioner and Plaintif f By DEPUTY SUPERIOR ORANGE . . . . . . . . . . .COURT OF CALIFORNIA, COUNTY OF. . . . . . . . . . . . . . . . . . . . (SUPERIOR, MUNICIPAL, or JUSTICE) . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Name of Municipal or Justice Court District or of branch court, if any) Plaintiff(s)• A11GUS PETROLEUM CORPORATION, CASE NUMBER 53 31 82 a Delaware corporation, etc. REQUEST FOR DISMISSAL TYPE OF ACTION Defendant(s). THE CITY OF HUNTINGTON Personal Injury, Property Damage and Wrongful Death: BEACH , et a 1 . ❑ Motor Vehicle ❑ Other Domestic Relations Eminent Domain ® Other: (Specify) .Whit..pf,,Mandate . . ., . (Abbreviated Tale) TO THE CLERK: Please dismiss this action as follows. (Check applicable boxes.) 1. ® With prejudice EJ Without prejudice 2 ® Entire action EJ Complaint only Petition only Cross-complaint only ❑ Other: (Specify)' r September 22, 1987 Datedp. . . . . . . .. . .. . .. . ..... . ... . . .. .. . .. . 'If dismissal requested is of specified parties only, of specified Attorney(s) for . Petitioner P . . . . .. . . . . . .. .. . .. ... . . rauses of action only or of specified cross-complaints only, so state and identify the parties, causes of action or cross-complaints Michael A. Banzhaf to be dismissed (Type or print attorney(s) name(s)) TO THE CLERK: Consent to the above dismissal is hereby given." Dated• .. . .... . . . . . . ...... ... .. . .. . .. . . —When a cross-complaint (or Response (Marriage) seeking affirma- Attorney(s) for . . . . .. . . . . . . .. . .. . .. .... . . . tive relief) is on file, the attorney(s) for the cross-complainant (respondent) must sign this consent when required by CCP 581(1), (2) or (5). (Type or print attorney(s) name(s)) (To be completed by clerk) SEP 2 3 1987 Dismissal entered as requested on . . . . . . .. . .. .. .. .. .... ..... .... . ... ... . .. . . ❑ Dismissal entered on . . .. . . . . . .. . I... . ... . . .. .. .as to only .. . .. . ... ❑ Dismissal not entered as requested for the following reason(s), and attorney(s) notified on . . . ... . .. . .... . . .. . .. . .. . GAR 1 1 _ GRANVILLC ,Clerk Dated SEP.23 1987 By GAIT. 1fOM . . . . . . . . .. .. .. . . . . . Deputy 3 Form Adopted by Rule 982 of CCP 581, etc.; The Judicial Council of California REQUEST FOR DISMISSAL Cal Rules of Court, Revised Effective July 1, 1972 7GR364 AC043 PS 3,82 Rule 1233 1 2 3 p 2 .39�? 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF ORANGE 10 11 ANGUS PETROLEUM CORPORATION, ) CASE NO. 53-31-82 a Delaware corporation, doing business) 12 in Orange County, California, ) 13 Petitioner and Plaintiff , ) STIPULATION BETWEEN PETITIONERS AND 14 vs . ) RESPONDENTS CON- CERNING DISMISSAL 15 THE CITY OF HUNTINGTON BEACH, ) OF THE SUBJECT a California municipal ) ACTION 16 corporation, THE CITY COUNCIL ) OF THE CITY OF HUNTINGTON BEACH, and ) 17 THE CITY ATTORNEY OF THE CITY OF ) HUNTINGTON BEACH, ) 18 ) Respondents and Defendants . ) 19 ) 20 21 WHEREAS, counsel for the parties hereto met on 22 September 16 , 1987 , at the offices of the City Attorney of the 23 City of Huntington Beach (the "City" ) to attempt to resolve the 24 issues raised by the captioned action and settle the captioned 25 action on a basis which is acceptable to all the parties 26 hereto; and 27 28 // 1 WHEREAS, in an effort to avoid the inherent risks of 2 costly litigation the parties have proposed to enter into this 3 settlement agremeent upon the terms and conditions set forth 4 below. 5 6 NOW THEREFORE, the following settlement is agreed upon 7 by and between the parties hereto : 8 9 1 . City Council will in accordance with the City 10 Charter and City Zoning Code, set aside its January 5 , 1987 , 11 vote to rescind Zone Change 86-4 and Use Permit 86-7 and 12 confirm that the October 20 , 1986 , City Council approval of 13 Zone Change 86-4 and Use Permit 86-7 was unaffected by the 14 City' s January 5 , 1987, vote and that Zone Change 86-4 and Use 15 Permit 86-7 are valid approvals which are in full force and 16 effect . 17 18 2 . As soon as possible after City Council takes the 19 action described above in Paragraph 1 , petitioner will cause 20 its attorney of record to dismiss the captioned action with 21 prejudice; will release the City, its officials , employees , and 22 agents , the City Council , and the City Attorney from any 23 liabilities for attorneys ' fees or costs or damages resulting 24 from the actions challenged in the captioned action; and for 25 one ( 1) year from the date of filing of this stipulation with 26 the Clerk of the Superior Court of Orange County, will 27 indemnify, defend and hold the City, its officials , employees, 28 and agents , the City Council , and the City Attorney harmless -2- 1 from attorney' s fees and costs , or damages sustained by such 2 parties as the result of that certain action titled Concerned 3 Citizens for Huntington Beach, et al . vs . The City of 4 Huntington Beach, et al . , OCSC 50-71-35 , or any action 5 commenced within one ( 1) year from the filing of this 6 stipulation, which challenges the execution or performance of 7 this stipulation or the approval by the City Council of Zone 8 Change 86-4 or Use Permit 86-7 . 9 10 ACCEPTED AND AGREED THIS -22 day of September , 1987, 11 by and between : 12 13 THE CITY OF HUNTINGTON BEACH and THE CITY COUNCIL OF THE CITY OF 14 HUNTINGTON BEACH 15 16 By: 17 City Administrator 18 THE CITY ATTORNEY OF THE CITY OF HUNTINGTON BEACH 19 20 21 By: `� � .� ,� ✓ � �� 22 -1- 2- -J '� 1 CPS ANGUS Petroleum Corporation 23 24 25 By: OHN CAR ICHAEL 26 1481B rr m so MOM � 27 ' 2 3 198T 28 CEP WILLIAM F. M600"LO J+wd4e of &" r 436 1i rr -3- MINUTES CITY COUNCIL/REDEVELOPMENT AGENCY Council Chamber, City Hall Huntington Beach, California Monday, September 21, 1987 A tape recording of this meeting is on file in the City Clerk's Office Mayor/Chairman Kelly called the regular meeting of the City Council/Redevelop- ment Agency of the City of Huntington Beach to order at 7 p.m. COUNCIL/AGENCY ROLL CALL Present: Winchell, Mays, Finley, Kelly, Green, Bannister Absent: Erskine FLEDGE OF ALLEGIANCE AND INVOCATION The. Flag Ceremony was conducted by Huntington Beach Brownie Troop 1935 - Peggy McIntosh, Leader. The Pledge of Allegiance was led by Riley McIntosh and Natalie Varnar. The Invocation was given by Jenny Barcelona. AN UNCEMI+TT OF CLOSED SESSION ACTION - SETTLEMENT AGREEMENT WITH TO ANGUS TOTIOM CORP - COMMITTEE ON ANGUS PETROLEUM CONSOLIDATION PROGRAM CREATED - CHELL GRABEN M YS TO SERVE ON COH14ITT 9E Public statement of a Council action pursuant to Government Code Section 54957.1. Mayor Kelly announced that during the earlier Special Meeting of the City Council, Council had met in Closed Session pursuant to Government Code Section 54956.9(a) and discussed matters pertaining to pending litigation. He stated that during the Closed Session Council was briefed on the litigation, namely Orange County Superior Court Case No. 53-31-82 filed by Angus Petroleum Corporation. Mayor Kelly stated that Council had before them a proposed agreement which had been produced by Angus Petroleum Corporation and further negotiated by the City Attorney's Office for settlement. After being briefed on the pending litigation and the terms of the proposed settlement the City Council determined that in order to avoid the expense and risks associated with such litigation, the city's best interest is to enter into such a settlement agreement. The Council determined by a vote of tl.ree to two to approve the stipulation and authorize the Interim City Adminii,trator to execute same. Mayor Kelly, Councilmembers Green and Mays voted to approve the stipulation and Councilmem- bers Winchell and Finley voted against. Council further directed that a committee be empaneled consisting of three councilmembers, three members of staff and three members from the surrounding property owners to act as an Ad Hoc body to assure adherence to fifty-seven conditions regarding this entitlement. Page 2 - Council/Redevelopment Agency Minutes - 9/21/87 The Mayor appointed Councilmembers Winchell, Mays and Green to the Ad Hoc Com- mittee on the Angus Petroleum Consolidation Program. He directed that the interim City Administrator obtain the names of three property owners in the area that will serve on the committee. A copy of that stipulation will be on file in the City Clerk's Office for pub- lic review. PUELIC COMMENTS Fred Foreman spoke in support of the appeal filed by Adel Zeidan to the denial by the anning Commission of Use Permit No. 86-94, in conjunction with Condi- tional Exception No. 87-1, pertaining to a permit for the sale of alcoholic beverages at Mr. Zeidan's convenience market. Frank Zappia spoke in opposition to the appeal filed by Adel Zeidan to the denrehl Yy t e Planning Commission of Use Permit No. 86-94, in conjunction with Conditional Exception No. 87-1, pertaining to a permit for the sale of alco- holic beverages at Mr. Zeidan's convenience market. Lila Nowell, President of the Huntington Beach/Fountain Valley Board of Real- tors, re erred to her letter dated September 21, 1987 urging support of Ordi- nance No. 2905 only with the addition of Alternative 1. (later in the meeting staff informed Council that Ordinance No. 2905a had been drafted which included Alternative 1. Barbara Milkovich requested that the Huntington Beach Union High School tower 1b"6_TdiTjiiiti_d a city landmark. Frank Chambers requested a redevelopment moratorium on new projects. Jolene Foord recommended the city consider a program to separate and recycle trash suc as is under consideration by the City of Los Angeles. Bruce Pardue presented slides and requested Council assistance regarding prop- erty maintenance problems, including abandoned vehicles and oversize vehicle parking on Marie Street. The Mayor referred to matter to staff. Paul Picard reviewed a letter he proposes to submit to the Grand Jury regard- ing tie Civic Improvement Corporation and the selling of bonds in connection with the financing of City Hall. Cathy Fdmonson apologized to equestrians in the audience who were attending the meeting as the item pertaining to the Equestrian Center Report was not included on the Agenda. She stated thast their attorney had been notified and he would write a letter directly to the City Attorney. Paul Columbus stated he owns the buil,iing next to Mr. Zeidan's convenience market. Mr. Columbus stated his property meets parking code requirements and that no agreement had been reached with Mr. Zeidan regarding reciprocal park- ing. 4ON&ENT CALENDAL - (ITEMS REMOVID) Councilwoman Winchell requested that the item pertaining to the Reservoir Hill Booster Station be removed from the Consent Calendar for separate considera- tion. Page 5 - Council Minutes - February 17, 1987 A motion was made by Bannister, seconded by Finley, to approve the Allied Arts Board recommendations, as follows: (1) Approve staff recommendation for Phase I renovation and expansion of HCP amphitheater with inclusion of lighting - revised estimated cost of Phase I - $186,000 + contingencies - include in (CIP) budget as unfunded - submit for Council review as part of the CIP 1987-1988 budget process. (2) Approve staff recommendation to construct a bandstand facility in HCP - estimated cost - $62,000 + contingencies - include in (CIP) budget as unfunded - submit for Council review as part of the CIP 1987-1988 budget process. (3) Approve staff recommendation against the development of indoor playhouse theater in HCP. Following discussion, the motion carried by the following roll call vote: AYES: Winchell, Mays, Finley, Kelly, Erskine, Green, Bannister NOES: None ABSENT: None BUDGET AUTHORIZATION FOR ASSISTANT CITY TREASURER - FY 1986-87 - CONTINUED TO 7 The City Clerk presented a communication from the City Treasurer/Business License Manager regarding establishing the position of Assistant City Treas- urer. Robert Franz, Acting City Administrator, presented a staff report. Following extensive discussion, a motion was made by Erskine, seconded by Finley, to continue consideration to March 2, 1987 of a budget authorization for an Assistant City Treasurer and directed staff to ' furnish Council with an analysis of the issue. The motion carried by the following roll call vote: AYES: Winchell, Mays,. Finley, Erskine, Green, Bannister NOES: Kelly ABSENT: None PUBLIC HEARING - ANGUS OIL RECOVERY PROJECT - REQUEST FOR WITHDRAWAL BY APPELLANT APPROVED - APPEAL TO PC DENIAL OF ZONE CHANGE 86-4 USE PERMIT 86-7 CITY ATTORNEY TO PREPARE REPORT The Mayor announced that this was the day and hour set for a public hearing to consider an appeal filed by Angus Petroleum Corporation to the Planning Com- mission's denial of Zone Change 86-4 - a change of zone from "Oldtown Specific Plan (District 2)-0" to "Oldtown Specific Plan (District 2)-01." and Use Per- mit 86-7 - to develop a consolidated drillsite and oil operation. The subject location is two blocks bounded by Delaware Street to the east, Huntington Street to the west, Toronto Avenue to the north and Rochester Avenue to the south. Page 6 - Council Minutes - February 17, 1987 The City Clerk announced that aii legal requirements for notification, publi- cation and posting had been met, and that she had received a communication from John D. Carmichael, Vice President, Angus Petroleum Corporation, Appel- lant, on February 13, 1987 requesting withdrawal of the appeal. A motion was made by Bannister, seconded by Mays, to approve the request to withdraw the appeal received from John D. Carmichael, Vice President, Angus Petroleum Corporation, appellant, on February 13, 1987. The motion carried by the following roll call vote: AYES: Winchell, Mays, Finley, Kelly, Erskine, Green, Bannister NOES: None ABSENT: None In response to questions by Councilwoman Winchell, the City Attorney stated she would present a report to Council regarding the status of the Zone Change 86-4. RESOLUTION NO 5755 - ADOPTED - ORDERS VACATION OF EASEMENT OVER A PORTION OF PALM AVENUE The Mayor announced that this was the day and hour set for a public hearing pursuant to Resolution of Intent No 5751 adopted February 2, 1987 to vacate a portion of easement for street purposes on the south side of Palm Avenue between 15th and 16th Streets. The City Clerk announced that all legal requirements for publication and post- ing had been met, and that she had received no communications or written pro- tests to the matter. The Mayor declared the hearing open. There being no one present to speak on the matter and there being no protests filed, either oral or written, the hearing was closed by the Mayor. The City Clerk presented Resolution No. 5755 for Council consideration - "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ORDERING THE VACATION OF AN EASEMENT FOR PUBLIC STREET PURPOSES OVER A PORTION OF PALM AVE- NUE BETWEEN 15TH AND 16TH STREETS." A motion .was made by Erskine, seconded by Green, to adopt Resolution No. 5755 by the following roll call vote: AYES: Winchell, Mays, Finley, Kelly, Erskine, Green, Bannister NOES: None ABSENT: None JOINT MEETING OF THE CITY COUNCIL AND REDEVELOPMENT AGENCY Mayor Kelly announced that a joint meeting of the City Council and the Rede- velopment Agency had been called. CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH To CITY CLERK 'S OFFICE From EDWARD J. RUTYNA Deputy City Attorney Subject Angus Petroleum Corp. vs. Date September 23 , 1987 City of Huntington Beach, et al . Hand Deliver As per your request attached is a conformed copy of the 1) Request for Dismissal, and 2 ) Stipulation Between Petitioners and Respondents concerning dismissal of the subject action. The stipulation has been signed by the Honorable William F . McDonald, Judge of the Superior Court. Copies of both these documents should be made available to the public . If you have any questions, please contact me. EDWARD J . RUTYNA Deputy City Attorney jg Attachment cc: Arthur De La Loza, Acting City Attorney /0 At o/w cot)At oc 1447 t6 y UP Pt-? —Anivs 7-),l t4omk%ng Ze . ``,,PUBLICATION NO. TR31 ,th,l %486s so ID."I ty juiplion jr- ousoovid aLtt-4 Q(p ftVp**jtb 4-3 row Aty,,44fwd-c,DIII A,& LAND USE PLANNING IN URBAN IL- P R DU I N AREAS PROCEEDINGS OF THE WORKSHOP HELD ON FEBRUARY 25, 1982 IN HUNTINGTON BEACH, CALIFORNIA ... . ........ ee ...... . ... ..................... ................ ................................. ......... ........ ............................. ... ...................................... ............................... ....... . ... . ............. ............... ................. .................. ................. ...... ........ ... ........................ .. ........................... .. ........ ................. ................ ............ ........... ........... . .... .... ... ............ .......... ............. ............................... ..... ............... ...... ...... ....... .......... El H... E3 gee � 8 8 8 ® ® sae OE] HH tfl 11 ---------------- -------------------- - ----------------------------------------- ----------------------------------------- - ------------------------- -------------------- -----7-7 -. ------- -- -- ----- ------- - - - " ------------ ---- ---------------- ---- ------------------ 7-------------------- 7 ----------- ----------- -------------- --------------------------- ---------- -- -------------------------------- -------------------------------- g -------------------------------------- --------------------------------- ---- ----- -------------------------------- ------------------------------------------- -------------------------------------- ------------------------------------- --------------- -------------------------- - - -------------------------- --- -- ----------- --------------- - - -------- --------------- ---- --------- - CITY OF HUNTINGTON BEACH, DEPARTMENT OF DEVELOPMENT SERVICES, PLANNING DIVISION STATE OF CALIFORNIA, DEPARTMENT OF CONSERVATION, DIVISION OF OIL AND GAS pMi1N6 ��FpppNTY � we CITY OF HUNTINGTON BEACH STATE OF CALIFORNIA City Council GEORGE DEUKMEJIAN Governor RUTH FINLEY Mayor RESOURCES AGENCY RON PATTINSON Mayor Pro Tem GORDON K. VAN VLECK Secretary RUTH BAILEY JACK KELLY DEPARTMENT OF CONSERVATION DON MAC ALLISTER M.G. MEFFERD Interim Director ROBERT MANDIC JOHN THOMAS DIVISION OF OIL & GAS CHARLES W. THOMPSON City Administrator SIMON CORDOVA Acting Chief JAMES W. PALIN Director of Development services LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS Proceedings of the Workshop Held on February 25, 1982 in Huntington Beach, California City of Huntington Beach,Department of Development Services,Planning Division State of California,Department of Conservation,Division of Oil and Gas 1983 Sacramento Am SUMMARY This workshop on Land Use Planning in Urban Oil- Producing Areas, co-sponsored by the California Divi- sion of Oil and Gas and the City of Huntington Beach, was held in Huntington Beach on February 25, 1982. The issues addressed by the workshop included the in- creasing encroachment of urban development into oil- field areas, the importance of preserving access to urban oil fields, the advantages to be realized from oil- field unitization and the consolidation of surface opera- tions. It was recognized that urban oil production poses unique land use issues, but that careful planning can in- crease land use compatibility and help ensure that adverse impacts are mitigated to the greatest degree possible. The workshop brought together people from throughout the State who are interested in developing better land use planning and regulatory practices for urban oil-production areas. iii FINDINGS AND RECOMMENDATIONS Preserving Surface Access to Petroleum Owners of surface land areas designated as"oil islands" Resources should not have to bear unreasonable costs or hard- ships as a result of the planning or regulatory process. FINDINGS: Where the surface landowner has no financial interest in the mineral resource, some incentive, possibly in the The escalation of urban encroachment into oil fields is form of a fractional interest in the oil produced or a occurring not only in larger metropolitan areas but in transfer of development rights by local government, some rural and suburban communities as well. It was might be provided. generally agreed that local government planning departments have a principal role in determining how access will be retained and preserved through develop- ment of land use policies. Consolidation of Oilfield Operations It was also apparent that where subsurface mineral FINDINGS: rights are severed from surface ownership, the surface owner, unless receiving some benefit, has little incen- Consolidating surface operations frees land areas for tive to cooperate with either the oil operator or local other uses, and increases compatibility between oil government planners to preserve access. operations and other urban land uses. At the present time, neither State nor local laws ade- Older oil fields have become increasingly important quately address the issue of preserving surface access candidates for some form of enhanced recovery, which to the subsurface petroleum resource. may extend the life of the field considerably.Consolida- tion of new operations in older fields would allow con- RECOMMENDATIONS: tinued production of the field, and also provide local government with assurance that the oil activities will be Oil fields within areas of urban encroachment should be more compatible with the surrounding area. examined geologically to determine their suitability and potential for consolidating surface operations. RECOMMENDATION: Geologic studies, as well as planning considerations, Where oilfield conditions permit, consolidation of sur- should be taken into account in determining the sur- face operations should be encouraged by local govern- face location of areas to be preserved for access to the ments. subsurface petroleum resource. In planning