Hermosa Beach Oil Drilling EIR Draft Discussion

Oil Drilling & Recovery Cost Benefit Analysis 

Recovery Implies That You Once Owned or Possessed Something

Costs Far Outweigh Monetary Benefits To  Few People

Air, Water, Noise Health Impacts on the Community of Hermosa Beach

Property Proximity Potential Cancer or Health Impact

Impact Areas Where Injuries Could Occur From An Explosion For Example

Since the City has not provided a proper forum for public comment.  Please use this discussion area below for commenting on the EIR.  

Protecting Communities from the Health and Environmental Effects of Oil and Gas Production

Hands Across The Sand Hermosa Beach - Saturday, May 18, 2013

Hands Across The Sand Hermosa Beach

Saturday, May 18, 2013 at 11 am

Here is video from 2010 celebrating an "oil free" town.  

Please take notice that Hermosa City Councilman Jeff Duclos is in this video.  

Jeff Duclos is also an alternate on the Coastal Commission.  

10 Reasons to Vote Yes for Measure A

10 Reasons to Oppose AES Redondo Beach Power Plant Rebuild 

1. Emissions from the new power plant would increase 700%. 
2. 6,850 students go to school within 1.5 miles of it. 
3. AES management has a horrendous track record and has been involved in several law suits and financial crisis issues including Enron.  Read this "AES Corporation: Rewriting the Rules of Management". 
4. AES's largest customer is J.P. Morgan according to the AES company fact sheet on the web site.  A bank as your largest customer?  Sounds a bit like Enron to me.  This Redondo Beach power from this plant is not needed per the CAISO and CEC reports.
5. Power plant lines bring down property values at least 25% in the Redondo Beach & South Hermosa Beach areas and block ocean views.  The power lines may go as well. This has not been studied. 
6. AES hurts the fiscal health of the Redondo King Harbor area surrounding businesses.  New waterfront developments have been put on hold because of the power plant rebuild issue.  Many new restaurants would likely follow the new Shade Hotel being built on King Harbor more money would flow to the City if the power plant was gone.  
7. Opposing it costs nothing & AES only needs the Council and others to do nothing and we all lose.  Doing nothing plays right into their hands. This is not about the future zoning of the site.  We definitely don't want a new power plant.  See map below of what this area could be. 
8. AES pays little in taxes only $385,000 / year in tax revenue to the city. 
9. AES plant borders on South Hermosa Beach and most HB residents will be affected. 
10. The loud steam blasts in the middle of the night are simply ridiculous and this beautiful park rendering (see picture below)  done by the California Coast Commission would be incredible the area. 

In a 3-2 vote, the Redondo Beach City Council decided to continue its discussion on a resolution opposing the repowering of AES Redondo Beach at the July 10 meeting. After a meeting that lasted more than seven hours until 1 am, the Redondo Beach City Council decided to delay its discussion on whether to pass a resolution opposing the repowering of the AES Redondo Beach power plant on Harbor Drive until the July 10. This will allow city staff time to hire an independent consultant to perform an amortization report on the current structure. Councilmen Matt Kilroy and Pat Aust both said they wanted to read such a report before making a final decision.  Is this just a delay tactic?  Read more on Redondo Patch and Easy Reader. 

Redondo Beach City Council 

Matt Kilory, Steve Aspel, Bill Brand, Pat Aust, Steve Diels

Hermosa Beach, Torrance, Manhattan Beach and Palos Verdes should participate as well in support of removing the power plant. NIMBY thinking and waiting is just plain lazy and stupid.  All surrounding City Council members need to work together because this is such a big issue.  Lets set politics aside and be proactive about finding a solution to do the right thing.  This is not just about Redondo Beach and we all stand to benefit with cleaner air and potentially new development that we all can use. The King Harbor area has so much potential. Its a developers "wet dream" and huge private money would follow the opportunity to create something amazing.  

It Redondo Beach City Council's job to find an alternative solution for the power plant land.  However, we all know political people are lazy and always need LOTS of "hand holding" so they feel safe. Why would City Council members be reluctant to oppose the new power plant remodel that produces a minuscule $200,000 in tax revenue per year which is less money than the city makes from its parking garage at the pier. 

