Monday, April 24, 2006

Oil may Bankrupt Hermosa Beach

While most of us feel like going to the gas station could bankrupt us, the City of Hermosa Beach may bankrupt itself for not wanting to increase oil supplies.

Because of some decisions by city officials, Hermosa may wind up bankrupt. Many voters may conclude that the fiscal future of the city is probably the most important issue they will consider in a special election this June to fill a vacant City Council seat. Here's why.

In 1984, Hermosa Beach voters passed an initiative lifting a decades-old ban on oil drilling throughout the city, allowing oil and gas drilling at two sites: the maintenance yard near City Hall and the former South School playground. Two years later, a company called Macpherson Oil acquired drilling rights from Hermosa Beach for a 30-year project to slant-drill for oil at these two government-owned sites.

In 1986, Macpherson made a $100,000 payment to Hermosa Beach, and the company claims it invested millions of additional dollars fulfilling the project. The city also mandated extensive studies of the site relating to public health and the environment.

In 1995, before Macpherson could actually break ground, however, Hermosa Beach voters approved Proposition E, reinstating a ban on oil and gas drilling within city limits.

While this initiative was being challenged in the courts, in 1998, the Hermosa Beach City Council completed the shutout, voting to cancel the project. The council claimed that a consultant it hired deemed it unsafe. So where was this consultant years earlier, when the city entered into its deal with Macpherson? Proposition E was advanced by a local environmentalist group called Stop Oil, so it's no mystery what its objective was throughout the process. After all, many environmental activists oppose development and expansion of infrastructure we all need and use, details be damned.