for oilfield areas,local governments should employ land use regulations to preserve surface access Compulsory Unitization to the subsurface resource. Among the planning and regulatory techniques discussed were conditional use FINDINGS: permits, transfer of development rights, zoning, and general plan designations. If possible, these measures The mineral rights of oil fields are generally divided should be undertaken before urbanization of an oil field among several owners. Consolidation of surface opera- takes place. tions is dependent upon combining the individually owned portions of the subsurface oil-producing reser- There is a need for legislation that would require local voir into one unit under one operator. governments to take petroleum resources and access preservation into consideration when planning for land Unitization may be voluntary or compulsory; however, use in their jurisdictional areas.The State,without man- the State's compulsory unitization law is unwieldy and dating what methods local governments must use, provides so many disincentives that is has never been should enact legislation to ensure that this important used to unitize an oil field and is not an effective tool to issue is addressed by local governments. induce unitization. v RECOMMENDATIONS: Compatibility of Operations Where oilfield surface operations cannot remain FINDINGS: separated from other land uses, provision should be made by local and State regulatory agencies to en- In most cases, modern drilling techniques and produc- courage unitization of the mineral leases involved and ing methods now enable operators to drill wells and the consolidation of surface operations. produce oil in ways that can be compatible with other land uses and the environment. Consolidation of older, existing primary operations may not be justified economically. Generally, consoli- Noise, odors, and vibration from oil operations can dation of secondary or enhanced recovery operations is usually be mitigated to a large degree, and are genet warranted and feasible; therefore, such operations ally not objectionable under most circumstances. should be encouraged as vehicles to eventual consoli dation of all surface operations throughout the oil field. RECOMMENDATIONS: Where voluntary unitization has failed, the State's com- Local government should review any local codes or pulsory unitization law may be invoked; however, regulations pertaining to oil operations, or conditions because it has proved to be virtually unusable in its pre- that have been imposed on such operations in the past, sent form, that portion of the Public Resources Code to ensure that these statutes do not unreasonably should be amended to correct the deficiencies of the preclude or restrict oil operations that may be con- law as soon as possible. An effective State unitization ducted with new or improved technology and that they law would enable local government to develop land use reflect the best practical impact mitigation measures. guidelines that would permit continued development Consideration should be given to developing perform- and recovery of the petroleum resource through ance zoning standards for oil operations in areas where enhanced recovery methods. compatibility is a significant issue. vi ACKNOWLEDGMENTS Jan Denton Workshop Coordinators Director,California Department of Conservation H.Diane Border M.G.Mefferd Planner,City of Huntington Beach State Oil and Gas Supervisor, California Division of Ed Brannon Oil and Gas Energy and Mineral Resources Engineer, Ruth Finley California Division of Oil and Gas Mayor,City of Huntington Beach Charles W.Thompson Proceedings Editors City Administrator,City of Huntington Beach H.Diane Border James W.Patin City of Huntington Beach Director, Development Services, City of Huntington Michael J.Multari Beach City of Huntington Beach Project Directors E.R.Wilkinson California Division of Oil and Gas Michael J.Multari Associate Planner,City of Huntington Beach Special Assistance E.R.Wilkinson Alan V.Hager Special Representative,California Division of Oil Deputy Attorney General, and Gas California Department of Justice vii TABLE OF CONTENTS PAGE PREFACE ............................................................................................................................... xi INTRODUCTORY REMARKS.............................................................. 1 OIL PRODUCTION IN URBAN ENVIRONMENTS, E.R. Wilkinson ........................................................ 5 PLANNING GOALS AND APPROACHES, Michael Multari................................................................. 15 CASE STUDIES #1 OIL FACILITIES IN A DEVELOPEDAREA .............................................................................................. 17 #2 PLANNING FOR OIL AREAS ON THEURBAN EDGE................................................................................................. 29 #3 RELOCATING INAPPROPRIATELY SITED OIL FACILITIES...................................................................................................................... 37 WORKSHOP PARTICIPANTS............................................................. 41 SELECTED REFERENCES................................................................... 43 1X PREFACE A workshop on Land Use Planning in Urban Oil- ban areas prompted the Division of Oil and Gas and the Producing Areas, co-sponsored by the City of Hunt- City of Huntington Beach to co-sponsor this workshop, ington Beach and the California Department of Conser- which brought together people from throughout the vation, Division of Oil and Gas,was held in Huntington State to begin to develop better land use planning and Beach on February 25, 1982.The principal goals of the regulatory practices for urban oil production areas workshop were: 1) to recognize present problems based on current technology and the best available associated with oil production in urban areas; and 2)to information. discuss the importance of surface access preservation in oil fields and how oil production activities can occur The City of Huntington Beach has long been an area of more compatibly with urban activities through unitiz- significant oil production. It was also among the fastest ation and consolidation. growing cities in the country during the 1960's and 1970's. This rapid growth brought new houses and As the City of Huntington Beach was working with the commerce into once-open oil fields. Urban develop- Division of Oil and Gas to solve these problems in a ment of this type not only creates land use compatibility practical manner, it became apparent that other problems, but also covers so much of the surface of jurisdictions in the State were having similar ex- some oil fields that their potential for future oil extrac- periences with urban encroachment into oil fields. tion may be jeopardized. Growing concern over the future of oil production in ur- xi INTRODUCTORY REMARKS James W. Palin, Director, Department of constraints these technologies put on the production Development Services, City of Huntington process, as well as some of the opportunities they Beach: afford.Next,we will discuss case studies of situations in "Several factors have contributed to the urgency of Huntington Beach which we think will illustrate some of planning now for continued oil production in urban the problems—and some of the approaches to solving areas:the rising price of oil and the development of new those problems— that we have experienced here." extraction technologies have made the residual oil Ruth Finley, Mayor, Huntington Beach: found in oil fields underlying many urban areas an important source for future production of domestic "I want to thank you for coming to this workshop and petroleum products. Consequently, we are seeing the for joining with us to discuss these important planning life of existing fields lengthening, and some areas that issues. The Department of Conservation has co- were once considered to be near depletion are now sponsored this workshop with our City and has being eyed as long term producers. In several places provided both technical and financial support in there is a new interest in drilling and production. helping to make this session possible. We appreciate "At the same time,the value of land—especially in and the State's interest in these planning problems and its near urban areas— has increased too, in a large part in support in working with us toward acceptable solutions. response to housing demands.In many places,older oil I hope that today will provide a much needed fields constitute the only remaining open space within opportunity for State and local planners to share their an urban area. The urban and suburban uses are experiences,and to develop strategies for effective land expanding into oil producing areas. This results in use planning in urban oil areas. situations where oil facilities are in proximity to other "We in Huntington Beach are clearly interested in land uses, especially residential ones, which in turn can use planning for oil areas. The City's early history was produce problems and conflicts for both uses. Ways to tied to oilfield development. The field here currently reduce these conflicts while accommodating mixed use ranks seventh in the state in annual oil production and and protection of the valuable natural resource are the is the third largest California field in terms of concerns of this workshop:' cumulative production, having recently topped the one billion barrel mark. During much of this time, the oil Michael Multari, Associate Planner, City of wells were in open and undeveloped areas and there Huntington Beach: were few conflicts between oil and urban uses.However, during the 1960's and 70's, Huntington Beach was "The following is a summary of the format for today's among the fastest growing cities in the United States workshop. First of all, I want to emphasize that this is a and now has a population of over 170,000.The fact that `workshop'.We who work on oil activities in Huntington such a large and quickly growing community Beach and the people with the Division of Oil and Gas developed in the midst of widespread oil operations has do not presume to have the definitive answers for these forced us to deal with many of the problems that you kinds of problems. Rather, we have tried to create an will be discussing today, and some of our experiences, opportunity for people to talk about and share their both good and bad, will be used as case studies in experiences. We hope to get insights from each other's today's session. I hope that the dialogue afforded by work on how to solve problems related to oil this workshop will help all of us in developing sound production in urban contexts. land use planning and regulatory approaches for better "Today's agenda calls for some opening remarks by accommodating oil and other urban activities" Ruth Finley, our Mayor, and then some introductory comments by Jan Denton,the Director of the California Jan Denton, Director, California Department Department of Conservation,and by Marty Mefferd who of Conservation: is the State Oil and Gas Supervisor. Then, `Wilky' Wilkinson from the Division of Oil and Gas is going to "As community planners and participants in today's discuss some of the technologies related to oil workshop, I hope you realize the importance of the production in an urban context _and some of the individual contributions you make to the public. As 1 101 South Salt Lake Salt Lake $85 $111 3.2MMbbl San Vicente 4.1MMbbl Los Angeles City $62 $12 / Sawtelle 2.3MMbbl I ti • -.4MMbbl $53 +� + Union Station ' 2.0MMbbl • �_$12 I Montebello Cheviot Hills- itl3' .4MMbbl $101 $128 $89 • 3.7MMbbl \ 4.7MMbbl 33.1MMbbl Los Angeles owntown Inglewood $ Venice Beac $1 2OZ- 3.4MMbb1 di %East $21 ' $a2s40enegas $10 I Los Angeles Sansinena 44.SMMbbI .8MMbbl , 8.9MMbbl .4MMbbl $3MMbbl Whittier 5.,M $155 • 5.1MMhbl $13a Del Rey `Potrerol I8MMbb ��� Brea Olin $12 Santa Fe Springs C - .5MMbbl \ SMMbbI $453 West Coyote 4%1i22.8MMbbl �� A /Rosecrans 16.SMMbbI • fi $2 44 YorbaYinda El Seg do $116 I 7.9MMbbl �$705 $8 �\\ / �. -Sou bl 0 � 26.1MMbbl South Rosecrans Esperanza .3MMb Lawnda a 0• � � 'J' i $10 East Coyote . $4 . MMbbl � 4MMb r $188 .1MMbbl \Dominguez��I � • 7.0MMbbI Richfield •\Kraemer $259� Long Beach Olive $480 .3MMbbl 9.6MMbb1 /$1,206 $9i 17.8MMbb1 44.7MMbbl 3MMbbl -L$o'g BeacF -(irport • Torrance 1 $496 h� .4MMbb' M 18.4Mbi • Wilmington Seal Beach $11,013 $246 �( Huntington Beach elmont Offshore /$2,246 $892 33.0MMhbI ••• \ DOLLAR AMOUNTS IN MILLIONS _West Newport BARREL AMOUNTS IN MILLIONS ( RESERVES ) $483 17.9MMbbl as of 12/31/81 Figure 1. Oil fields in the Los Angeles-Orange County Basin. planners, you play a very significant role in guiding the "The Department of Conservation,through our Division State's locally elected officials towards conscientious of Oil and Gas, is mandated by the Public Resources decisions about local land use.What we all share as public Code to prevent damage to and waste of our employees, regardless of whether we work at the Federal, underground oil resources, and to encourage the wise State or local level, is the responsibility to serve what we development of these resources. Thus we are sincerely believe to be the public interest.Sometimes these concerned with the competition between urban growth interests conflict, and we must seek creative solutions in and oil production. But local government has the order to accommodate the variety of needs the public ultimate land use authority, and we must look to city wishes to have addressed.We are here today to seek a and county planning departments to provide for balance between the need to retain access to our petroleum continued and compatible oilfield operations. Recent resources and the need to plan for housing and other experience, however, has demonstrated that this does community development projects. not have to be a win-lose issue. An excellent model is the experience of the City of Huntington Beach, which "The old axiom, `oil is where you find it', has had contains valuable oil resources beneath a considerable particularly significant implications for California. Our area of its boundaries.As elsewhere,there is increasing State's oil production ranks fourth highest among the demand for surface uses other than oil development. 50 states,yet this production is obtained from less than And many of the problems related to urban oil one-half of one percent of the lands in California. Of production here are similar to those in other local importance to all of us today is that a large portion of jurisdictions where oil is being produced. this production is occurring from reservoirs beneath our cities. Growing demand for residential and "The City of Huntington Beach has shown that these commercial development has come into conflict with competing land use demands are not necessarily retaining adequate surface access to our underground incompatible. Subsurface petroleum resources can be oil resources.This conflict threatens a resource that not recovered safely while accommodating traditional only represents our principal source of energy, but also surface uses. Huntington Beach's experience has provides a considerable source of revenue to both State provided some valuable lessons.The City's efforts have and local governments. not only raised interesting questions, but produced 2 CITY OF HUNTINGTON BEACH, CALIFORNIA DIVISION OF OIL AND GAS creative solutions as well. The Department of and administrators. But as urban development Conservation and the City of Huntington Beach hope continues and available open space decreases, the that today's workshop can provide some guidance and pressures for that space become more and more assistance to enable you to better cope with the intense, a fact of which I am sure you are all aware. conflicts between urban demands and efficient recovery However, it is important that all of us—planners, of our oil and gas resources." administrators and regulators alike—be aware of the existence of our valuable resources and of the fact that M.G. Mefferd, State Oil and Gas Supervisor, there is a significant amount of oil left in the ground to California Division of Oil and Gas: be recovered. "Petroleum is the principal source of energy for both "One of the major responsibilities of the Division of Oil the State and the Nation. In 1980, oil supplied 65 and Gas is to make reserve estimates for all of the fields percent of California's total energy. Daily demand for in California. By a 'reserve', 1 mean that amount of oil oil in California is approximately 1.84 million barrels,of that we expect to be recovered under current economic which a little over 1 million barrels is produced in the and technological conditions. As of December 31, State.So, California's domestic oil production makes a 1981, we estimated the recoverable reserve for significant contribution to our total energy supply. California to be 5.2 billion barrels. If you were to give this oil a price of,say, $25 a barrel—putting aside for a "The Los Angeles Basin, besides being a huge moment the cost associated with getting it out of the metropolitan area, is also one of California's major ground—it would represent a resource valued at petroleum producing provinces. Oil production began approximately $130 billion. in the downtown Los Angeles area in 1893, almost 90 "To focus in on an urban area--the Los Angeles Basin years ago, and since that time oil fields have been has a recoverable reserve of 854 million barrels. Figure discovered throughout the Basin.Today,there are over 1 shows the productive limits of many of the fields in 50 active fields in the greater Los Angeles area. These the Basin along with their estimated reserves. I think fields contain 8,30Q wells that produced in excess of 83 you will find this figure interesting, for it shows that the million barrels of oil in 1980.That represents about 25 magnitude and the value of the resource is significant. percent of the State's total production. But, more importantly, I think it highlights the need for "Now the mere fact that all of this is taking place in a all of us to be aware of petroleum's potential and its huge urban complex is in itself a credit to local planners value in the State's urban areas:" LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 3 OIL PRODUCTION II I URBAN ENVIRONMENTS E.R. Wilkinson, California Division of Oil "Figure 2 shows a cutaway cross section of a geological and Gas' feature called an 'anticline'. An anticline is one of several different types of geologic traps.As oil migrates "Today, I am going to talk about petroleum geology, into a sandstone bed, it will tend to separate from the basic engineering principles and their application as saltwater which is also present in the sandstone, and related to oil, as well as how oil occurs, and how it is 'float' upward. If there is an impervious layer of rock removed from the earth. I will also discuss oil sites that over the reservoir, the oil will probably be dispersed have been designed to blend with the surrounding throughout a porous and permeable sandstone bed,but community,and,finally,I'll talk about one of the project if a geologic trap is formed, oil will collect in one areas here in Huntington Beach. portion of the bed and form a pool. Thus, the three "You may ask: 'Why do we have oil in our community?' basic requirements for entrapment are:(1)a source bed There are three conditions necessary to create an oil for the oil; (2) a granular rock in which the oil can field: (1) a source bed, (2) a reservoir bed, and (3) a collect and move; and (3) a trap. geologic trap. The currently accepted theory among "Figure 3 depicts an enlargement of the reservoir rock geologists is that oil originates in a shale stratum, the showing individual grains of sand. This rock satisfies source bed, and migrates out of the shale through the requirement for a reservoir rock because there are capillary action into a reservoir which, in California, is spaces between the grains where oil can accumulate. generally a sandstone. These beds originated as flat This property is called 'porosity'. To obtain oil or gas sedimentary deposits on a sea floor. Layers of very fine from a reservoir, the rock must have both porosity and sediment became shales, and alternated with coarser permeability. granular sediments, which became sandstones. This is a fortunate series of sediments because the shales not "Figure 3 also illustrates a typical situation where gas is only provide the source beds for the oil, but also serve present with oil that overlies salt water. The pumping as an impervious cap or seal which is necessary for the unit shown here is the most common mechanical entrapment of oil in the sandstone reservoir. device used for removing oil from the reservoir. Each SI VAL FVEL A GAS —_—_— — GAS —�— --� _ - •'•' L[ ': :�T'.•.'. M(:N'..S;1�x11i, .t tVt .c•• `I" .,y »6"g'.¢:i *`+ '.'t,.` — ----- ziCy.{1_t: ,ti:j,'„`ti, .,.;ky5a•'i}L; ..:iT�. -- -\C(\P - iL w`+',',:y�.. IT '.K,.�.'JN,' Ri%i :tiY �,•4•.l.j.:'!.— ----_ •..ti� :�� �s-.S•• �,1:�-.1:5• Y �,5,i�<..il. -- - i(Sry .fit c-Y,. Kt'fD+ ----- ;'..x.. ,4` -�5in"..P,r Li.�,s.f•, .,b�5ti;s .,.+.o, -- - — `t;i•':,L. ;ly, %l ti•...G4;; •,il t•:'�., ----_ .'` ri ,:a2. .R .,-, SF'i�` �,:'�:���'=4v� -- •y:P� =�)Il:• .i_ :�.. �a�, OIL ::,.a. ..:? r S'r�j��S. '�i{�,;�,'•r`...� ? �:>a_J�'r�a :r:�• - -s: SSs;:i. �:e:?5:f: _ ''Ei .tr. :CW.,m. — `s'V .a, r.`>.r�''''•'• a .,F ,n..:'u ^r „��� -- > ' .5.' ,Ji"a`.�Y.J .r:A�ild';t,�,i':ij�..:`' w:✓S'r�% S'S:YLa;,,,.:• ._5. r.�;:�:...• •.•'f'=.. ,l..z.�2«:r�''` .t",, _ _ '1>:. diN,�%•Sj l:•:.fiS,JS• ^):: .�i:'L7'::c.�'-; ',('.:^:•r:;ti`.'. —__ .2 -----__ ',r�_ •Yd. :rt^it �`1r53.'` .•{..�;. - rf�, �L..t',Jj,: y5:1.,']::}_•:".� •_{. ::Llrt<r-'f,. ..SS. - ,;:Y,:t e.". ------- •;�r•�•kcV'. 