Is AES threatening Redondo Beach City Council members with a law suit?  Any initiative by the city residents is not likely to provide AES with any basis to sue the city. Finally, there is an amortization process through which a city, or a citizen's initiative, can allow businesses adequate time to get a return on their investment in a property before a specific use is banned. The proposed citizen initiative would eliminate industrial uses by 2020, which I think is plenty of time (8 years) for AES to get adequate return on their investment in the property, especially considering the majority of the equipment is old and obsolete, and esentially worthless at this point.  

AES is no stranger to crisis and law suits.  In 1992, AES flirted with disaster when its Shady Point generating facility in Oklahoma was discovered to have been discharging polluted water and to have falsified the samples it provided to the Environmental Protection Agency. In the same year, AES was forced to abandon its rebuilding of a power plant at Cedar Bay, Florida following a dispute with state officials and the local community. These events caused AES’s share price to fall by half.  AES has multiple law suits against the company (see AES Law Suits) search results.  

AES is a $9 billion public company (NYSE: AES) planning to make a $500M+ investment on a power plant that might be worth an estimated $135M (comps based on AES Huntington Beach valuation performed in 2011). AES is looking to repower the plant in 2018. They are currently using the plant only 5% of the time right now, and with an investment of $630 million for a new plant, the amount of energy needed to pay back the investment will mean lots of particulate matter in the atmosphere in Redondo, Hermosa, and surrounding communities. While the footprint will be smaller (12 acres vs the current 50 acres, 4 stacks instead of 5), any chance for revitalizing the waterfront will be lost for 50+ years as no one will want to invest in the area. Here are some points and a link to FAQs Tear Down Redondo Beach Power Plant Blog:

California Coastal Commission's study for AES power plant area

Poll: Predict The Redondo Beach Measure A Voting Results

Public OpinionPoll Results

For more details on the Redondo Beach Measure A see NoPowerPlant.com.  If you live in Redondo Beach vote on March 5th.  

Oil & Gas Drilling Time Lapse Video

Does Oil & Gas Drilling Belong In Hermosa Beach, California?

Public OpinionPoll Results

The Hermosa Beach Oil Settlement Agreement is Not Legal

Why has no one on the City Council read the Macpherson mock jury trial documents or transcript?  The threat of bankruptcy was the basis for was for a $17.5M settlement and extortion vote and no one has read the documents?

Before you read this you should review the contract agreement comments. In a properly negotiated & compromised settlement agreement, "neither party should be happy"with the outcome.  In this settlement agreement Hermosa Beach tax paying residents lost while the lawyers, City Council and oil won regardless of the outcome of the vote.  Here are some very important questions for our proud elected officials: Council Member Patrick (Kit) Bobko, Hermosa Beach City Attorney Michael Jenkins and Michael Divirgilio.

Drilling Down Article 

1)  If there was such a real likelihood that Macpherson Oil would win a court award for HUNDREDS OF MILLIONS OF DOLLARS ($750 million,), then why did Macpherson Oil settle for a mere $30 Million or 4% of his asking price?   Did Macpherson believe that, even if they won the jury trial, they would likely receive substantially less than $30M, or probably even NOTHING (see below)?  

2)  Was the 1995 “STOP OIL” ELECTION FLAWED because the “City Attorney (Jenkins) Impartial Analysis” in the election pamphlet failed to advise/warn voters of the real possibility of a Breach of Contract lawsuit to recover POTENTIAL LOST PROFITS? Were Hermosa Beach voters properly informed about the potential consequences, including tremendous financial liability, of the Proposition E vote in 1995? What law firm was providing City Attorney services to Hermosa Beach during this decade/period of time? Weren’t Bobko and Jenkins both employees of this same law firm - Bobko's current employer RWG Municipal Law Firm (of which he is now a Partner)?

3) Until 2001, Hermosa Beach City Attorney services were being provided by (Bobko’s & Jenkin’s) RWG Municipal Law Firm, represented by RWG Employee Michael Jenkins. From 2001 and onward, Michael Jenkins law firm began providing City attorney services to the City, including providing oversight services on the law firms defending the City from the MacPhersson lawsuit.  After the MacPherson lawsuit was filed, why didn’t RWG admit there had been and omission/error, and advise the City to hold a new election? (The 1995 measure passed by a mere 565 votes). Why didn’t Jenkins (after he/his law firm began providing City Attorney services to Hermosa)? Why didn’t Bobko (after being elected to the City Council)? 

