Hermosa Beach City Council Member Jeff Duclos says we should be upset with E&B Natural Resources and the shocking level of management incompetence. They took no responsibility for the lack of oversight pulling a drilling permit and DID NOT apologize for their error.
Former City Council Member Michael Keegan says, E&B has proven so incompetent they can't even pull a proper drilling permit and why isn't the City Council upset? Why isn't Hermosa Beach looking for a new oil drilling applicant?
The City of Hermosa Beach is among three entities cited by the Los Angeles County Public Health Department--Environmental Health Drinking Water Program for drilling on the public works yard site last Tuesday without the required permits.
Brycon, LLC, a consultant out of Newport Beach, and J & H Drilling Co. Inc. out of Santa Ana were also cited for their participation in the work, which was being done on behalf of E&B Natural Resources to test soil and groundwater for contamination.
In the "Notice of Violation & Order," the city, Brycon and J & H were directed to submit a Well Permit Application by today. J & H must also submit proof of a valid California C-57 Well Water Contractor's License.
All three will also be fined, according to Richard Lavin, chief environmental health specialist with the Drinking Water Program. The fine, due by June 10th, has yet to determined, he said late Tuesday.
Permits are required for any well drilling in the state, he said. His department oversees drilling in L.A. County, with the exceptions of Long Beach and Pasadena.
HERMOSA BEACH, CA - Hermosa Beach City Manager Tom Bakaly issued the following statement in response to a request from Los Angeles County for a permit for work at the city’s maintenance yard that is part of the environmental study of the oil production project proposed by E&B Natural Resources Management Corp. (E&B).
“The work at the city’s maintenance yard involved shallow borings into the soil to obtain groundwater samples as part of the information-gathering process for the environmental review of the oil production project proposed by E&B. This is a relatively routine sampling operation for a project of this type, and it required just one day of work and little disruption of the site. While the city staff investigated the need for a state permit for the water sampling process, it was unaware that a Los Angeles County permit was needed for such work.
“We apologize for any confusion this environmental data-gathering process might have caused. The city remains committed to providing residents and voters with thorough information about the proposed oil production project and will strive to communicate more fully in the future. As part of the ongoing communication, the City Council will receive an update at its meeting on May 28 about Hermosa Beach’s General Plan, its Community Dialogue and the environmental review process for the proposed oil production project. We invite all the city’s residents to become involved in these processes to help determine the future of Hermosa Beach.”
As is often the case after a Project Application is deemed complete, the city had asked E&B for additional information for the Remedial Action Plan (RAP) submitted as part of E&B’s Project Application. A contractor for E&B conducted shallow borings in the soil at the maintenance yard to obtain groundwater samples to address soil contamination known to exist on the site because of its historic use as a landfill. This sampling process did not constitute “testing” or sampling for oil at the site: It only sought information about groundwater and is much different from oil drilling.
The information from this sampling will help the city gain more information about the groundwater conditions underlying the site and to better evaluate the effectiveness and appropriateness of the proposed RAP. Groundwater information also is essential for an accurate description of baseline environmental conditions in the Environmental Impact Report (EIR) the city will be preparing to examine all environmental impacts of the proposed project.
The city had a license agreement with E&B that gave the company and its contractors access to the maintenance yard to obtain the samples. The work was completed on May 7. Before the work began, the city had asked and determined that no state permit was required. After the work was completed, the city became aware that the Los Angeles County Public Health Department’s Bureau of Environmental Protection required a permit and that the permit should have been obtained by the geotechnical contracting company hired by E&B.
The city notified E&B of its responsibility to obtain the permit. E&B’s contractor has now filed for the appropriate permit with Los Angeles County.
I guess the joke is on us and the City can get away doing whatever they want and make up their own rules. When will the lies, corruption and deception of the truth stop in Hermosa Beach? This drilling started at 8am on May 7 at the Hermosa Beach City Yard.
Neighbors were not notified and the City did not have a permit to do this according to sources who asked City Manage Tom Bakaly. Is this grounds to fire a City Manager for ignoring this huge issue? See this incident at the last City Council meeting where Tom Bakaly refuses to publish a letter. Is Mr. Bakaly really working for the people or is he also now working for E&B? Why is Mr. Bakaly hiring an outside consultant to moderate / facilitate a town hall meeting? Many questions need answers and this is not leadership.
City of Hermosa Beach Drilling Without a Permit?