'i1�, ,:'l..r.i x_.5.::,,�;t'; N:a .,J. ,�i:: .,in.W. �zi5c= ii:��. :r,.\Y:�>, --r'?a;�.i.'JL'_•yyJ,' — --- ---- _rr.,y,"� ,i:S. g,>:r ":~' ------ ---------— <:, n'•S:SY.'s`iyw`as�%: SALT' a^lATE,F7 SALT .WAT[.F2• -- Figure 2. Cross-sectional view of an anticline with an oil- Figure 3. Cross-sectional view of an anticlinal geologic saturated reservoir. structure with magnified view of the sandstone reservoir. Note various types of producing methods. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 5 dissolved water gas cap gas pressure A A A L�:fi.:f[•:•...a•. i;1:;;G�7e�:K'P �,Y. :•<.;}::Y.::`:..,r r1w.:::":: •�_ - - -%3ri,'= •ia:={try` ti / .:�t.-+:�1i7y, ..7.,:r. t.. .�. .,✓r:t'e •:�'i'�i•�.'F•'�'J;....n7' ,.f r`.i'•�'Y,'-:�r. +.(:>•:• .;Y: ,.,7 .:rr., .c-�f1:: :•{j''t. Y):• <::....;t�:i<•..�. •!5',•�.�,.?.f..ii..]�y. Y��j��,•;. ;;••':s:{ r. :. :f, SERVOIR 2'2"� =�{: :� .t:+;i:,• `e� `:a :'r`•':.•:i�;r;•::: LC;i;•_::;'•'.:.•..: ::P•s: .•.t,;•,,,tiu>iy.;.. .d• _ ':r f nr. - k�:'�i4:�;r?;'..r. t, l,_ -.y..1 :rit. ibai%':s,••: s.•-p...,,...,-xC. r'Sa%..,,... .,r.. -.,, :'Y;.[;;r. �•,?Lj W.:ie. yf.._ ':7a,T :ii rd�°, ..va .�:J r.ti:Yt' `aji•7 .,A'::p:r�,•c..Y., .^::lu+.i:,;.;{`.;:e.. ,r .t05t •r,y.:r. ;��' i'''-- •r;y,,;;,.� �j: r��• �a.••;,�a ~s: .,��9•ay .Y A 4;. ��' `' „i;;,..`.::i•'�'o+E::+' �>.-��. ,tip:: OIL•RESERVOIR ' t; ;:t: .;r. r�1- r:• s'' 7; r:;};. ri ,.,, :.:.;�t. } s7�. .�e;. •�f':a7:, 2 >'4:1.'J irR., Y.,ls. ',.y;. nf..�:... 1 � 'r= :�YS.:,�? .J;iu_:.ti,:�-'i`a.:l�s'•,;i....c. •j.�'• 7<' ti, il� :d�,sy{S.^.t'iir�i: 'if"if�' :;xt; •ter:t: ;r;F'•t!=.�:�2 AISF�+�i.�7.j,•+t r,"s•�'.'*f2*�";>_:;ta;. •:��,:%r. �,,. .� OIL RESERVOIR ,13'�. ,',;,,-•,:r•• ten„ • :?N,r.ti::•,•7.,::: 1t1 3r:T 'r;?r ;,t "�:.+>' it�`41:_:�;:;, .t 7y :l,=•�.s : :.i.•+ ,Si.::: ,�•:'•.• J!i+,•?!ij:rJ:;ra ' '.•Fv 'a'�c: '':�:ii'i': iaT:i `:;:z _��.�:•S:�:.:�a�2`Y•�' � 1. '1::j,:.: y:;,,7Y-J:•'v:..t.::2' r;�,•�',•'•:�• _ $7:Y:e..,iL'Y:�Y A:�, .•WATER •...� '\. ,fit.+.. L:t�• '%�_���= -'•' 'WATER,.*,..',!: — WATER• —`� i////! — �� :.:jam/ i / �•—_ � \\ •'•// ��/ ��— \\\\�- /j /, .:":,••:::•'•::'-:':':•:•;'•:• \\\ \ Figure 4. Natural forces that move oil through a reservoir to wells. stroke of the pump literally lifts a few feet of oil up the is similar to the high pressure solution gas situation. pipe. In some instances, where the natural pressure in When reservoir pressure is lowered, the gas cap the reservoir is high enough, pumps are not necessary. expands and forces the oil into and up the well. Instead, a completion head called a 'Christmas Tree' is "in California,the Division of Oil and Gas is required to placed on the top of the well. The fluids simply flow to monitor the amount of gas and oil produced from each the surface as a result of the natural pressure within the well to ensure that oil wells are not produced with too reservoir. high a ratio of gas to oil. In other words, we don't "Even if the wells will not flow by natural pressure, want the pressure reduced in that gas cap too surface pumping units are not always necessary. quickly because such action reduces the natural driving Sometimes down-hole pumps are used which are force in the reservoir,which in turn reduces the amount driven by electricity or hydraulic power. This is more of oil that might ultimately be recovered from that expensive, but if the economics justify it, high volumes reservoir. If anything, we prefer that operators of oil can be pumped while maintaining a relatively low repressure the gas cap with produced gas and maintain surface profile. the drive in the reservoir. "What makes the oil in the reservoir move into the "Finally, Figure 4 illustrates `water drive', which is a well? Figure 4 shows the three basic reservoir `drives'. relatively common drive mechanism in many fields, The first one is the 'solution gas drive' where gas is especially older ones.There are many oil fields that do dissolved in the oil under great pressure, perhaps not have enough gas to create a gas drive situation. several thousand pounds per square inch. As soon as a However, the natural pressure of the underlying salt well penetrates the sandstone reservoir, the pressure is water pushes against the oil and moves it toward the lowered in the area immediately around the well. This well,which is the area of low pressure. Formation water provides an area of relief from the extremely high pressure is usually the result of the weight of overlying subsurface pressure, and the gas begins to expand, rocks.However, it could also be caused by a hydrostatic driving the oil into and up the well. This is known as a change in pressure, which may occur as a result of `flowing well'. gravity in instances where the reservoir beds, or strata, slope downward from a higher elevation. The pressure "The second method of moving oil to the well occurs that results from water in the reservoir rocks flowing when gas has already separated from the oil and a `gas 'downslope' in turn applies pressure to the formation cap' has formed above the oil in the reservoir(Fig. 4). water underlying the oil and causes it to move to the Gas caps help push oil out of the reservoir in a way that low pressure area in the well. 6 CITY OF HUNTINGTON BEACH, CALIFORNIA DIVISION OF OIL AND GAS OIL PRODUCER GAS INJECTORI WATER INJECTOR OIL PRODUCER SHALE 77 �-�- SIA�LE :.��R WATER Figure 5. Injecting gas into an oil reservoir to maintain Figure 6. Injecting water into u reservoir to enhance the reservoir pressure and increase the production of oil. natural water drive and improve the recovery of oil. '7hese' then, are the three natural phenomena that move oil into o well.Anything we can doto duplicate or enhance these will increase the life of the well and the field. One such method is o pressure maintenance operation where gas is injected into the top of the zone, duplicating a natural gas cap condition and helping to drive the oil to the well (Fig. 5). California has a long history of gas conservation, established by the legislature many years ago through the Gas Wastage Act.If a field produces gas with the oil, the gas can be separated from the oil and sold.Some of the gas may be used on the lease to operate equipment, or it can be reinjected to increase subsurface pressure. However,State law will not allow an operator to blow or flare gas except during temporary and very special "Another method of increasing the life of the field is 'water injection'(FiQ.f).This ieo procedure where large amounts of water are forced into the oil zone under This ou duplicates nd to varying degrees, enhances the natural water drive system. '— pl Figure 7. Contour lines showing amount and extent ot — -`--- ''-"--- -- - ---- ,—'----� --' |ondouboidenccovc, dhcVN|mingtonoU field. they help hdnf produced wate i . acceptable way. 'Furthermore, injected water— increases tendatoberotberv�couo By reducing the viacos��oil pressure in d� zoneto flush more oil out of the � reuenxoirand into the well.V�aterinjection also reduces flows more easily, making it possible for more oil to rnovefnornthereoervoirintnthewe|| The industry has the possibility of land subsidence that, under certain ' tried various ways of heating oil in the reservoir to circumstances, rnioh� be caused by extracting large volumes of fluid ~ from the reservoir without neduceitaviocoai�� replacement. "One type of thermal stimulation io accomplished when "Another form of stimulation for oil fields is achieved oil in the reservoir is ignited by pumping air under high through the use of heat. Much of the oil in California pressure into the reservoir until the oil itself begins to LAND USE PLANNING m URBAN OIL-PRODUCING AREAS 7 � 1. CRUDE OIL 2. NATURAL GAS 3. NATURAL GAS LIQUIDS (A+B) A. GAS PLANT PRODUCTS -Ethane -Propane&Butanes -Pentanes and Plant Condente `'''` .•.•••••: :eavier HydruarbNatural e ons � sa Other Products •• • Flow Treat`` •1• •• •••• B. LEASE CONDENSATE salt Water Disposal Well Disposal Tank **14* Field F-1,ty •••• • Recovered from gas wells Crude 0111 Stoo, e • by separation on leases Separaror y •• r� .��� • and in field facilities Oil Well _s ••• `_ Gas Pr«essing Plan[ • Gas �� • •• •.... ••!••• Gas Well I`Ixuon Well V • •• • Gas Weir .•r••r••......� ______ Separators •�� _— —_ —__ —_ LEGEND �\� :..'. . \\ •... / _;.i�� .CRUDE OIL .■■...NATURAL GAS LIQUIDS `';.;:• _���� NATURAL.GAS DRY GAS WATER Figure 8. Oilfield production and processing facility with typical layout and equipment. burn. This method is called 'in situ combustion', a Many prominent scientists, in addition to the Division's procedure that increases the pressure and heats the geologists and engineers,were brought in to find a way zone, thereby lowering viscosity and helping to move to halt the subsidence, which was finally accomplished the oil. As soon as the injection air is shut off, the fire by selectively injecting the producing zones with water goes out. However, this technique sometimes creates and then carefully monitoring the operation. However, mechanical problems and, as a result, is not used before the repressurization program could be extensively. implemented, a problem was encountered.There were "Steam injection is much more common and effective. many different landowners and oil operators, and the Steam is injected under high temperature and high State had to bring all of them into a single operation. pressure down the well. The superheated steam goes This is called 'unitization' or forming a 'unit'.The legal gut into the reservoir in all directions, heating the oil problems of getting the different parties to join this unit end making it flow more easily. In some cases, this and to decide on what their fair share of the produced method has increased production over 300 percent. oil would be became very complicated. However, the 'This technique is costly though, because the process field was finally unitized using the compulsory requires large amounts of energy to create steam, unitization law set forth in the Subsidence Abatement which is then used to extract another energy source.An Act. The Wilmington unit is the world's largest water engineer has to examine each project closely to ensure injection program and was probably the world's most that more energy is produced than expended. One difficult operation to unitize, but subsidence has been important point to consider when evaluating steam halted. injection projects from a land use planning perspective "Incidentally, I should tell you that we have not noted is that high-pressure, high-temperature steam lines subsidence of the magnitude that occurred at should be separated from other land uses that might Wilmington in any other oil field in the State,and most place people in close proximity to these potentially fields have no subsidence at all. I don't want you to hazardous steam lines. think that simply because there is an oil field in your "Land subsidence is a potential problem that might area, subsidence will necessarily occur. One reason occur in areas overlying an oil field.Figure 7 shows the subsidence has not been a problem elsewhere is Wilmington oil field where, over a period of years, the because most operators are injecting water back land slowly subsided until the epicenter finally reached into the reservoirs. Also, rock strata in the Wilmington a depth of almost 30 feet below its original elevation. field include what geologists call'incompetent'bedding You can imagine the problems this caused in the Long or formations. The beds form a relatively low, Beach Harbor area.During high tide,wharves and piers somewhat flexible arch, and do not really support were awash or actually submerged. To mitigate this themselves very well.When fluid was removed from the situation, the State legislature enacted the Subsidence reservoir, compaction occurred, allowing the overlying Abatement Act which is administered by our Division. beds to subside.Fields comprised of strongly arched, 8 CITY OF HUNTINGTON BEACH,; CALIFORNIA DIVISION OF OIL AND GAS i Photo 1.Urban oil production site on a golf course.Note covered Photo 2. Urban drill site on Long Beach Recreation Park golf well cellars with wellheads below ground level. course, hidden on three sides by landscaped terrain. firmly bedded strata tend to resist the effects of "Photo 5 shows one of the four offshore oil islands near compaction and downwarping. Long Beach.This is an example of a large,consolidated "Figure 8 shows the types of equipment that may be oilfield operation. One island can accommodate as required at an oil production site.This includes not only many as 200 wells and four drilling rigs. All of the wells and pumps, but storage and treatment tanks, as Production facilities and processing equipment are on well as equipment to separate the water,oil,and gas.In the island. A great deal has been learned about addition, the water produced in association with the centralized drilling locations from this type of oil must be either injected back into the reservoir or operation. The area is also a good example of multiple transported elsewhere for disposal. Temporary storage land use. In the immediate vicinity, there is a of the oil must be provided unless both oil and pro- recreational beach, and a harbor that includes duced gas are transported to a central facility, usually recreational, industrial,and commercial uses,as well as by pipeline. The following photos of existing oil op- the oil drilling and producing operations. This, of eration sites in urban areas illustrate how facilities can course, is the result of extensive planning by the City, be concentrated, and also how they can be made to the State,and the oil industry. blend compatibly with their surroundings. "Photo 6 shows one of the latest urban oil sites,which is "Photo 1 is a site on a golf course in West Los Angeles located in the Torrance area. The site has been graded about 15 feet below ground level and is surrounded by which shows the concentrated nature of a production an earthen berm with a block wall on top.The net effect operation. The wells are drilled six feet apart, and the is to lower the entire operation several feet, thereby wellheads are below the surface of the ground. This allows the site to be well landscaped and hidden. People on the golf course are generally unaware of the operation. Note the large amount of equipment that can be concentrated into a small area. Photo 2 is a site r' on a City golf course in Long Beach. From three sides the site appears to be a gently sloping hill or landscaped berm, but behind that berm is a well-hidden oil operation. Photo 3 shows a different treatment. This is r Occidental's site on West Pico Boulevard in West Los Angeles. The structure is not as well designed from a camouflage standpoint as it might have been, partly ' because of the exposed guy wires. However, people passing by are totally unaware of the oil operation.This is a very quiet and unobtrusive type of operation. Photo 4 is a street view of Chevron's Packard drill site in Los Angeles. Besides being well designed for visual compatibility with the surrounding area, it is virtually soundproof. Even when two workover rigs are Photo 3. Occidental Petroleum's urban drill site in West Los operating inside the building at the same time, none of Angeles.The single derrick is housed in the tall,building-like struc- the sounds of the operation can be heard outside of the ture. building. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 9 providing sound deadening as well as creating an attractively landscaped barrier around the site. Although it has been demonstrated that oil drilling and production operations can be conducted in a safe and compatible manner, local government must be aware of the potential for problems when other types of surface development are proposed for areas within the boundaries of oil fields. Until comparatively recent times, oil fields were either in rural areas or, in urban areas,were isolated from other forms of development.However,during the last several years, many urban oil fields have been subjected to intense residential and industrial encroachment. The possibility of placing a permanent structure over an abandoned or inadequately abandoned well increases as the density of development increases. "Earlier wells were abandoned to specifications established for oil fields located in rural areas. The Photo 4.Chevron Oil Company's drill site in West Los Angeles.The possibility that any form of urban development would Packard drill site can accommodate two drilling units at the same occur in an oil field was considered highly unlikely. In time. addition, many wells in our older fields, drilled prior to 1915, were not regulated by State law. As a result, records of exact well location or mechanical condition may be sketchy or inaccurate. On the other hand, records of wells drilled since 1915 are maintained by our Division, and should provide sufficient information to evaluate the current condition of any well that may be in an area proposed for surface development. "We urgently request that any planning or building � permit issuing department contact the nearest district office of the Division of Oil and Gas whenever a land use other than oil or gas operations is proposed within the boundaries of an oil field. Our Division also encourages local government to place well locations on their land use and zoning maps so that permit issuing personnel will be alerted to the presence of a well, or Photo 5. THUMS drilling island "Grissom" is one of four such wells,within a proposed development. islands in Long Beach Harbor. More than 200 wells have been drilled from this site.Landscaping and beautification costs exceed- ed $1 000000 well under archaic standards cannot be required to reabandon that well unless it is leaking or presents an p obvious hazard. However, through the building permit process, local governments can, if recommended by the Division of Oil and Gas, require that a well be reabandoned to the current State standard before any ,r permanent structure is placed over or near it. As an � z example, the City of Signal Hill works closely with the 1 Division to ensure that old wells are plugged to current (j t Division standards. When buildings will be placed over a well, a cellar around the wellhead is excavated and gravel is placed in the cellar and covered by an 1 impervious membrane which is then covered by cement. A perforated section of polyvinyl chloride a (P.V.C.) pipe is placed in the gravel to vent any gases that may leak from the well beneath the building to a 4 point outside. Ideally, no building should be constructed over any well. City and county planning Photo 6. Urban drill site in City of Torrance. The location was and building departments must be aware of such situa- designed for simultaneous drilling by two rigs.The site is 15 feet tions, because our Division has no way of knowing below ground level and surrounded by a high landscaped earthen when a building may be placed over a well unless it is berm topped by a wall. brought to our attention. 10 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS } f ✓ 1' 4 Photo 7.Street view of ARCO Oil Company's St.James production Photo 8. Interior view of the St. James production site. All site within a residential area in Los Angeles. wellheads are below ground level,and covered. "In addition to proper well abandonment, correct oil feet of dirt over whatever was in the sump. If the oil is sump abandonment is important and of concern to the buried too deeply, the bacteria stop working and State. Today, chances of improper sump abandonment further alteration of the oil is halted. However, if the oil are slight. There was a time, however, when an oilfield can be exposed to oxygen, bacteria will consume it and sump was abandoned by simply throwing two or three clean, nitrogen-rich soil will be left. ____—__ �i ,�i�:�,."•ctr..;�Y,�g� :� .x. � 4#!!%. �i .:-�,•".,'„s;. .ram_ ---J 71 f�-p'.: �ti's,3"; j'.y,�..•1 'Y'?,�ate .g±' =.' `�µ, .","L`5 ,. 'r"c'-t '�' r�'af"➢,C- T`�" i�a+ ,�` q J �+ �'b '°Y 'F .E�y Y. ,'�� `ryp+�. ..s: � 'V,s G,Y•-�,��;�r.L�.'k.' �,' a'U'�ti>•� ,. ,6,z S,y,��,'' 4,y,� ! - ..t +' a-r� t,{L ,y.*'t.�} �w q 't;.+,�a�•„ - "r"� t rN' 8 -� 4\� � :t .}. h rh R y� ? ryt r'.Y� Y "V. • ��s, k� *� �.,f„•-> > fix' c'�¢ ri,h r� � ��-``, 3��` �.Y ti*.i Zr ,�ir^x'Pa� , ra ' au y.' .E� •}}„`F,N - �.,b } �$�'• F^�""�r '�"',�i 3 t�';wq`'E"^'a�3' '4r'"'S"�'� p`Y,t��d,� �i� r'�r=3';-�i� ,'.`'-';�a`�''yketikn�� �`,�a'�'�+sv,�.sty"•, ..`'i�-„.'� ;�i .i�i�„�'roz'` py 5 e#'`�''.',i;.a�+�,•x:^.s.�'.r a"� <,4;fi, r.+,('gas".1 .a;.,?�, ,�rx:�.��n.: �p;. .,»,:4'���a�: •,z '' , a #, uFd:s/f ur`�i'u` ec"�xhtit a 'i"��„7- k.k'^a'"i rt •)'Srt4 -a '4' It 5.;'�„w p',: vr-s,;w�+y.-�'$x,! :'�f'+�a' �rRa�,.0 �✓Fs 3 a ,A' Y "r+ � '.g 'z*,��3�s+u r� k �,xi'l`�. ��'ne';��i' 4k•=�` w,�-w .nxr'�,`�'� `°`k�°°�✓•f, s�"uz, t'y'^�e�'�ee�:a,�r,4r '��**��, .a �,. ,� h a Y.� ��7 sad m,,���z`�a' �tY, "`.�":t�' `'J�" •;ti "% o,y � .'i')'` -?c..',-r. 5.'tlis+r .+,�+e"e s h' f f? '4 y2 Figure 9.Three-dimensional view of a directional drilling operation from two centralized drill sites within the Huntington Beach project area. The area overlies two productive oil zones. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 1 1 "There is an example of good sump abandonment in available at locations that will provide access to all the City of Santa Fe Springs. The sump was large— subsurface areas capable of producing oil. In this probably a couple of hundred feet square—and quite project area example, there are two oil zones deep. The contaminated material was excavated, underlying the property. Unfortunately,the upper zone spread out, and dehydrated. After bacteria reduced the is shallow, and one of the problems encountered with oil, the material was put back into the sump and shallow zones is that the areal, or horizontal, reach of compacted to engineering standards. It was an directional drilling from one site is limited. The deeper excellent job, and also resulted in restoring the site to a the zone,the greater the distance around a drill site that usable land area. The alternative is to remove the can be reached. In this case, if it were not for that material, take it to a Class I dump site, and bring in shallow zone, access to oil under the entire project area clean fill. However, this is expensive and can be a very could possibly have been preserved with one drilling messy operation if the sump is large. island. As it is, at least two centralized drill sites are "Figure 9 depicts a simplified underground view of an needed to reach all of the oil. The surface locations of area that will be discussed later in more detail in Case the islands in the project area are flexible to some Study #2. This is a large parcel in central Huntington degree, which allows planners to take other land use Beach, currently the site of scattered oil operations. and planning constraints into consideration. The area will soon be developed for residential use, but "It is absolutely essential that surface access to urban the Citywants to reserve access to the underlying P Y 9 p oil fields be retained. Oil is one of our most valuable petroleum resource. The most logical way to do this is to consolidate operations into oil `islands' from which resources. Other types of development that would be directional drilling can take place. The term `islands' incompatible with continued oilfield operations should not refers to relatively small areas,usually one to five acres, allowed to occur within existing oilfield that are screened, landscaped, and buffered from other goverboundaries. It is essential that the State, local surrounding uses and that are used for consolidating a hesenproblems.t Whe ithil'thestrdrillinktandd producing ing large number of wells and related facilities. P g P g technology available today, innovative planning by "Before access sites or islands can be established, it is local government, and the cooperation of all parties necessary to study the underlying geology and the oil involved,the production of oil can indeed be continued reservoirs, in particular, so that sites will be made compatibly with other land uses." DISCUSSION QUESTION: all the high-pressure lines are contained inside a walled What would you say is a safe distance between steam enclosure,residential uses can be safely located nearby. operations and a residential development project? Steam operations can occur safely even in an urban context with proper planning and mitigations. We are COMMENTS: currently working with an oil company on this type of project for downtown Huntington Beach. Jose Osuna, City of Long Beach: The Uniform Fire Code states that a residential structure cannot be built QUESTION: within 100 feet, or a meeting hall or school within 300 feet, of an existing well. These distances are Is steam injection something that is going to be more recommended whether the well is involved with steam common in the future? operations or not. Wilkinson: Steam does not pose the same threat that COMMENTS: fire does, so we look at the safety factor from another Wilkinson: Generally, yes. Unfortunately, however, it viewpoint. Even though steam lines are insulated, they doesn't work for every field. As a rule of thumb, steam are hot and under pressure. There is always the injection works best in a zone that is less than 4,000 possibility that a steam leak could occur, and at those feet deep with a 15 or 20 foot thickness of oil sand and pressures it could be quite dangerous. Therefore, all a gravity of around 14 degrees, although higher gravity access should be controlled. However, a steam oil is now being steamed with considerable success. generator can be installed so that the steam plant and Steaming works well in places with characteristics like all high-temperature, high-pressure lines are enclosed these. However, because conditions differ in each zone, within a central production site. different methods will have to be applied for different Multari: I'd like to reiterate that point. In cases where an situations. As a result, a variety of enhanced recovery open field exists with steam lines on the surface, other processes will become increasingly popular. kinds of development should, of course, be prohibited As it is now, we're lucky if primary pumping recovers until the lines are deeply buried,enclosed,or fenced.In 30 percent of the oil in place. This means that a very Huntington Beach, the steam operations are large percentage of the oil is still in the reservoirs of all consolidated and enclosed in islands and separated our fields, and this is a tempting target.Each enhanced from all other uses by walls and buffer areas. Because recovery method retrieves a little more oil. For 12 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS instance, waterflooding might pick up another ten producing well to an injection well. Although you can percent, and then a more sophisticated method would return an injection well to production,the injected zone need to be applied.This fact is keeping a lot of research would be saturated with injection water.The Division of departments busy trying to develop systems that will Oil and Gas must review all proposals in considerable flush out a greater percentage of the oil. geologic and mechanical detail prior to approving injection, and extensive requirements and conditions Bud Tippens, American Petrofina: I would like to say are established at that time. that Aminoil USA an evron USA are putting a tremendous amount of money into testing a down-hole QUESTION: steam generator. For steam operations in urban areas, this is the true answer. At American Petrofina, this is You showed several pictures of different kinds of what we are looking at down the road.Once all the bugs drilling rig enclosures.Could you give me a price range for this type of equipment? are out of the system, it will be the best way to steamflood the fields in urban environments. COMMENT: Wilkinson: The underlying factor, of course, is Chevron USA:Chevron USA is building aig economics. Down-hole generators are expensive, but rig enclosure on the Paxton drill site off the Golden n Walker, you have to spend money to make money.A down-hole a r steam generator could make a big difference in the State Freeway in the San Fernando Valley. Our cost to development of oil resources in urban areas. date—and we haven't even spudded yet—is 30 million dollars. We anticipate drilling 26 wells, and we have a Bill Sheffield, Aminoil USA: I would like to make one block wall around the perimeter of the site.I don't know comment: you shouldn't expect the development of a what the final cost will be—with inflation it could sky- commercial down-hole steam generator next week! rocket.The drilling rigs will look like mission-style bell Downhole generators are still a long way off, but the towers. As drilling occurs, they will be moved from idea is a good one. drillsite to drillsite. Furthermore, the rigs are triple insulated, so nothing will be heard. QUESTION: Are injection wells normally former producing wells QUESTION: and, if so, are there either regulatory or practical What kind of sound-deadening equipment can be put limitations to converting them back to producing on a portable drilling rig? wells? COMMENT: COMMENT: Multari: In some cases in Huntington Beach, Wilkinson: Normally, injection wells are former soundproofing is not put on the rig itself. Instead, producing wells. Occasionally, a well is drilled for wooden poles are placed around the site and beams are injection purposes only, but in most cases it is a strung between them on which acoustical material is relatively minor mechanical change to convert a hung. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 13 J PLANNING COALS AND APPROACHES Michael Multari, Planner, City of Huntington extracted once the economics and technology make it Beach: feasible. We will be analyzing this further in the case studies.Related to protecting access,we are also trying "I would like to discuss the principal goals that the City to allow for new and expanded oil facilities, as of Huntington Beach is trying to achieve through its necessary, in appropriate locations. This requires land planning efforts for oil production areas,and some careful advance planning. of the approaches we have used to implement those "We are trying to promote the unitization of oil fields goals. where ownership of the mineral rights is highly "Most of the City's planning goals are articulated fragmented. This means parties with an interest in the through policies in the General Plan and our Coastal field have to join together as a unit before consolidation Plan. First of all we are trying to accommodate mixed strategies can effectively be implemented. Again, we uses in the City. We want to continue to accommodate will discuss this issue in the case studies. oil as well as other urban uses, particularly residential "Finally,another goal of the City is to increase the fiscal and commercial development. We feel, of course, that benefits it receives from continued oil production. this is a fuller and more efficient use of our land.But we Although the City does provide some costly services for are always careful in ordinances,codes,and planning to oil operations, just as it does for any business or make sure that public health and safety are protected industry, it also derives significant revenues from before permitting such mixed use development. various taxes and fees on these activities. Further, as our oil fields are recycling to new uses, we are trying to encourage comprehensive planning of "I would also like to list the planning and regulatory large parcels of land rather than piecemeal tools that we are using in Huntington Beach to achieve development. This is sometimes difficult to do when these goals. I don't think this list of approaches is ownership is fragmented. exhaustive;these are simply the ones with which we are "We are also trying to consolidate oil facilities to reduce most familiar. the land area used for oil production.Consolidation is a "First is the General Plan, which sets out the general theme that is going to recur through all the case policies and land uses for the City. Included in our land studies. The advantages of consolidation are: 1) the use element is a resource production designation which freeing of more land for other uses; 2) reduction of the sets aside certain parts of the City for oil extraction. interface between oil activities and other land uses, "Of course,we use zoning,too.In Huntington Beach we thereby making the potentially adverse impacts from have two zoning suffixes that allow oil facilities. The oil easier to mitigate; and 3)the opportunity for greater first suffix district allows existing wells and attendant buffers and separations between oil and other uses. facilities, such as tanks, as well as the reworking or This last benefit is best achieved in cases where the oil redrilling of existing wells. This suffix is applied to facilities are consolidated into small islands and the most of the old oilfield areas, and allows the existing residential uses are concentrated through techniques operations to continue while they gradually`recycle' as like clustering. This leaves more open space for buffer production declines and the surface value increases. zones and transition areas between the two uses. New wells, however, are only allowed in the second "Another thing we are trying to achieve is increased suffix district. This district includes a much smaller compatibility between oil and other uses. There are portion of City;it is applied primarily to relatively small many ways to do this, such as requiring screening, sites of one to three acres, which are distributed landscaping, and soundproofing of operations. Wilky approximately one for every 20 to 40 acres over the oil- discussed several of these techniques earlier, and field surface. This has the effect of concentrating new others will be illustrated in the case studies. wells into these smaller sites, freeing the areas in "We are also trying to preserve surface access to between for new uses, and still affording access to the underground oil reserves. Oil is an important natural subsurface resource. resource, and we feel it is important to preserve "Huntington Beach is a coastal city, so we have a Local adequate surface areas so that residual oil can be Coastal Plan in addition to our General Plan and LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 15 zoning. Because the California Coastal Act puts a high the City has set with regard to oil operations. These priority on continued energy production, our Local standards are used for evaluating permit applications. Coastal Plan has been an important medium through which goals and policies related to oilfield planning "Finally, as an alternative to regulatory solutions, we have been articulated. have tried to solve some of the incompatibility "Another approach that we are using increasingly in Problems that we face in a voluntary manner by implementing cooperative strategies with the private Huntington Beach is the specific plan. Through sector. We have had encouraging, if somewhat mixed, traditional zoning, a class of uses is identified and "esults with this method that will be discussed again designated as appropriate to various locations. For later. example,certain kinds of commercial uses are typically found to be appropriate along all larger arterials. But a "As I said before, there are numerous other strategies specific plan uses a site-by-site,block-by-block analysis which could be useful in planning or regulating oil of the peculiarities of a particular area. Regulations are production in urban contexts.Transfer of development written especially for each individual area. rights strategies and redevelopment law come to mind. "Besides planning and zoning, we also require special We are always looking for better and more creative permits for oil operations. For example, no well in the ways to promote equitable and efficient land planning. City can be drilled, redrilled, or reworked without a Maybe some of these approaches will be explored special permit. The permit application is reviewed by further today. our Fire, Public Works, and Planning Departments. "What we would like to do for the rest of the day is Each of these departments has certain responsibilities present three case studies of situations here in in regard to land use,noise,and safety.With input from Huntington Beach, which we think illustrate issues that the Division of Oil and Gas and industry other jurisdictions are facing or may soon face. As I representatives, we have developed an oil code and said earlier, solutions to every problem encountered noise ordinance which state the performance standards have not yet been found:" 7 16 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS CASE STUDY #1 COIL FACILITIES III A DEVELOPED AREA Michael Multari: Huntington Beach is a city of about and commercial uses.We are also concerned about the 170,000 people in the Los Angeles/Orange County effects existing oil operations may have on metropolitan region.Although its early history was that reinvestment strategies for revitalizing the downtown of oilfield development, it was among the fastest area. The oil operations, as they now exist, have two growing cities in the United States during the 1960's. adverse effects on revitalization. First, because oil The rapid residential and commercial growth during operations can be unattractive, noisy, and odoriferous, the last two decades encroached into the open oil fields, the area is under-valued,thus discouraging investment. resulting 'n numerous conflicts between the oil Secondly, because many of the lots are encumbered by operations and the newer urban uses. oil and often have different lessors and lessees, they Let, me describe our downtown area. Main Street, have become highly fragmented,making it very hard to which is the focal point of the downtown, extends consolidate a piece of land large enough to allow for perpendicularly to the shoreline and ends at the foot of construction of a high quality development. In many a long municipal pier. Commercial uses flank both cases,an oil encumbrance on a small lot has kept a full sides of the street, which are in turn surrounded by block or half block from being consolidated for new medium-density residential areas. There are large development. parcels of land very close to Main Street that are not In the short term, our approach to solving the problem developed because they are within an active oil field. of incompatibility was to revise our oil code and our Mixed uses have occurred in the area, often with zoning ordinances to reduce noise and odor problems undesirable consequences. For example, there are and to mitigate adverse visual impacts. For example, pumping units in backyards and next to commercial our oil code was changed to require that all oil facilities establishments, and tank farms in alleys. in the City be landscaped and screened within two We know, however, that these problems can be years.We also revised our noise ordinance, making the avoided, and that compatibility between oil and other hours of operation more restrictive and giving our oil activities can be increased if we do careful, advance inspectors more latitude in requiring soundproofing. planning. Figure 10 is an example of how oil and Further, we changed our zoning districts so that there residential uses can exist compatibly. This is a map of would be a minimum lot size required before a new well an actual residential development here in the City, not could be drilled. This should prevent the creation of very far from the ocean.Oil islands are surrounded by a more situations like those that presently exist in the pleasant residential area,which includes a country club downtown area with oil and residential uses being too and a golf course. At street level, the oil islands are near each other. relatively unobtrusive.It is interesting to note,as shown In the long term, our approach is to e►►wurage unitiza- in Figure 10, that this development is adjacent to a tion and consolidation, while preserving access to the resource production area that is the most highly underground reserves.I would like to spend some time concentrated oil site in the City. About 300 wells are discussing this long term approach,beginning with the located on this strip, along with tanks, steam question of preserving access. Why should planners generators, water injection pumps, separation plants, worry about access?The reason is that there is a lot of and drilling rigs. The residential area is buffered from oil still existing in the fields. Primary production—the these highly concentrated operations by a wide street, oil extracted using only natural reservoir pressure and setbacks, a small berm, and some vegetation. While simple pumping—typically accounts for only about 20 this area still has some problems due to the or 30 percent of the oil in a reservoir. Application of proximity of oil, it is a useful model of how both uses secondary recovery techniques—waterflooding or can be accommodated. steam injection, for example—allows production of One of the major goals we have for our downtown area perhaps another 15 percent of the potential resource. is to try to improve the compatibility between existing There are now other technologies that are being applied oil operations and existing and proposed residential after the waterflooding, such as chemical floods,to get LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 17 ti C ................. ti OIL ISLANDS �," U) P VA PI,ANNID FOR CANT RESIDENTIAL G� INTENSIVE OIL PRODUCTION OPERATIONS PACIFIC COAST HIGHWAY Figure 10. A schematic depiction of a residential area in proximity to oil operations. Oil islands are surrounded by homes and a golf course.Adjacent to the south is the most hignly concentrated oil-operation site in Huntington Beach. 