4)  Could damages even be awarded to MacPherson by a jury (under directions provided by the presiding judge) due to failure of Macpherson Oil to make reasonable efforts to “mitigate damages” over the past 15+ years, as required under California law, by insisting on a new vote with a new proper City Attorney Impartial Analysis?  Did Macpherson sue because he could NEVER meet the TERMS & CONDITIONS of the LEASE imposed by the Coastal & State Lands Commission?  Did Hermosa Beach trial lawyers including Michael Jenkins purposely ignore evidence that could have won or minimized damages?  

5) Because of Bobko's associations with RWG Municipal Law Firm and Michael Jenkins, did Councilmen Bobko have a “CONFLICT OF INTEREST” in negotiating and voting on the settlement agreement? Shouldn’t Bobko have RECUSED himself, as required under California law from all such activities.  Has Bobko violated the Brown Act?  

6)  Are these the reasons the Settlement Agreement was negotiated by Bobko in secret, and voted upon behind closed doors without public participation? Was Bobko just protecting the reputation of this law firm, and his friend Jenkins, to the detriment of the City? Why was the settlement agreement not discussed in public BEFORE City Officials signed the contract with a new 3rd party E&B before the scheduled jury trial in April of 2012? Don't neighbors heavily impacted deserve "a say" in that their property and lives could be heavily impacted? - That seems to be normal business practice with Tattoo parlors or new bars, etc

7) Is this the reason that this behind the closed doors settlement includes a requirement that the 1995 "Stop Oil  election be held again"?  By wiping out all City reserve funds if not passed. Are there also other implications with regard to attorney "errors and omissions"insurance and possible reimbursement to the City for its approximately $4M in legal defense costs?

Continue to read a list of more questions that need answers.

Oil Pipeline through Redondo Beach to Torrance Exxon?

Hermosa Beach Pipeline to Exxon Torrance Through Redondo Beach

I guess Stop Oil Hermosa Beach just enlisted the help of 200,000 more people from Redondo Beach and Torrance who could feel the impacts of the proposed oil project.

Of course this was one of the last document posted on the Hermosa Beach E&B website.  Why would safety, noise or toxic air quality concern anyone from an oil company because they say everything is sooooooo safe?  E&B has minimized the safety impacts of this project and we plan to expose every last detail of facts they leave out.  Of course all the documents are posted as PDF and not searchable.  Its only 1000 pages to read.  However, feel free to start reading the noise impact study here.

E&B seems quite proud of their aesthetic renderings for the proposed drilling site.  However, there is no way to draw the winds or the toxic air we are going to be breathing.  I don't think anyone really cares how it looks when toxic air could be blown downwind to thousands. 

Hypocrisy of Councilmen Kit Bobko & Michael Divirgilio

Listen to Hypocrites Bobko & Divirgilio Rant About Transparency

Smart financial move - Beach Reporter Letter From Howard Longacre - October 18, 2012

During the Oct. 9 Hermosa Beach City Council meeting, all concerned had to again endure the self-righteous, condescending, bullying insults and obstruction from Councilmen Michael DiVirgilio and Patrick Bobko regarding a revised banking relationship with the Bank of America.

These two sneaky councilmen owning no property, home, or business in Hermosa Beach, having no historical roots in the South Bay, having both moved and rented units here after briefly renting in Redondo (obviously to use Hermosa Beach for their political self-aggrandizement) have both, more than worn out their welcome.

DiVirgilio and Bobko's badgering questions and ridicule on Oct. 9, nauseously mocked a well-researched revision to the long-neglected banking contract. Hermosa Beach will now see its present $24,000 yearly banking charges completely eliminated. And additionally with new cash credits to be received into Hermosa's account; a net savings to Hermosa's treasury of over $140,000 during the next five years, and without a necessity of expending $75,000 to change banks.

DiVirgilio and Bobko insulted virtually everyone with their pre-planned, disgusting and despicable attacks. They seemingly even elicited an Executive Director of the Hermosa Beach Chamber of Commerce (conveniently a local officer of a banking corporation appropriately rejected from consideration) to complain at the meeting.