Here is the Hermosa Beach drilling ordinance right from their web site. The drilling, boring or otherwise sinking of an oil or gas well, or oil or gas wells, or the maintenance, pumping or operation of any oil well or oil wells or gas well or gas wells in the city is declared to be a nuisance and is declared to be unlawful. It is unlawful for any person to drill, bore or otherwise sink or maintain, pump or operate or cause to be drilled, bored or otherwise sunk, or maintained, pumped or operated, or to aid in the drilling, boring or otherwise sinking, or maintaining, pumping or operating of any gas or oil well or wells for the purpose of procuring oil, gas or other hydrocarbon substances within any portion of the city. It is unlawful for any person to commence the construction or to construct or maintain any derrick, or any oil well apparatus in the city for the purpose of drilling for or maintaining any oil or gas well in the city; except, however, the oil wells now constructed or under construction or in actual operation in the city. (Ord. 95-1139 § 2, 1995; prior code § 21-10)
Below is a draft of our settlement agreement comments we are compiling from residents. We welcome your comments so please email us with your comment structured similar to below. If you want to read the full 45 page agreement you can download it on the HermosaBCH.org or at Google Docs.
Recitals, Page 1, A Macpherson also obtained all of the necessary Permits to Construct for the Oil Project from the South Coast Air Quality Management District In November 1995 the residents of the City passed City Measure E an initiative measure that banned oil drilling in the City. Comment- South Coast Air Quality Permit ran out or cancelled March 30, 2000. Recitals, Page 1, A In early 1998 and notwithstanding the passage of Measure E the California Coastal Commission authorized issuance of Coastal Development Permit No 29E86 to Macpherson far the Oil Project subject to conditions Comment - Coastal Developmental Permit No. 29E86 never issued. Recitals, Page 2, D Substantial revenue stream to be generated for City and the Hermosa Beach School District as a result of the payment to City and School District of royalties in association with the production of oil and gas reserves by E&B Comment - How can School benefit from tidelands trust?
Definitions, Page 3, 2.10 School Lease means the lease between Macpherson and the Hermosa Beach School District Comment - No lease on School property found. Where is this?
The Closing, Page 4, 3.2 Confidentiality Agreement previously signed on behalf of each of the Parties on February 17 2012 Comment - Where is a copy of this?
Macpherson's Obligations At Closing: Page 5, 4.1
1031 exchange as provided in Article X
hereof all of Macpherson the School Lease and any other leases releases set forth in
paragraph VI Comments - Like-kind exchange, what's Macpherson doing here? What other leases are involved in this agreement?
E&B's Obligations At Closing: Page 5, 4.3a Said assignment
reserves to Macpherson from E B and its successors and assigns an
overriding royalty of 1.5% of one hundred 100% of gross hydrocarbon production but otherwise Comment - Macpherson keeps part of this going here. E&B's Obligations At Closing: Page 6, 4.3c
constitutes the E&B Loan of $17,500,000
Comment - Note this loan and how it's to be repaid by the city.
E&B's Obligations At Closing: Page 6, 4.4b Upon issuance of the drilling permit or in the event the City cannot issue the drilling permit as the sole result of action or inaction undertaken by and under the control of E&B (including without limitation) the failure of the California Coast Commission to issue a coast development permit. immediately
thereafter forgive $14,000,000 of the E&B Loan
Comment - Failure to meet conditions and most of loan is forgiven? Where does the fact we are giving E&B a $15M property factor into the cost? Total costs is more like $18.5M and more cheaper to vote no. City's Obligations Following Closing: Page 7, 4.6a
Place on the ballot at a special municipal election in a manner that
comports with all applicable law within six 6 months of a request to do so by
E&B Comment - Within 6 months call election!!!! "....notwithstanding inconsistent change in City's Municipal Code." ???? City's Obligations Following Closing: Page 7, 4.6b
Vacate and make the City maintenance yard available for the construction of
the Project as when and in the manner and subject to the conditions provided
for in the Lease and repay Three Million Five Hundred Thousand Dollars of the E&B Loan through a deduction of royalties equal to 1.5% of gross proceeds. Comment - Vacate and make the City maintenance yard available? And where in the world is the city going to put it. Steve Burrell could never find another location for it, here or in Redondo Beach. Let's get real. this is an important issue. This property is worth $15M and we are paying them $3M on top? Total deal looks like $18.5M to vote yes. City's Obligations Following Closing: Page 8, 4.6d
Grant as reasonably required by E&B all necessary rights of way easements franchises and other rights as necessary for subsurface pipelines <
and other facilities and appurtenances in order for E&B to drill for produce
market transport and sell all oil and gas produced from the subject lease Comment - Whoa Ho! Check out this demand. Dig up the streets or the greenbelt? And where will it terminate in Redondo Beach or AES?