18 CITY OF HUNTINGTON BEACH, CALIFORNIA DIVISION OF OIL AND GAS = injection well Figure 11.More than half the oil in the reservoir remains untapped even after all presently(mown technologies are employed.This oil = production well may one day be recoverable with technolooies yet to be developed. Figure 13.Top view of a typical pattern of production and in- jection wells. I should note that this is hardly only a local concern—it is of state-wide and perhaps even national importance. We are worried about the possibility that in places like our downtown, there will be rapid recycling of the oil sites and in filling of the remaining vacant land with new development to the point that there will be so much of the surface area covered that it will be imprac- tical for an oil company to come in and extract the water * resource when it becomes technologically possible to do so. If the land is built over, access to the underlying oil reserves could only be gained by razing houses or com- mercial establishments. Clearly, this would add enor mously to the price of extracting that oil. You can also imagine,I am sure,the kind of tumult that would result in an established residential area if an oil company came in and wanted a block of houses torn down so that an oil island could be created. We are trying to do some advance planning so that people will know oil ex ists in the area, that it is likely to be extracted in the future, and that access is going to be preserved now for Figure 12.Pressurized water from the injection well rorces oil that possibility. toward the producing wells. One of the ways to preserve access might be to designate a few carefully located areas as "islands" on still more oil out. Research continues on development which the necessary oil facilities could be concentrated. of new technologies. Figure 11 illustrates that more This approach would have the added benefit of siting than half the oil remains in the ground even after all the wells and equipment in a few locations, thereby practical known technologies are employed. What we realizing the advantages of consolidation discussed are concerned about is preserving access to a signifi- earlier. cant reservoir of domestic oil that will someday be If the application of enhanced recovery technologies recoverable with technologies that have yet to be and the consolidation of oil operations into islands is so developed. beneficial, why hasn't it happened yet in downtown LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 19 Huntington Beach? Figures 12 and 13 are helpful in and the large area of concentrated oil operations. The answering this question. Figure 12 is an example of a new wells and related facilities of the unit can be con- typical waterflood pattern, and it applies to many other centrated into a few locations. Thus, the interface be- enhanced recovery technologies,too.A pattern of wells tween oil operations and other uses is minimized, is established and water is forced through the injection which makes it easier to mitigate problems.Also, it is a wells to drive the oil toward the producing wells which lot less expensive to landscape, berm, and soundproof pump.out the oil-water mixture. Figure 13 shows a top one oil island that holds perhaps 20 or 30 wells than it view of what this subsurface pattern of injection and would be to similarly treat 20 or 30 individual well sites. producing wells looks like.Obviously,these techniques Another important factor is related to the fact that the cannot be implemented on a well-by-well basis; they application of secondary and tertiary recovery tech- must be done on a pool-wide basis.The problem in our ni ues from concentrated facilities produces a lot more downtown area is that the oil pool is not under the q ownership of just one company or person. Ownership oil. The resulting increases in profits mean that some of the pool is fragmented among many parties. For of the more expensive mitigation measures that might enhanced recovery to occur, all parties must get be out of the question for a small operator can be im- together and agree to participate so that these methods Plemented. For example, our recent code revisions re can be employed. This is called "unitization". quire operators to screen and landscape their facilities at a cost of roughly $2,000 per site, and several small There are a lot of difficulties associated with putting a operators thought this was a severe economic hardship. 'f you have one unit working on an entire pool,this unit together;chief among them is the"free rider prob But� y g p > lem". This occurs when one party tries to enjoy the kind of expense is certainly not going to be an benefits of unitization without actually joining the unit. economic hardship and could be done quickly. The For example,suppose the owner of a well realizes that if same is true of soundproofing; sometimes the sound- everybody else will bear the costs of drilling injection proofing that might be required on an individual site is wells and putting fluid down into the pool, oil will be too expensive for a single operator to install. With a pushed out in the direction of his well regardless of unit, such soundproofing would be economically whether he joins the unit. Production from this well possible. may increase, but the operator has not paid for any of Another advantage of unitization,and one that is of par- the new equipment or wells. ticular interest to local government, is that significant Sometimes so many people hold out as free riders that fiscal benefits are recognized from this kind of situa- the unit cannot be put together. This makes it risky for tion.We have done a fiscal impact analysis of oil opera- a company to try to start a unit project. It is costly to in- tions in Huntington Beach.* The City receives revenues itiate a unitization project, lease the required mineral rights, promote interested investment companies, and $1000's .„... ESTIMATED EXPENDITURES do the necessary geologic studies. In an area like our downtown, there are about 30 oil companies that ESTIMATED REVENUES operate roughly 100 wells, and the actual mineral in- so terests are owned by about 2,000 different parties. So to put together a unit, you would have to unitize those 2,000 leases plus those 30 working companies.Clearly, 40 this is a substantial task. .... ................................................. Also, many people may want to hold out just because they think they will get a better deal.Their thinking will so be,"There are 30 of us here who have to join the unit to make the project work, and maybe if I wait to be the 20 30th party, compensation for my participation will be a little bit greater:'Obviously, if everyone is thinking this way,a unit cannot be put together. 10 Another situation might involve a small oil company that feels it may not get a good deal out of unitization. Sometimes the reason for not joining is the pride of ownership in having an independent oil company that is I9ao sl ez es e4 es as e� ea e9 90 not subsumed into a unit with a major oil corporation. (1979 dollars) Clearly, there are a lot of reasons why units can be dif- ficult to assemble. Yet, there are several benefits that Figure 14. Relationship between net City expenditures and can come from a unit project. I have already mentioned revenues from non-unitized oil operations. Revenues, which that production can be increased by implementation of are tied to production, are decreasing while costs are rising enhanced recovery technologies, and that oil facilities slightly above inflation.(Expenditures were estimated using a can be consolidated. Reference back to Figure 10 will weighted average model). remind you of this. It is the area we were talking about *"Energy Series Report 02:Fiscal Impacts of Oil Operations in Hunt- before—the residential oil islands and the golf course ington Beach".Huntington Beach Planning Division,1981. 20 CITY OF HUNTINGTON BEACH, CALIFORNIA DIVISION OF OIL AND GAS from an oil production fee,property taxes,drilling fees, we first asked the question, "is there enough oil to and utility taxes.We looked at the revenues and expen- worry about?" Using data from the Division of Oil and ditures that we are incurring now and projected them Gas and from some of the oil companies in the City,we out over the next decade. It was important to note the estimated that about 25 million additional barrels of oil significant difference in revenues generated by oil could be recovered from the area. This is a significant operations with and without unitization. Figure 14 amount of oil.We then asked, "If we are really concern- shows the fiscal picture in the downtown area if unitiza- ed about preserving access to oil in the downtown,how tion does not occur. The expenditure line reflects the many sites will we need to do this, how big will they amount of money the City is spending for the provision have to be, and where should they be located?" Figure of services to these operations. You can see that costs 16 shows the existing drill sites in the area. We con- are going up slightly above inflation while revenues, sulted with a drilling company and,using their informa- which are tied to production, are slowing down and tion and other data regarding the depth of the various dropping in constant dollars. oil pools, estimated the areal extent, or reach, of direc- tionally drilled wells from these existing sites.This is il- Figure 15 illustrates the fiscal picture for the same area lustrated in Figure 17.It shows that most of the oil zone under a unit operation. The revenues have gone up could be covered from the existing drill sites if they dramatically and the costs have declined slightly. were available and if all the wells could fit on them. Us- Revenues are largely tied to production: as more oil is ing data on typical waterfloods and steam projects, we produced, more revenue is generated. Costs are tied also estimated the number of wells that would be need- largely to the number of operators and sites, and the ed. With a little more research, we learned that many land area occupied. For example, if you have 100 com- wells can be drilled in a small area—on the order of 20 panies,you have to bill them for certain services.That's to 50 on a two-acre site.Therefore,only a very few sites 100 bills that must be prepared.But if you had one unit, would be needed to accommodate all the wells involved you would only have to write one bill. So your cost of in a unit project. providing services is less,yet revenues have gone up. We concluded that if we could preserve the existing drill When we began considering ways to promote a unitiza- sites,we could accommodate a future unit project.Our tion and consolidation program for our downtown area, City Council then appointed an Oil Committee to deal with this issue.The kinds of options that the Committee looked at were zoning, General Plan designations, and $1000's conditional use permits. For example, drill sites could ESTIMATED REVENUES be zoned so that no other uses except oil operations would be allowed there. A General Plan designation ..... ESTIMATED EXPENDITURES could be applied to the islands, making them resource 140 production areas.Before other uses would be allowed,a General Plan amendment would have to be filed and an assessment of the site for future access could be a con- 120 dition of approval. If the site were important to future access,the amendment would be denied. The option to require a conditional use permit would likewise involve 100 a permit review before other uses could be introduced. The Committee also looked at City-owned property in the area, thinking that if no other method effectively 80 preserved access, the City could lease its own land for future oil production. The Committee even considered 60 the feasibility of creating offshore islands like those in Long Beach to directionally drill back into the onshore pool. 40 While we were analyzing these options and the Oil .....••••.........�•�•�� •. »••••............. Committee was wrestling with what it would recom- mend to the City Council, an oil company indicated 20 that it wanted to put a unit together in the downtown area. Suddenly, the problem changed from the theoretical issue of preserving access for the future to the reality of trying to find sites for this particular oil 1980 81 82 83 84 85 86 87 88 89 90 company. The City is presently working with the oil (1979 dollars) company in question, trying to determine whether ex- Figure 15. Estimated fiscal impact from unitization of isting sites or other additional sites are going to be downtown Huntington Beach oil field. Revenues to the City suitable for the project. We are also working on refine- rise dramatically because oil production is greatly increased ment of our zoning to allow the unit to take place, and under a unit project. (Expenditures were estimated using a mitigation requirements regarding noise, design, land- weighted average model). scaping and odors. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 21 A -- i J L.l I � LiLi iE � E: i Li i TB ��� I i i [ILI CL -EXXXI)EXIIII MUML UD EUD M Pi jj MPE Pi Pi EE E� M Ej 111i1 JD Eli �l � s � ,] Dj I.LIMD, rM r rUE �IJLIJ ,, I LJlp � . JM JJED ED ------------------- I '., �. LL ❑ L, 1� ---------------- ------- m cn a I []❑ = L� 0 ` ,ao0� 0 LJEI LIE] ❑ �❑ ❑ ❑ 00 � 0� o ❑ ❑ ❑ ❑ ❑E-1 � OOC 7717 0 C-- ❑ C ❑ ❑ or❑ ❑ o ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ = = 0❑ oo �❑ ❑ ❑ o r ❑ ❑ a ❑ a ❑ c� ❑ ❑ o ❑ ❑ ❑ ❑ E7=1 ❑ ❑ ❑ ❑ cam ❑ ❑ ❑ ❑ O 0 � ❑ �❑ o � DODO' Ll= 0 0 00 ❑ ❑ r❑ �O `dry*O _ ❑T❑ L E7=1 C❑ 0 0. Livz:=TV O D� 1 Figure 17. Directional drilling allows a large subsurface area to be tapped from a central site. This figure depicts the approximate areal extent of directional drilling from existing drill sites in downtown Huntington Beach. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 23 An interesting footnote to this story is that the City City Council felt that this put the City in the driver's seat itself owns the mineral rights on about 125 lots in the in terms of demanding a royalty interest higher than downtown. When the oil company proposed the unit that of other parties. This was resolved after several project, the City's position changed from that of look- months of negotiation, but the point is that even the ing at a long term solution to consolidation and access City, which ostensibly takes a broader view of the com- problems, to that of being a potential mineral rights munity interest, saw the money that was involved and lessor trying to get the best deal for its properties. Peo- was tempted to hold out. As I mentioned earlier, hold ple were looking to the City for guidance as to whether outs are a problem that can block the formation of unit they should join the unit, and some members of the projects. DISCUSSION QUESTION: QUESTION: Do existing wells in the area where the consolidated oil Is it fair to say that existing State law focuses more on sites are located have a different status after consolida- new wells and their distances to structures than the tion? proximity of new structures to existina wells? COMMENT: COMMENTS: Multari: They could, but in our approach they do not. Wilkinson:The Division of Oil and Gas does not specify The drill sites are especially zoned to allow new wells.If such requirements.That is an issue normally dealt with a company wants to drill a new well, it must locate it in through local ordinances. one of the designated drill sites or change the zoning to Michael McKay, Huntin ton Beach Fire Department: allow new wells on other properties. Most of the ex- The 1976 Uniform Fire ode addressed only the prox- isting wells are in a different zoning district in which ex- imity of new wells to existing buildings. The 1979 isting wells can remain and be redrilled but in which no Uniform Fire Code now has a provision that if you have new wells are permitted. The same zoning and related an existing well,a new structure cannot be built within a regulations that are placed on these wells now would certain distance of that well. I realize, however,that the apply to them after a consolidation project. However, in Code is a model—it is not really State law and cities most unit projects,many of the existing wells and tanks have the option of adopting it. I'd like to know if any are abandoned because they are no longer needed. cities have been challenged on issues of inverse con- QUESTION: demnation that could occur in cases where the sug- gested 100 foot distance is imposed around existing Do you intend to protect the right of mineral owners to wells in an area where there are small lots.Would these derive an economic benefit from their subsurface pro- regulations amount to inverse condemnation if they perty, even while you restrict new drilling on the sur- prevented people from building on surrounding lots? face? Multari: I think that the fear of just such a situation in COMMENTS: Huntington Beach accounts for a footnote in the ver- Multari: If a person who owns mineral interests wanted sion of the Uniform Fire Code which was adopted by the City. Under certain circumstances, such as the to drill a new well, he would go to the owners of the development of fireproof walls and sprinkler systems, closest islands and negotiate a lease to drill from one of the City permits the 100 foot minimum separation be- them. Let me introduce Alan Hager from the State At- tween new structures and existing wells to be waived. torney General's office. He may be able to help us with This is not a very satisfactory solution in some respects, some legal questions. because it has allowed some buildings to get very close Alan Hager, State Attorney General's Office: A legal to oil facilities. This can result in noise, vibrations, or question that is raised by this kind of approach regards odor problems, but it does avoid the potential inverse owners of mineral rights that cannot be reached by condemnation situation. directional drilling from the centralized oil islands. Can you deprive a person of the right to recover that oil? QUESTION; Perhaps we have denied the owner the right to the mineral and, at the same time, allowed it to be drained Do you have any problems with odors from oil facilities by other people.I question whether that would be legal. in close proximity to houses?If you do have these prob- lems,how do you solve them? Jose Osuna,City of Long Beach: It is justified under the police powers of a city to provide different zones that COMMENTS: allow residential uses in one area, commercial uses in another,and oil extraction elsewhere. I think in the case Multari: We have high sulphur content oil in some of study that was just presented, the real problem is not the zones, and when the wind conditions are right we that the oil could not be recovered from the available have a lot of problems with odors.I can say from my ex- sites, but that hold outs would be a real impediment to perience that odor is the hardest problem to mitigate.It the formation of a unit. is even worse than noise problems. Noise mitigation is 24 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS expensive,but it is possible.Odor mitigation is very dif- ing system at the leeward side of one of the leases.The ficult to achieve. monitors will detect hydrogen sulfide gas in offensive Some of the kinds of things that have been done here or dangerous concentrations so that the oil operator regarding odors are not entirely satisfactory, but they can contact City officials and let them know whether or are improvements. In one instance, we found that the not there is a problem. most severe odor problems were occurring when cer- The detectors will do two things. One, of course, is to tain steam-related gases were vented into the air. If the notify the operator that there is a problem. The wind conditions are right, odor can become very con- operator can then look for the source and correct it. centrated. In some cases, loud complaints were Also, when we call an operator about an odor problem registered, and some people actually got ill. What we we think is coming from his lease, he can say, "Sorry, have been able to work out with the company in- go knock on someone else's door because our detec- volved—actually, they did it more on their own in- tors have not picked anything up from our operations" itiative—was a system whereby the gases could be held So it helps the operators and it helps us,too. in condensation tanks if they were so severe as to cause Dressler: Does the Air Quality Management District, complaints. AQMD, get involved with this? Do the citizens call the One oil company in the City is putting up hydrogen AQMD?And what is its policy? sulfide, HZS,monitors around the periphery of its lease. Bill Sheffield,Aminoil USA:The AQMD has been out to After HzS concentrations in the atmosphere reach a cer- our lease on several occasions for odor problems that it tain point, this device will signal some kind of a warn- suspected were emanating from our lease. The AQMD ing. This would allow the location of the gas source to will cite us if we create a public nuisance. be pinpointed, and the operation shut down until the wind conditions change or the HZS content of gases on QUESTION: the lease change. I don't know exactly how this system is being implemented at this time or how practical it is. Are you saying that the sulphur detectors will actually Terry Dressler, Air Pollution Control District, San Luis detect the presence of these gases before the human Obispo County: If you have installed the best available nose will?We have been told by the air pollution people that there is no such detector. control technology for the mitigation of odors and gases and you still have odor complaints coming in,the COMMENTS: Air Pollution Control District must enter into things. The District will have no other choice but to shut the Bill Sheffield, Aminoil USA:The devices will detect the operation down, or to cite it and issue a violation for sulphur and mercaptan content of gases before they being a public nuisance. Odor seems to be an almost become toxic, but not before they become odoriferous. unmitigable problem in some areas. The odors are too strong. Multari: In some places and under certain conditions, I Wilkinson:It is practically impossible to build an instru- think you are right. We also have a provision in our ment more sensitive than the human nose. We have a code that allows the oil inspector to shut down an very sensitive hydrogen sulfide detection instrument operation for excessive odor problems. that will measure less than one part per million of HZS gas, but although that concentration is very noxious, it Randall Abbott, Kern County:We had a situation in Kern barely registers on the meter. Detection equipment is County where difficulties in locating the source of odors designed to indicate toxic concentrations rather than caused problems in our mitigating them. We knew the the odor or noxious level of the gas.I do not think there odors were most likely coming from an oilfield waste is an instrument that can detect small concentrations of disposal site, but because there were other possible HZS more sensitively than the human nose. sources in the area, we could not specify the offending source. We lacked the capability of pinpointing the Sheffield: We are investigating the usefulness of am- culprit, and were therefore unable to bring action bient air monitors.There are ambient air monitors that against that party. Another advantage of unitization is will sense down to a few parts per million successfully. that instead of