DiVirgilio and Bobko's attempt to deceive and manipulate the minds of the public and press with their disingenuous drivel regarding "transparency" and process, was just more illustration of their increasingly offensive and self-serving behavior that wastes and disrupts council meetings costing several thousand dollars per hour.

Much appreciation for this successful new banking contract belongs to Mayor Jeff Duclos, Councilman Peter Tucker, Councilman Howard Fishman, Interim City Manager John Jalili, City Manager Tom Bakaly, the city's finance department staff including the deputy city treasurer, and especially City Treasurer and the financial officials of neighboring cities and agencies who freely gave of their expertise and wisdom.

Howard Longacre 

Bobko and Divirgilio are the same two guys that negotiated (without a public hearing) a deal that is not legal and they have conflicts of interest along with other City officials.  The hypocrisy of Hermosa Beach City Councilmen Kit Bobko and Michael Divirgilio is appalling.  Only 1 only company bid on the deal and they made the city borrow $17.5M with no public forum or RFP. A grand jury needs to investigate what is behind their confidentiality agreement. This video is from the Octorber 9, 2012.  Read more on the top reason this is a bad oil deal for Hermosa Beach.

The City Treasurer was anything but nontransparent taking bids from 19 banks and shared it with the public?   You took a bid on the oil deal from a friend Gary Brutcsh who sourced the deal to you?  Transparency?  Your untrustworthy voting record also speaks for itself.

Request for Open Forum to Discuss Illegal Deal Denied

Its a Legal Issue and Not a Voter Issue

Hermosa Beach City Council Voting Record

Hermosa Beach City Council Voting Record

Kit Bobko & Michael Divirgilio are the dissenting votes or absent for all of these City Council Meeting votes?  

1)  Voted 3-2 No on Outsourcing Parking Meters

2)  Voted 3-2 Yes Hiring Tom Bakaly as new City Manager

3)  Voted 3-2 Yes to Ban Polystyrene
4)  Voted 4-1 Yes Banning Smoking on Strand & Pier Plaza
5)  Voted 4-0 Yes (Bobko Absent) Banning Smoking on Beaches
6)  Voted 3-2 Yes Approval of Bank of American Banking contract
6)  Voted 3-2 No Suspend City Treasurer Cohn who was a victim of extortion.

Oil Drilling Settlement Negotiations

The City Council seems to have a clear divide on most voting issues in recent months as described above.  However, I often have to scratch my head to understand the logic behind some of the dissenting votes in recent months.  Bobko and Divirgilio are clearly working as a team and it all seemed to culminate immediately after both launched a PR campaign to promote their oil settlement.  The big question is:  Why were the two of these guys negotiating our oil settlement deal together?  Shouldn't they have had Duclos, Fishman or Tucker in the room negotiating? Neither Bobko or Divirgilio own a home in Hermosa Beach.  It would have been impossible for a third City Councilman to participate in the negotiations because it would have been in violation of the Brown Act.  Were the residents represented properly?  I don't think so.  What business, lobbyists or people are motivating these two individuals to make make their voting decisions or press their unpopular agendas?

Outsourcing Parking Meters vs Replacing With Credit Card Machines

I think many residents who are disappointing about the City not even considering outsourcing are missing the point of Duclos, Fishman and Tucker voting no.  However, the City can always outsourcing at any point in time but lets take some baby steps and install credit card machines that we own first.  Some of the high salary and union problems might naturally go away over time.  90% of the problems can be solve by installing credit card machines and that does not require outsourcing.   The City currently collects $2.5M per year from coins and who knows we might be about to double this to $5M simply by putting in credit card machines and managing the price per spot during peak hours.  What if we charge $5 per hour for parking near the pier during peak hours.  Hint, hint . . .  this might control some of the alcohol related problems of people flooding into our city.  Controlling our own meters with credit cards is not that hard and Manhattan Beach has already demonstrated they can do it profitably.

Kit made faulty parallel assumptions that it works for Newport Beach, why not in Hermosa?  His PR was recognized in the national media blaming $100,000 meter maids as the problem?  Why did Kit conveniently leave out that installing credit card machines would have $0 cost to the city and would be profitable immediately.  This does not require outsourcing.  So, what his suggestion to outsource politically motivated or does he have the best interest of our city at heart?  Does he or his law firm RWG have any political ties to the large outsourcing firms that manage parking meters?  Does Kit once again have a conflict of interest he would like to explain?  Was he motivated to get a "deal" in return for some political donations down the road.