City's Obligations Following Closing: Page 9, 5.4
The parties recognize that Macpherson is materially changing its legal position and rights and property holdings in reliance upon the final and binding effect of this Agreement and any rescission of this Agreement would be a wholly inadequate remedy for Macpherson because rescission cannot possibly return to Macpherson the legal position and rights it held prior to the consummation of this Agreement Comment - We need an attorney to explain this paragraph. It's legalese is convoluted.
Mutual Releases: Page 9, 6.1
Effective upon the successful completion of the Closing in accordance with the conditions described in paragraph 3 Comment - What are these conditions in 3.3
Mutual Releases: Page 10, 6.1
the City hereby fully and finally waives releases and permanently discharges Macpherson and its respective partners officers employees agents representatives and attorneys the Releases from any claims arising under the Lease any continuation extension amendment restatement or replacement of the Lease Comment - Whoa Ho! What's this? What about compensation due the city for the past Environmental reports, attorneys fees due the city, etc? Mutual Releases: Page 10, 6.4
Except as may be provided in this Agreement each of the Parties waives any and all claims for the recovery of any costs expenses or fees including attorney fees associated with the matters and claims released in this Agreement Comment - Attorneys fees from earlier court cases? Have they been paid? Defense of Litigation: Page 11, VII In the event that one or more lawsuits are filed challenging this Agreement and/or the actions implementing or contemplated by this Agreement the Parties to the extent named as parties defendant in the lawsuit will cooperate in good faith in the defense of the litigation and shall initially bear their respective attorneys fees and costs With the exception of a lawsuit challenging the approval of this Agreement itself should the Ballot Measure described in paragraph 46a pass E&B shall indemnify the City for all attorneys fees and costs incurred by City in the defense of litigation encompassed by this paragraph and also for any attorney fees and costs awarded to a plaintiff against City if any in such litigation Comment - Does this mean the city can collect attorney fees if sued for this agreement? Representations & Warranties: Page 11, 8.1c They acknowledge that the Stinnett Well has been plugged and abandoned and agree that Csity inability to convey the Stinnett Well to E B shall not constitute a breach of this Agreement or the Lease. Comment - Dave Lucero, what was the result of your looking into this well on the City's Yard?
Representations &Warranties: Page 12, 8.2c
The force majeure provisions in paragraph 30 of the Lease apply and have applied during the pendency of the Action and the CUP remains valid.
Comment - CUP is for a "Conditional" Use Permit. The Use Permit itself was never issued, or was it? Wasn't the Fire Code in doubt? In the CUP it states, "All CUP required studies and reports must be submitted to the City and approved before permit issuance."
Representations &Warranties By All Parties Page 12, 8.3a The Parties have received all corporate and other approvals necessary to enter into this Agreement on their behalf and that the persons signing this Agreement on their behalf are fully authorized to commit and bind the Parties to each and all of the commitments terms and conditions hereof and to release the claims described herein and that all documents and instruments relating thereto are or upon execution and delivery will be valid and binding obligations enforceable Comment - Not so! The California Coastal Commission issued "approval with a long list of conditions" but never issued a "Permit" for Macpherson to drill in Hermosa Beach. So how does this affect this Settlement Agreement? Is Macpherson claiming to have abided by all the requirements of 15 b. of Lease No. 2 (it has with the City), i.e. "The Lessee shall also apply for and obtain all necessary permits from the City of Hermosa Beach...The Lessee shall also be responsible, at its sole expense, for alI necessary permits and approvals to be obtained from the California Coastal Commission...." Representations &Warranties By All Parties Page 12, 8.3d The Parties have prior to the execution of this Agreement obtained the advice of independent legal counsel of their own selection regarding the substance of this Agreement and the claims released herein Comment - Was the advice "independent"? Representations &Warranties By All Parties Page 13, 9.2 This Agreement and the Confidentiality Agreement discussed in Paragraphs 32 and 3 are an integrated contract and sets forth the entire agreement between the Parties hereto with respect to the subject matter contained herein
Comment - If the Confidentiality Agreement is part of this, please, let's have a look at it.
Representations &Warranties By All Parties Page 13, 9.5 This Agreement shall be binding upon and inure to the benefit of each of the Parties and their respective representatives partners officers employees agents heirs devisees successors and assigns Comment - How about to the benefit of the people of Hermosa Beach?