several different operators of potentially We are investigating these monitors and will probably offensive operations pointing their fingers at each put several of them on our lease to see if they will be other, there is only one party responsible for the pro- beneficial to us and if we can get them at a reasonable blem. cost. As soon as we get any kind of information,we will Multari: A related point is that through consolidation be glad to share it with the rest of you. and unitization,you are concentrating the facilities to a QUESTION: few locations,rather than having several wells scattered throughout another kind of district. Putting oil facilities At what stage of production or drilling of the well are in just a few locations makes problems easier to solve these odors most likely to occur? than when the facilities are spread out over numerous sites. COMMENTS: Michael McKay, Huntington Beach Fire Department: Wilkinson: Normally, noxious odors are not produced Earlier, you mentioned a sulphur compound monitor- when a well is being drilled. If a diesel engine is used, LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 25 some exhaust odors may come from the engine, but 25 feet of it.We'll build a six-foot wall so that the people other than that there are no particular odors that come who will be living in these condos will not see the from a well until a point is reached where gas is en- oilfield facilities". Until they built those homes, that oil countered. If it is pure methane, it will be odorless, but operator could drill and make all the noise he wanted to there are other compounds that may be mixed with because there was nobody nearby. If allowed by the zone gas that have a characteristic "oilfield City,a developer will come in and build on this land. smell'=particularly sulphur compounds. However, this Bill Sheffield, Aminoil USA:This is really just evidence would normally be of short duration. of what you planners can do: plan so that you do not Unfortunately, a lot of California crude oil has sulphur have residential encroachment right next to heavy oil in it, which causes the rotten egg smell. In the produc- uses. As I understand it, the purpose of this meeting is ing phase—if you are producing oil with a sulphur con- to help you solve these kinds of problems in your com- tent— hydrogen sulfide gas usually comes out along munity ahead of time. with the oil and water. This is not only smelly, but can, Bud Tippens,American Petrofina:As I see it,the City of at certain concentrations, be toxic. Hydrogen sulfide is Huntington Beach is starting to take care of noise prob extremely poisonous, even in fairly small quantities, if lems. It has a noise ordinance that limits the noise per- mitted at the property line to 50 decibels for residential, In an open area, HzS gas diffuses rapidly so it is not 55 decibels for commercial, and 60 decibels for in- harmful, although it is still quite odoriferous. Typically, dustrial. These are decibel readings from the property the well and the production system are designed so that line, and it is up to the operator to find the best way to they can be closed to avoid leaking gases in hazardous meet those standards. quantities. It is usually only when something malfunc- Linda Melton, Aminoil USA: I think our problems in tions that a leak occurs in the system and HZS odors are Huntington Beach are exacerbated by the fact that we noticeable. have people surrounding us who do not close their win- Normally, the strongest smells are either sulphur diox- dows at night and put on their air conditioning. They ide or hydrogen sulfide gases in combination with want to open all their windows on a nice,clear night and some of the other normal petroleum smells—what we feel the breeze from the ocean. This is a problem call "oily smells"—that occur in oil fields. If wells are because they can then hear absolutely every sound.The being steamed, some strong odors can be produced escalation of residential encroachment is definitely a from sulfides. As I mentioned, however, the systems problem that is going to take a lot of compromise and a today are usually closed, and tanks generally have lot of understanding. I expect that, things being what some type of vapor recovery system. Hence, there is they are,most of the compromise is going to have to be really no reason for excessively noxious odors around on the part of the oil companies and we will just have to an oil lease. Most severe smells should be transient include it in our cost estimates for operation. events. Wilkinson:We have two types of situations.We have the Michael McKay, Huntington Beach Fire Department: I urban situation in which we have less room to work, would just like to draw from some of the expertise in and we have the more open, rural areas that have not the room regarding noise problems related to drilling yet been encroached upon.You planners have some im- and redrilling. Our problem is that if we allow develop- portant decisions to make. Are you going to keep the ment close to wells, those wells are eventually rework- area intact as an oil field,but allow development within ed or redrilled and the owner of the residence will come some reasonable distance of the oil operations?Or are to the City and say, "Stop that guy,he's interrupting my you going to preserve some access areas to the subsur- sleep". Do we just tell this guy to live with it, or do we face as the field is infiltrated with urban development? tell the oil people to do something about the noise?The Decisions must be made as to how the oil operator can oil operator says, `I've been here for 40 years. That continue operating without being penalized excessively. building has been there for a year". Jose Osuna, City of Long Beach:We had a case that in- QUESTION: volved a marina that surrounds an area with six existing Does the City have ways to encourage unitization? wells. The company is going to drill about four more wells,but the operations can be shut down if there is ex cessive noise. COMMENT: Wilkinson: In regard to your sound problem, that oil Multari: That is a good question and one that we company has an obligation to meet the noise or- wanted to ask everybody here. What attracts an oil dinance. Certain operations can be curtailed during company to an area to form a unit?One of the ways to nighttime hours if necessary.However,there has to be a encourage unitization that occurred to us was to try to reasonable distance between the public area and the oil preserve some access sites so that in the future an oil operations,and a reasonable noise limit. company would not be scared away by the prospect of having to tear down houses or commercial McKay: A problem, though, is that the developers say, establishments to start drilling operations. We thought To--o'chat all the land not being used around this little that the most important thing the City could do was to pumping unit.It is very quiet,so we want to build within set aside districts that could be used for oil and to set 26 CITY OF HUNTINGTON BEACH;CALIFORNIA DIVISION OF OIL AND GAS up a policy to make it clear that we are concerned about ticipants who are putting up the money. Often times, preserving access for any unit projects that could occur too, there is a penalty placed against the hold outs sometime in the future. I believe, however, that the because of their unwillingness to put up the money. State must play an important role in encouraging Really,there are statutes in other states that are far bet- unitization. The State does have a compulsory unitiza- ter than ours. The California law as it exists now might tion law which could require hold outs to join a unit or as well not be there.I think it is that bad. be bought out by the majority if a certain percentage of I would also like to clarify something about subsidence the owners decide to participate. However, this law is and unitization.The subsidence and unitization laws are quite restrictive and has not been very effective. different statutes. There is a special Subsidence Act QUESTION: that was designed for the Wilmington field to deal with the subsidence problem there. The State can force What percentage of the participants do you have to unitization to provide for a repressuring operation or have before unitization can be forced on the whole? waterflood to prevent subsidence, but the law can be applied only in areas subject to inundation by the sea COMMENTS: that are already subsiding. Bud Tippens, American Petrofina: I am with the com- Multari: Is the State doing anything about compulsory pany that is trying to unitize the City's downtown area. unitization? There are certain things that cities cannot There is a statute in California that provides for forced do. Matters regarding the subsurface are generally the unitization if 75 percent of the leasable lots, 75 percent State's responsibility. of the independent operators, and 75 percent of the royalty owners who are receiving royalties from those Richard Weaver, City of Santa Fe Springs: The unit in independent operators all agree to the unit. No one has Santa Fe Springs is completely within City limits. The ever tried to force-pool into a unit in California, and we compulsory unit law could have been applied—they at American Petrofina really don't want to be the first to had the required 75 percent of all the various necessary try that. So what we are trying to do is put together a parties.But they chose not to apply it,and they are cur- voluntary unit. This means getting 100 percent rently operating the unit without the participation of the cooperation out of the 30-odd independent operators other 25 percent. There were apparently enough pro- producing in the downtown. Voluntary unitization can blems that they figured it would have been more expen- be difficult; it took Texaco seven years of negotiations sive to try to force everyone in than to operate without before it put its Signal Hill West unit together. them. So they are operating without 25 percent of the production being in the unit, and some of the holdout Would any of the independents try to block us by saying blocks are right in the middle of the field!There is a lot it is unconstitutional and that the State does not have of free riding,but apparently it is not significant. the power to force units?I think the State does have the power to do it, because it is in the best interests of the Multari: It is possible, for example, that a hold out's owners and the public. In all the other oil-producing wells could begin producing more water than his equip- states there are force-pooling statutes. As a matter of ment can handle after unitization has occurred. In a fact, they are even more stringent than those here in situation where the hold out's wells are not so for- California. tuitously located and their oil production decreases as a Jose Osuna,City of Long Beach:I don't see State courts result of unitization, would this operator be able to sue ruling orce-pooling unconstitutional; that's not the the unit for damages.) problem. The California force-pooling statute was in- Alan Hager, State Attorney General's Office: They can stituted in 1972.It was billed as something great,but its always sue,butt the question is are they going to win?In success, I think, can be measured by the number of California, there is no recent law on it.The perspective times it has been used—zero. There are also limits on of California law in the past has been that this would where it can be applied, based on the age of the field constitute trespass and that it was actionable in court. and its location relative to incorporated cities. There Trespassing occurs if you are injecting water and that are not many fields to which the mandatory unitization injected water moves onto somebody else's land. law applies. However, I think Texas and some other states have Another thing we have that most other states do not declared that if there is such a trespass caused by a unit have is a provision that the owners who agree to unitize operation, it is not actionable and you cannot recover have to be willing to buy out the people who don't go damages. The policy is that the imposition of liability along. Our law has an arbitration mechanism to settle discourages the same unit operations that the State on the fair value of the land to be bought out. In other wants to encourage. I think the equitable and rational states,hold outs are forced into the unit,and they don't approach is to not impose liability. Again, I don't know get any money from the oil produced until their share what the answer is in California, because there just isn't of the expense has been captured by the unit par- any law on it. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 27 CASE STUDY #2 PLANNING FOR OIL AREAS ON THE URBAN EDGE Multari: This second case study focuses on an oil field in wells, the Division of Oil and Gas suggested that all the another part of the City that, unlike our downtown area, is necessary wells could be located on two sites of about one not yet developed. In this case,we have the chance to do or two acres each.The Division of Oil and Gas advised us some advance planning before urban development starts to as to the general areas where each of these sites should be encroach upon the field. placed.They suggested that one site be located on the west The area is largely vacant, except for oil wells, associated side of the area and another toward the east,as was seen in tanks, and a few horse stables.The site is about 300 acres Figure 9.We were then able to apply surface planning con- in size, surrounded by "suburbia", with mostly residential straints to determine the best specific locations for the and some light industrial uses nearby.Recently,a developer islands. came to the City wanting to subdivide 20 acres within the The method we used to do this is a basic planning tech- 300 acre area. The Planning Commission and the City nique: a composite constraints map. We first analyzed Council decided that this was a good time to start doing geologic hazards; however, these proved to be mitigable some detailed,comprehensive planning for the area.Figure problems. Secondly, we reviewed our topographic con- 18 illustrates the draft plan that our staff has put together.It straints. We wanted to take advantage of the little bit of is still in a preliminary stage. The Planning Commission topography afforded in this area by preserving the drainage directed staff to develop a concept for low-density"estate" swales,the bluff area which overlooks the wetlands and the residential with equestrian uses. From an oilfield planning ocean to west,and the other higher points.Third,we look- perspective, we were most concerned with incorporating ed at the proposed public facility systems: roads, sewers, the following into the concept plan: 1)trying to concentrate trails,drainage,public open space,and recreation areas.We the existing and future facilities into a few locations so that wanted to pick sites for the oil operations that had access to the oil pool can continue to be tapped; 2)freeing most of one of the major collector streets, and we did not want to the land for other uses; and 3)trying to provide adequate put them directly on a proposed equestrian trail or sewer buffers between new uses and the remaining oil operations. line. Fourth, we analyzed ownership patterns and property In this case study,we would like to focus especially on the lines.We did not want our site in a location where three or problem of preserving surface access so that certain areas more properties intersect, for example. Finally, we were in the future will be reserved for oil operations.Three basic concerned about the location of the existing oil facilities. questions need to be answered: 1) how many future sites We did not want to choose a site where there are currently are needed;2)how large do they have to be; and 3)where no oil wells, but rather a location where some of the ex- do they have to be located? The Division of Oil and Gas isting facilities could be included in an island. provided help in answering these questions. By taking all these things into consideration, we came up Based on typical well spacing, there are some rules of with the composite constraints map shown in Figure 19. thumb for estimating how many wells will be needed for Using the general locations suggested by Division of Oil application of secondary or enhanced recovery techniques and Gas engineers,we picked the two locations shown in in a particular area.For example,in other parts of the Hunt- Figure 20 for the specific oil island sites. These sites are ington Beach field employing similar technologies, the outside all the important topographical and open space wells are spaced about one every ten acres. So this 300 areas that we felt needed to be preserved.They are adjacent acre site would require about 30 wells. If steam techniques to collector streets that we have planned for the area. We are to be used,the spacing is typically closer,perhaps a well tried to get a comer location for both islands so that we every five acres. In that case, 60 wells may be needed for would have buffers on two sides of the site,but we were this area. unable to find a location for the west site at an intersection Next,we wanted to know how many sites would be needed that would not jeopardize other goals. and where they should be located. By analyzing the depth After we determined where these sites should be,we had to of the oil zones and the typical reach of directionally drilled devise ways to effectively preserve them in a manner that LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 29 ® BLUFF AREA OPEN SPACE CORRIDOR SENSITIVE DEVELOPMENT AREA PROPOSED COLLECTOR STREETS 1 1 x. 1 1 1. ( 1.. l 1 � 1 1 � Figure 18. A portion of the draft land-use plan for a 300-acre undeveloped oil field on the urban edge. Planning goals for the area include preserving access to oil resources by consolidating existing operations and providing adequate buffers between new land uses and remaining oil operations. Figure 19. This composite constraints map,resulting from the consideration of surface planning constraints, was used to determine the best specific locations for oil islands. Areas with one or more constraints were shaded. Considered were geologic hazards,topography,proposed public facilities,property lines, and the location of existing oil facilities. 30 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS ® BLUFF AREA OPEN SPACE CORRIDOR 4 SENSITIVE DEVELOPMENT AREA PROPOSED COLLECTOR STREETS , z .......... t t \ Figure 20. The two locations chosen as sites for oil islands based upon the composite constraints map and the general locations suggested by the Division of Oil and Gas. was fair to the property owners.Diane Border,another plan- Let me begin with the General Plan designation because,of ner working on this project,will outline some of the options the three, it is probably the most stringent and may be the City explored. useful in areas where there are only a few existing wells left. Diane Border,Planner,City of Huntington Beach:You have Designating an area "resource production", a land use seen how we took a number of surface constraints,as well category we use in Huntington Beach,would make oil ex- as the geology of the area,into consideration.Next,we had traction the principal permitted use. A General Plan to decide what mechanism we could use to create and amendment would then be necessary before new uses maintain access on the chosen islands.I would like to brief- could be introduced. One condition for approving the ly discuss some of the options we examined for doing this. amendment could be the submission of an engineering No one solution will work in all situations,but these options report explaining why the site is not important to future ac- should give you an idea of the range of alternatives cess.Because a General Plan amendment requires a much available to you in preserving oil access. more extensive review by policymakers than a zone change or conditional use permit,drill sites may be more effective- To start at one extreme,we looked at the exercise of emi- ly preserved.A possible drawback to this method,however, nent domain for maintaining oil sites. Clearly, condemna- is the fact that General Plans usually do not differentiate tion has a number of drawbacks, not the least of which is land uses on parcels smaller than 20 acres. So,depending political sensitivity. Perhaps the use of eminent domain on the extent and configuration of the oil zone in your area, should be looked upon as a method of last resort for use in this option may be cumbersome to work with. areas where only a few existing wells or access points re- Base zoning,too, can be an effective way of preserving oil main.In these cases,however, it would likely be difficult to sites and may afford more flexibility than the General Plan make a convincing argument that there is an overriding designation. As we discussed earlier, Huntington Beach local public good in condemning the site for oil. currently allows oil uses under a zoning suffix which is at- Moving into the realm of the more likely,we identified three tached to the base zoning designation. Both uses are traditional types of land use controls that can be used for allowable, but because oil is permitted under a suffix only, preserving oil access. These are: 1) the General Plan oil operations can at any time be abandoned in favor of the designation; 2) zoning; and 3) overlay districts requiring base zoning use.Greater control can be exercised by mak- conditional use permits. ing oil itself the base zone.This would then require a zone LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 31 J change before other uses could be permitted on the site. A related form of TDR is"averaging" This is used when the Again,consideration of access preservation can be made a entire parcel has one owner.The surface area necessary for condition of granting a zone change. access is kept open and the development that could other- A third method is an overlay district with a conditional use wise have occurred there is distributed or "averaged" permit.Under this option,oil districts would be defined by a throughout the rest of the site so that the owner bears no general overlay designation which would require that a con- Penalty for maintaining access on one portion of the pro- ditional use permit be obtained for all uses other than oil. pew' The granting of a conditional use permit is contingent upon Multari: Our Planning Commission is considering a re- the applicant agreeing to certain conditions. For our pur- quirement, for reasons unrelated to access preserva- poses,these conditions could be preservation of existing oil tion, that new development projects be at least ten uses or not permanently encumbering the land so as to acres in size before they can be approved. We decided allow for future oil access. When considering this option, that, in light of this approach,an acceptable strategy for keep in mind that it almost literally creates a whole new preserving future access would be to take the sug- layer of regulation in the affected area. gested oil sites and allow them to be part of a minimum Another option that should be mentioned is using land ten acre project. The overall density of the ten acres owned by the city or county for oil access islands.On pro- would not be changed, and the area designated for oil perry that it owns or acquires,a jurisdiction can restrict sur- could be part of the open space requirements for the face uses to preserve access for future oil facilities.The sur- overall project so that developers would not lose any- face,or parts of the surface,can be kept free of permanent thing by keeping the sites open. However,we had some encumbrances until such time as drilling or an enhanced concern about allowing oil islands to count toward recovery project is proposed for the site—or is determined open space. An alternative would be to not let the oil to be impractical. At that time, the parcel can be sold or site count towards open space, and instead to increase leased to the parties proposing the project. Remember, the overall allowable density on the rest of the site.This though, that most enhanced recovery projects will require would create a density bonus for keeping the oil site more than one site,and the cost of acquiring a number of open. usable parcels for this purpose is likely to be prohibitively We also proposed that, in addition to the two man- expensive for most jurisdictions. Another drawback to us- datory oil sites required to be kept open for future ing parcels that are already owned by the city is that they use, there also be three other optional oil sites may simply not be in an oil zone or be of the correct con- created by suffix zoning on a base district.The prop- figuration for enhanced recovery projects. erty owners of the optional sites could then decide We then looked at some nonregulatory,incentive-based ap- whether to use the property for oil operations or for proaches to access preservation. First, some types of tax the base district use; both would be permitted. We abatement strategies may produce enough incentive to are worried about creating an artificial monopoly. If keep sites open for future oil operations or to keep existing we limit drilling to the two mandatory sites, that operations in production. Depending on your jurisdiction's means there are only two parties to go to for a new tax structure,there are a number of taxes or fees that could well from now on. The two parties could possibly be reduced. Property taxes, severance taxes, fees for a hold out for a pretty steep price, and the City, by its number of services like well inspections,drilling and redrill- zoning, will have artificially created a near- ing permits,and wastewater permits could all be subject to monopoly -condition. This is one of the reasons abatement,either singly or as a package. we've considered expansion to five islands—three of A concept that we found particularly interesting in this case them optional—instead of just two mandatory ones. was transfer of development rights, or TDR. Under this Before we begin the general discussion, let me method, development rights can be severed from one backtrack just a little bit to tell you about another parcel and transferred to another. For example, if the pro- problem that we tried to address while planning for posed island,which is to be kept undeveloped,would other- this area. As I have already mentioned, there are a wise have accommodated three residential units,the owner lot of existing wells scattered throughout the area. would be able to transfer his right to build three units to We were worried about problems arising from new another property,thereby increasing the allowable density, development near these wells.To help ameliorate and value,of that other property.Normally,total restriction such problems, the City revised its municipal code of development on a parcel would constitute a taking, but to require that the developer prepare a plan which with TDR the severed development rights are marketed addresses compatibility concerns and the future and transferred to another parcel. Proceeds from the sale disposition of oil facilities before any development. compensate the owner of the restricted parcel.Generally,a The concerns the plan must address include the size transfer zone must be defined into which transferred rights of the site set aside for oil activities to make sure can be accepted. The result will be somewhat higher den- that it is large enough to accommodate the existing sities in some parts of the area in exchange for keeping a facilities and any expansion that would be allowed portion or portions of it open. The overall density of the under the existing zoning, accessibility to oil sites area is not increased—just the density in some parts of it. from public roads, and access for emergency Care must be used in setting up a TDR scheme so that den- vehicles and oil equipment. The plan must also sities greatly out of character with the planning goals for identify the type of soundproofing treatment that is that area are not created. going to be used to ensure minimal potential noise 32 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS conflicts between the oil area and the residential ties to get together to prepare a satisfactory plan so area. that these kinds of concerns will have been con- sidered before houses are built and people move in- Any type of spacing requirements that the Fire to them. If an oil operator decides not to approve the Department would require with regard to access or plan, it can be submitted to the Planning Commis- public safety would have to be incorporated into the sion with a report explaining why the operator would plan. A landscaping plan must also be submitted not approve it. If the Commission can make findings which describes setbacks and buffer areas, and how that all the considerations have been adequately ad- they are going to be incorporated into the overall dressed by the developer, it may grant the develop- project design. The developer must have the oil ment or subdivision entitlement without the oil operator approve the plan before it is submitted to operator's approval. The decision of the Planning the City. This way, we feel that this forces both par- Commission could be appealed to the City Council. DISCUSSION QUESTION: COMMENT: Are you talking about relocating existing wells, or Multari: First, there is an underlying base zone just the siting of new wells? district. Then a "suffix" is applied which allows another kind of use. For example, if the base zone is COMMENT: residential, and there is an oil district suffix, either Multari: Only the siting of new wells. The next case oil wells or new residential uses are permitted. It is we are going to present does address relocating ex- up to the property owner to decide what to use the isting wells and the problems that we are having land for. with that. In this case, we know there is a lot of oil under the area in question and that it is going to be QUESTION: valuable in the future. The pool has never been waterflooded; enhanced recovery techniques have In a new situation like this,would you put conditions never been employed. We are concerned about on the new well sites that are not applied on existing allowing future operations to get that oil out, but at wells? the same time concentrating the oil facilities into a few locations. COMMENT: QUESTION: Multari: Yes. Our standards for new facilities are much stricter than for existing ones. The City just Are you proposing to prohibit new oil wells outside reviewed its oil ordinance and zoning districts this the islands? past year. From now on, new wells in Huntington Beach are going to have to conform with these COMMENT: stricter standards.Oil operators are going to have to Multari: Yes. New wells would be prohibited outside weigh the costs of meeting these standards in those Tve islands, and we would not allow new wells deciding whether or not to go ahead with the pro- elsewhere without a zone change. ject. QUESTION: Another problem, however, has been to find ways to Do the oil companies or the developers pay for the get operators who have been conducting business abandonment of non-unitized wells and the con- here for 30 or 40 years to make improvements to solidation of new wells? their facilities or their property. We did establish landscaping and screening requirements which are. COMMENT: not very expensive to meet, and for which there is a two year timeline for compliance.We will be much Multari: In the case of a unitization project, the oil more strict with new operations, especially if they company — the unit operator — typically pays for are in proximity to residential areas. Our standards abandonment and consolidation. In a case where differentiate between wells that are going to be drill- new development is planned around existing ed in residential areas and those that are going to be facilities, the developer would probably be required drilled in industrial zones. to make the necessary changes. QUESTION: QUESTION: Did you mention that the Division of Oil and Gas Can you explain your suffix zoning to me? I don't helped you determine how many more wells were understand how it works. needed to extract the resource? LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 33 J COMMENTS: QUESTION; Multari: The Division of Oil and Gas advised us on Can you run into problems in an older oil field that the following: 1) how many wells can be accom- is going into secondary recovery? Is it possible that modated per site; 2) how many sites are necessary; the old wells would not withstand the steam and 3)how big they have to be; and 4)where they should pressure?Could steam escape through the casing of be located. old wells or through small fissures in the ground? Wilkinson: I would like to point out that although we made the study for this project area, we cannot pro- COMMENTS: vide that level of detail for all cities due to the Wilkinson: When steaming operations were first amount of time and effort involved. Normally, you tried several years ago, things like that sometimes would bring in a consultant to assist you. However, occurred, particularly when steaming very shallow we will provide all the assistance we possibly can. zones. Today, not only does the Division of Oil and Multari: One can get an idea of the number of wells Gas require that injection be confined to the approv- needed by looking at similar operations close to the ed zone, but the economics of the project prohibit area in question. For example,we went to another area such an inefficient and costly waste of the heat close to this one that was used in a waterflood by a energy. major company. We asked this company what their Multari: I was under the impression that when a spacing was for water and steam injection. We were company wants to do a secondary project requiring then able to calculate the number of wells necessary in some injection,they have to submit their plan to the our planning area, and this gave us a pretty close, Division of Oil and Gas first. Wouldn't your Division usable estimate. Similarly, you can estimate the check to make sure the integrity of the casings were number of sites and their locations using data from such that they could withstand the kind of project other fields with similar projects. For detailed analysis that was being submitted to you? of a particular area, however, a petroleum engineer should probably be consulted. Wilkinson: All secondary recovery and water injec- QUESTION: tio'n stimulation projects must be submitted to the Division for approval by the State Oil and Gas Are you saying that the existing wells would be Supervisor. Cyclic steaming, because of its tem- allowed to remain? porary and periodic nature, is considered as a heat COMMENT: treatment rather than a waterflood operation. However, steamflooding projects are treated as full- Multari: Existing wells would be allowed to remain. fledged secondary recovery projects and, as such, ITo new wells would be allowed unless they are drill- are subject to a full-scale review by the geologists ed from islands. Relocating existing wells is very ex- and engineers of the Division. Following the Divi- pensive, and for many of these wells, the value of sion's review, which is extensive, the proposal may the oil they can recover would not justify drilling a be approved subject to a number of conditions, new well. The next case study is about a situation which include regular monitoring of the project to where we tried to encourage the relocation of ex- ensure that no damage to natural resources or the isting wells. environment is occurring. QUESTION: Jose Osuna, City of Long Beach: You are supposed to Are the new wells more productive than the old submit your plan tote Owl and Gas Supervisor. The question is: What does he do with it. Does he approve ones? it, or does he acknowledge that it is appropriate? He COMMENT: should say: "This is an appropriate recovery method, Multari: Yes, if they are part of a secondary recovery and 1 accept it:' project. If they are primary production wells, they Wilkinson: The State Oil and Gas Supervisor is re- would likely extract no more oil than the other ex- quired by law to determine whether or not any pro- isting primary production wells, and therefore posed secondary recovery project will result in would probably never be drilled.That highlights the damage to life, health, property, or natural underlying problem with relocating these existing resources, including freshwater aquifers. Our Divi- primary production wells, which average only five sion engineers make every effort to determine barrels of oil per day. It may cost hundreds of whether or not a proposed project might have an thousands of dollars to drill a replacement well in a adverse effect upon oil-or gas-producing reservoirs. new location, and the low production of these When a project meets established requirements and primary wells simply cannot justify the expense of a otherwise complies with our regulations, the Super- new well. Only in secondary or other enhanced oil visor then approves the project. It is not within the recovery projects, through which production will scope of the Supervisor's authority to determine or substantially increase, are new wells likely to be designate which secondary recovery method would economically viable in this area. be the most effective or successful. 34 CITY OF HUNTINGTON BEACH, CALIFORNIA DIVISION OF OIL AND GAS QUESTION: out there, unless a unit is put together and second- Has the City ever worked out the cost/benefit ratio ary or tertiary recovery techniques are applied. of purchasing those one-and two-acre oil islands, Wilkinson: I'd like to mention some things about simply holding them as the last two available places making an operation like this a little more palatable. to drill from, and waiting for industry to come When surface rights are separated from the mineral around to that point? rights and the surface owner gets little or no com- pensation, regardless of how much oil is produced, COMMENT: that surface owner has no interest in whether or not Multari: No, we did not analyze the possibility of the the operation lives or dies. The oil company could City purchasing those sites, but I think such a study sweeten the pot in some way, bring the surface would be useful. owner into the picture to a degree by offering a frac- tional share of the oil income. I think that would in- QUESTION: crease cooperation. Is the City primarily concerned with access for a Richard Weaver,City of Santa Fe Springs: In a situa- secondary recovery project? tion wherein the owner ot the property has no in- terest in the minerals any more, he may have COMMENTS: nothing coming in from the oil operation. But the old lease has tied up the surface, and development Multari: Yes. The existing wells in primary produc- cannot occur due to the oil encumbrance. This is tion are really not benefiting the City much. As we very crucial to encouraging new development. The saw in the fiscal analysis, they are not going to pro- oil companies are becoming much more duce enough revenue over the long term to cover cooperative—although we think they could be a lit- the service costs to them. They detract from the tle more cooperative—in releasing superfluous sur- property values of adjacent lots, and they also in- face rights that they no longer need for their opera- hibit the consolidation of parcels for new kinds of tions. We have, on some occasions, even used emi- development. So the primary production wells are nent domain to condemn the surface where there not the ones we are really worried about preserving seems to be no other way to achieve its release in access for. It is the wells in a secondary recovery or Santa Fe Springs. enhanced oil recovery project that we are concerned about. This is where all the benefits occur—increas- QUESTION: ing production, cleaner operations, improved fiscal What is the State's interest in preserving access and benefits. Nevertheless, somebody has made an in- what are they doing? Is there any role that they can vestment in those primary production wells and take to help local government? If the State can take they are private property. The City is sensitive to a role in unitization by drafting legislation, what can that and tries to protect the operators' interests. it do about access? As times change and the land gets more valuable, COMMENTS: someone may come in and start buying those wells because it will be more valuable to build con- vVilkinson: Well, it would be easy if we had a State law dominiums, for example, than to pump five barrels saying that surface access must be retained over every of oil a day. In some places in the City this has oil field. This would be like a resource preserve. But already occurred and wells have been abandoned. before we would even attempt to get legislation like Alan Hager, State Attorney General's Office: Would that, we would be around to all local governments af- all the surface owners be in favor of removing the oil fected by such a law to see how they are going to feel operations in the case study area? about having the State pre-empt some of their authori- ty. It would certainly make our job easier if we could Multari: Most of them. The surface owners are say- just come to a city and say, "We have got to have two inging—"I get little or no royalty from the oil operator acres here and two acres over here zoned for oil". It who is producing five barrels a day,so who cares?If I would, in a sense, make the city's job easier because it can get the oil operations off my lot, I can build a would take some of the pressure off local officials. But million dollar housing project on it."That is why we the realities of such a law are not so simple, unfor- are concerned about this entire area being built over tunately. and never being able to implement a secondary Alan Hager, State Attorney General's Office: There are recovery program. several possibilities for preserving access. Maybe the Then too,this is an old field that has been in produc- most intrusive into local government authority and tion for a long time, and it will cost a couple of hun- development interests is the resource preserve. There dred thousand dollars to drill a new well. If you are are precedents to this, such as the Williamson Act, producing five barrels a day, it is going to take a where local governments can contract with property pretty long time to recoup that kind of capital in- owners so communities can keep land in agricultural vestment, especially with the current interest rates. use. As a consequence, the owner gets a property tax So we don't see very many new wells being drilled benefit from agricultural use, although this is not LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 35 necessarily the highest and best use of the land. The area with a multitude of small ownerships and in- owner's property tax is lost for the local government, dependent wells. You would really be tying up so and made up by subvention from the State. much land that you would not be achieving a local good as far as land use is concerned. I feel access Another option is to mandate, through the general preservation should be tied to unitization and state zoning law, that oil access be taken into con- secondary recovery. You don't have as much of a sideration when zoning any area overlying an oil problem providing access if you have a unitized field. The mandate would be that the city or county field. must make some provision for retaining surface ac- cess. The local government would determine exact- Multari: You can provide access for the future and it ly how and where that is to be done. The Division of oes not have to be on all the individual sites. Just Oil and Gas could provide information on where the as we have proposed, a few sites can be set aside to oil fields are, how much space for access is needed, provide enough space so that it is technically possi- and where. ble to reach those oil pools in the future. I think Multari: That points out something that we have Celia is right: access and unitization must eventual- been worried about in terms of zoning—choosing ly go hand in hand. By analogy, redevelopment law the sites for future access to oil resources. When we says that if you have to consolidate surface areas to are talking about most resources to be protected— promote the public good in revitalizing an area,you sand and gravel resources or prime agricultural can use eminent domain to acquire the holdouts. It land, for example— they are on or close to the sur- seems that the State should strengthen its com- face and there is really little doubt about what area pulsory unitization law to force hold outs to join a has to be retained to protect them or to preserve unit for the public benefit. them. With oil and gas, however, there is significant James Lopes, San Luis Obispo County: I don't think flexibility in choosing where the access sites can be our Board of bupervisors would look favorably on located, and this raises the question of being ar- the State totally pre-empting the County, but they bitrary and capricious in zoning certain properties would probably support a requirement that oil as oil access preserves. We should be establishing criteria, related both to the surface and the subsur- resources be considered in planning and zoning. It face, for evaluating potential access sites. would be up to the local jurisdiction to address the problem of providing access, yet there would be an Todd Collart, Ventura County: There hasn't been element of compulsion in addressing the issue. pressure on local government to look at these issues. Nobody is looking far enough ahead to these Collart: At a recent meeting in our County with problems. We all agree that the problem will come citizens in an anti-oil committee and with represent- about over time, but we are not getting the initiative atives of the oil companies, both parties apparently from the State saying we should address the issue saw the value of having this kind of access require- now. ment as part of the General Plan, but for just the op- Wilkinson: You've put your finger right on the issue. Posite reasons: one group saw it as a way to preserve This is the principal reason for our meeting today' oil, and the other to eliminate or reduce it. I think P P g y' that having such a requirement will mandate that We feel the same way—there are a lot of areas where the issue be addressed, and force local government access problems are not yet as pressing as those and all interested parties to sit down and resolve it, here in Huntington Beach, but they are coming. The instead of allowing it to exacerbate over time until Bakersfield ar.�a has experienced these problems there is no good answer. Hopefully, in the rural recently. Kern County prepared a new General Plan counties,we can get a head start this. that involved several oil fields and,all at once, it was a potentially serious situation for future oil opera tions. In the more rural areas such as San Luis Wilkinson: That's the point I was making. Obispo and Monterey Counties, new development Somewhere down the line you are going to have to and expanding towns are moving out into oil fields. face up to this. The main thing is that you cannot You people have a chance to do something now that wait until it is too late. You have got to do it while perhaps the City of Huntington Beach wishes it had the space is there. done 20 or 30 years ago. It is an opportunity to ad dress a potential problem while you still have time Collart: Rural areas not only have more time, to plan properly and carefully. If the State did enact t e—y ve also got more ways to innovate because they legislation that would require local governments to have more available space. The situations we've provide areas of surface access to the subsurface oil been discussing in Huntington Beach today are resource, how do you think your jurisdictions would much more constrained. So let's sit down now and respond? plan . . . not 20 years from now when it is all built over. We are suggesting that there be a law simply Celia Weaver,Califomia Coastal Commission: I don't requiring that counties and cities address the oil ac- think we would be in favor of requiring access in an cess problem, not how they must address it. 36 CITY OF HUNTINGTON BEACH;CALIFORNIA DIVISION OF OIL AND GAS CASE STUDY #3 RELOCATING INAPPROPRIATELY SITED OIL FACILITIES Multari: This last case involves a situation in which ple were having a hard time getting to it, and the area wells and related facilities were located on a site that was also ugly and dangerous.The City Council adopted the City Council decided was inappropriate for such policies to:a)phase out existing wells on the ocean side uses. The City developed policies encouraging the of Pacific Coast Highway; b)pursue strategies with the removal of those facilities from that location,while pro- oil companies and the State Parks Department to im- viding alternate locations for them. prove the recreational value and visual quality of the The area in question is part of Bolsa Chica State Beach, site;and c)to approve new wells or redrilling of existing across from the City's downtown area on the ocean side wells on the ocean side of Pacific Coast Highway only if of Pacific Coast Highway. Several wells are"strung-out" all of the following conditions are met: that the along the bluffline between the highway and the ocean, resources are not recoverable from any other onshore with numerous exposed pipelines lying along the bluffs. location or offshore platform; that the site is improved It is not an attractive sight.This area is located near one to become compatible with the recreational uses of the of our prime residential areas, and is a heavily used beach; that public health, safety, and welfare are not public beach. jeopardized;that all adverse environmental impacts are mitigated to the maximum extent feasible; that the net On a half block—about 1.5 acres—on the inland side of overall impact of oil production facilities on visual Pacific Coast Highway is an oil island owned by one of resources is improved; that safe access to the beach is the principal oil companies in the City.There are about provided. 20 wells in this island, directionally drilled under the In summary,the goals that we were trying to implement bluff area into offshore oil pools. The same company were: 1) to remove and bury the pipelines; 2) to im- also owns some of the wells on the beach that are also prove the appearance of the site; 3)to provide safe ac- directionally drilled under the shoreline into offshore pools. Another company owns the remainder of the cess—not only by removing the pipelines, but also by wells on the beach,and those wells are generally drilled trying to get some stairways and ramps down to the straight down,tapping the oil right under the beach. sand; 4) to restrict new oil facilities unless there is ab- solutely no other feasible location; and 5)to encourage This bluff area is State property, but the oil companies relocation of the existing wells by phasing them out have surface leases which allow them to continue their through some kind of an incentive program. activities there for as long as they can produce oil.The pumping units are all visually exposed to the public. The first step was to meet with the two oil companies There is no screening or landscaping, nor is there safe and the State Parks and Recreation Department. We public access from the bluff down to the sand. People were able to develop a concept plan that all parties who want to go to this beach must cross Pacific Coast agreed to. The concept plan called for the eventual Highway, climb over exposed pipelines, slide down the creation of a bike trail along the bluffs, an accessway bluff between the pumping units, and jump down the system, a landscaped blufftop park, and some kind of seawall before they finally get to the sand. So unless screening of the remaining oil facilities. Although we you are a nimble teenager, it is pretty hard to get to that had an approval in concept for the plan at that time,we sand. Old or handicapped people, and families with did not get any commitment for action. No funds from small children were excluded from this beach,and they any party were yet available. were unhappy about it. The City contended that some of these improvements, During the public participation process related to the especially the burial of the exposed pipelines and the preparation of our Local Coastal Program, there were landscaping of the oil facility sites, were clearly the numerous complaints that the community had a beach responsibility of the oil companies. Rather than simply adjacent to its most populous residential area, yet peo- require these improvements by ordinance, the City LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 37 tried to get the companies to comply on a voluntary no redrilling of these wells is allowed unless the com- basis through a Memorandum of Understanding pany submits some kind of documentation proving that whereby the companies would make improvements to no other location for drilling is feasible. The City even- the beach in exchange for some benefits from the City, tually passed new ordinances requiring burial of the such as rezoning other inland sites for oil operations or lines and landscaping of the sites. After these became the relaxation of deadlines for compliance with other mandatory, the company complied in a cooperative requirements. manner. We were able to find the necessary incentives for the Another positive event occurred as a result of these ef- company with wells directionally drilled offshore. This forts. The City unsuccessfully applied for an Urban company wanted to use steaming in an offshore pool, Forestry Grant to help landscape the blufftop. When and new wells were needed to do this. What we pro- funds from this source were denied, one of the oil com- posed was to create, through rezoning, an inland loca- panies decided to put up a"matching grant"of its own, tion which would allow the new wells to be drilled if the contributing one dollar for every dollar donated by company met certain standards regarding soundproof- local businesses and citizens. Fund raising went on for ing and landscaping at the new site and also submitted four months, and more than $80,000 was raised. Once a schedule for the eventual phase-out of the wells on the this community response was elicited, there was a beach while burying their exposed pipelines there. snowball effect. The City itself contributed an addi- What we were really saying to them was, "You can put tional $50,000, and the County will add another sizable more wells in this inland area for your project, but you contribution. There are now substantial funds available have to take your wells off the beach over some to help transform parts of this once unsightly area into reasonable time frame, and bury the exposed pipelines an attractive blufftop park. now. Thus, some positive results did occur from our efforts, We were not able to find any incentive to induce the but the overall picture is mixed. Where one of the com- other company to relocate its beach wells or make panies was willing, we were able to find an alternate other improvements on a voluntary basis. Part of the drill location and an accelerated phase-out of that com- problem was that the pools tapped by this company's pany's wells on the beach. With the other company, we wells were so marginal that, in the company's opinion, were not so fortunate.We will allow their existing beach drilling or redrilling from inland locations would never wells to remain, of course, but no expansion on the be profitable.Consequently,the City continues to allow beach will be allowed unless very strict policies are these existing wells to remain on the beach; however, followed. DISCUSSION QUESTION: that we are forging a lot of new ground here. In 1960, the population of Huntington Beach was Multari: One question I would like to discuss is why a about 11,000. Since then, there has been tremen- city would want to enter into voluntary agreement when dous growth in an area where oil operators had been it can just pass a law and force compliance? Our ex- working on their leases for 30 or 35 years. When perience was that of spending a year working on a they started, there wasn't anybody around. A lot of voluntary agreement which was never accepted. We them are still not used to dealing with the restric- thought we would cooperate with the oil companies and tions and regulations placed on oil operations in an provide incentives for them to make improvements, urban environment. I think the process—and I know it without forcing them to do it. In the end, though, a law was a lengthy one and that you ended up passing regu- was passed anyway. lations anyway—did result in some benefits.There was Putting myself in their place, I know that I would not better understanding of strengths and goals. I think we want to tell my boss,"Let's do a project costing one and have established some good working relationships, not a half million dollars, that we don't really have to do." only with the City and some of the major oil companies, But if I say, "We've got to do it or the City is going to but with some of the smaller companies as well.For in- pull our permits and shut our wells down", I would prob- stance, on the blufftop park' fund raising, everybody ably carry my case to corporate management a little Pitched in and worked together. I think there is going to better.So is there any reason then why a city should not be a lot more of this type of cooperation. It has started adopt this attitude from the beginning and just lay the the ball rolling for public sector/private sector cooper- law down? ation here in Huntington Beach, and I think the end result will benefit everybody. COMMENTS: Bud Tippens, American Petrofina: I think one of the Linda Melton, Aminoil USA: I think there could be a things you can do is combi-n—e-tT e rulemaking process number of good results from instigating voluntary, and cooperative agreements. It is important to get the cooperative projects. One thing we have to realize is oil companies in on the ground floor of the rulemaking 38 CITY OF HUNTINGTON BEACH;CALIFORNIA DIVISION OF OIL AND GAS process. That way, even if some governing body is because we, the staff, ended up knowing a lot more ultimately going to pass a law, it will have been for- about oilfield problems than we previously had.We cer- mulated with information on the technological and tainly have a much better relationship with the economic constraints facing the companies. operators than we did before. I agree with Linda Melton's comment about how increased cooperation Vic Byers, Chevron USA: 1 think that's a good point for other projects has resulted from our earlier efforts. because in the course o our discussions with the City valuable information was shared that was used in mak- James Lopes, San Luis Obispo County: In San Luis ing up the ordinance—what we could live with,what we Obispo County, we have an application for 200 new oil couldn't live with. In this case, the City then knew what wells which will double the size of an existing field.The was workable and feasible when the time came to for- existing field is old, and was inherited by a company mulate regulations. that is making great strides in cleaning it up. But there are still a number of older wells along a commuter road Terry Dressler, Air Pollution Control District, San Luis through the area. The road is not designated a scenic Obispo County: The Air Resources Board has a new highway by the County, but it is what we call a "scenic program to remodel rules. The local district will road" in one of our plans. The County's policy is to try spearhead it, and representatives from both industry to have the appearance of that road improved, just as and the Board will sit down and hash out issues. We the beachfront here in Huntington Beach was improv- hope that by the time a rule gets to the Board for a vote, ed. Could a requirement that the operator relocate everybody will agree. Now,that doesn't always happen, some of the wells immediately adjacent to the road be but it's a lot better than a regulatory agency sitting tied to approving the request for new wells? down and writing the rule with no communication. In Alan Hager, State Attorney General's Office: It is prob- Huntington Beach's case,did the City Council make the ably a question of degree. Keep in mind that in aban- oil companies aware at the outset that staff had a man- doning a well, you are asking the operator to give up date to get results, if not by voluntary means,then later something that is still producing money.The economic through an ordinance? tradeoff must be worthwhile for the operator before it Multari: The Local Coastal Plan policies had been will be done. adopted, and they included policies regarding the pro- Multari: This concludes our workshop. I hope that the vision of safe beach access and pursuing strategies with State Parks and Recreation and the oil companies. issues we have discussed today will be useful in your These were explicit policies. Also, the companies were planning efforts. I think we have seen that although ur- ban oil production creates some unique land use issues, aware, through informal channels, that this was impor careful planning can mitigate impacts and increase tant to the community. compatibility to a great degree. Thank you for your in- I think, overall, the process produced beneficial results terest and participation. i LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 39 WORKSHOP PARTICIPANTS Mr. Randall Abbott Mr. Alan Hager Planning Director, Kern County Deputy Attorney General, California Department Mr. Charles Antos of Justice Associate Planner, City of Seal Beach Mr. Dennis Hawkins Mr. Glen Barnhill Associate Planner, Ventura County Principal Planner, Kern County Mr. Luis Hernandez Mr. Randy Bissell Assistant Planner, City of Inglewood Planner, City of Montebello Mr. Richard Hoffman Ms. Diane Border Building and Safety Bureau, City of Long Beach Planner, City of Huntington Beach Ms. Carol Inge Mr. Ed Brannon Planner, City of Huntington Beach Energy and Mineral Resources Engineer, Mr. James Lopes California Division of Oil and Gas Associate Planner, San Luis Obispo County Mr. Mike Burnham Ms. Lorena Margoles Planner, City of Whittier Planner, City of Los Angeles Mr. Vic Byers Mr. William Master Land Development, Chevron USA, Inc. Senior Planner, Santa Barbara County Ms. June Catalano Mr. Michael McKay Director of Community Development, Fire Prevention Specialist, City of City of Laguna Beach Huntington Beach Mr. David Cleveland Mr. M.G. Mefferd Planner, City of Torrance State Oil and Gas Supervisor, California Division Mr. Todd Collart of Oil and Gas Associate Planner, Ventura County Ms. Linda Melton Ms. Jan Denton Manager, Community Affairs, Aminoil USA, Inc. Director, California Department of Conservation Mr. Dick Morton Director of Development Services, Mr. Dave Doerner City of Fullerton Environmental Geologist, Santa Barbara County Mr. Michael Multari Mr. Terry Dressler Planner, City of Huntington Beach Air Pollution Control District, San Luis Obispo County Mr. Jim Orr Administrative Assistant to State Assemblyman Ms. Claudette Dupuy Nolan Frizzelle Planner, City of Huntington Beach Mr. Jose Osuna Mr. Barry Eaton Building and Safety Bureau, City of Long Beach Chief Planner, City of Fullerton Mr. Robert Poteet Ms. Kathleen Faubion Associate Planner, City of Montebello Senior Planner, Santa Barbara County Ms. Ellen Rognas Environmental Coordinator, San Luis Ms. Jeanine Frank Obispo County Planner, City of Huntington Beach Mr. Bill Sheffield Mr. Herb Glasgow Environmental Compliance Officer, Aminoil Planner, City of Los Angeles USA, Inc. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS 41 Ms. Christine Shingleton Mr. Hilman Walker Director of Planning and Community District Land Supervisor, Chevron USA, Inc. Development, City of Signal Hill Ms. Celia Weaver Ms. Dana Stoic Energy Analyst, California Coastal Commission Planner, City of Hermosa Beach Mr. Richard Weaver Mr. Bud Tippens Planner, City of Santa Fe Springs American Petrofina, Inc. Mr. E.R. Wilkinson Mr. Ron Tippets Special Representative, California Division of Oil Project Planner, Orange County and Gas Mr. James Tucker Planner, Citv of Santa Fe Springs 42 CITY OF HUNTINGTON BEACH; CALIFORNIA DIVISION OF OIL AND GAS SELECTED REFERENCES 1. California Oil, Gas, and Geothermal Resources: An Introduction, California Division of Oil and Gas, 1983. 2. Coastal Energy Development: The California Experience, California Coastal Commission, September 1981. 3. Coastal Energy Impact Program, City of Huntington Beach, February, 1980. 4. Huntington Beach Energy Series Report 01: Preserving Surface Access to Underground Oil Reserves in Developed Areas, City of Huntington Beach, February 1981. 5. Huntington Beach Energy Series Report 02: Fiscal Impacts of Oil Operations in Huntington Beach, City of Huntington Beach, March 1981. 6. Huntington Beach Energy Series Report 4*4: Enhanced Oil Recovery in Hunt- ington Beach, City of Huntington Beach, September 1981. LAND USE PLANNING IN URBAN OIL-PRODUCING AREAS TR31(8-83-DWRR-1 M) 43