Kit routinely makes statements and negotiates deals that are not backed with any financial analysis.  Kit also does not appear to see the big financial picture or have a cohesive fiscal strategy as it relates to the affect on the community.  Kit is not a property owner and has no skin in the game.  He simply seems to look for revenue opportunities or ways to save money to further his political platform.  I wish Kit would simply more rational decision based on what is right for the community and not based a political ideology.  I am a conservative voter and thinker myself, however, I don't agree with much Kit's thinking or ideas as they pertain to what is best for our community.   

Councilmen Howard Fishman said the city should move immediately on replacing coin-operated meters with credit card parking meters to solve 90% of the problems. City Treasurer wrote a memorandum to the council encouraging the installation of credit card-accepting meters as other municipalities have done in order to increase funds and efficiency.  “With credit card meters, revenue goes up overnight,” Pete Tucker said.   Former Police Chief Greg Savelli, who now runs the parking enforcement department of the Los Angeles Department of Transportation, also spoke against outsourcing, saying the service the officers provide “goes beyond the balance sheet.”

“What we have now is fantastically expensive,” Kit Bobko said who seems adamant about cutting costs and saving money no matter what the outcome.  Outsourcing to save money or outsourcing to generate (oil drilling) is going to be a common platform for Kit to propel himself to a higher political office.  Kit gave no credible financial arguments justifying his outsourcing position.

Hiring Hermosa Beach City Manager Tom Bakaly

"First, let me say that I think without question that Tom was an impressive dude, and I think that he provides a lot of earned and demonstrated skills that meet our needs and that match quite nicely with our uniqueness," said Councilman Michael DiVirgilio.  Council votes 3-2.

"In Hermosa Beach, we're whistling past the graveyard because we are not having any financial troubles yet,” Bobko said. “We weren't going to stand firm and ask of our leader, the person who is in charge of our city's staff, to do what we want the staff to do, which is to pay for his own first contribution. That is deeply disappointing and I think a failure of leadership for this council…

I don't think either of these guys have much experience running a business or hiring and firing people.  My philosophy has always been to hire the best CEO you can get and pay him top dollar.  There are a lot of problems in the City right now and we need a strong, competent, financially oriented person to do the job.  I am confident Tom Bakaly was a great hire and will help turn the City around that has been neglected in many areas.

Banning Polystyrene in Hermosa Beach

Bobko and Divirgilio have been routinely voting together.  Bobko is a Registered Republican and Divirgilio seems to be a Democrat having worked for Jane Harmon.  However, the two of them seem to be singing to the same song when it comes to local voting matters.  They also don't seem to be able to sway the other 3 council members very often on their views.  Both Bobko and Divirgilio were dissenting votes (3-2_ as well on Hermosa Beach polystyrene ban.   This was shocking since Michael Divirgilio once led the Green Task Force in Hermosa Beach and pounded the table in his campaign about a City that needs to become "carbon neutral".

Banning Smoking on Strand, Pier Plaza & Beaches

It goes without saying who was the lone voter in the 4-1 vote to ban smoking on the Pier and Stand. Kit Bobko does not support banning smoking on the Pier or Strand.  Kit Bobko was also conveniently absent for the 4-0 that banned smoking on the beaches.  Does he have your health at interest or his political views?

Hermosa Beach Renegotiates Banking Contract First Time Ever Recorded

Bank of America has been the Bank of Hermosa Beach for over 40+ years. It would have cost the City over $100,000 to change banks.  Also, Treasurer Cohn renegotiated the current contract for the first time ever and was not touched by John Workman prior Treasurer.   Hermosa Beach was paying $24,000 per year in banking service fees and a $28,000 rebate?

Bobko and Divirgilio Accuse Treasurer Cohn of Sloppy Non-Transparent Work?

Sloppy?  Transparency?  Do Mr. Divirgilio and Mr. Bobko have a personal issue with Treasurer Cohn?  Aren't they being hypocritical about the City Treasurer lacking transparency in the bank bidding process of 12 banks? Correct me if I am wrong but you are the same to 2 councilmen that negotiated a $17.5M settlement with any transparency and 1 oil company? They seem to think the backroom oil deal is justified because of the ongoing litigation but you did brought in a 3rd party without any bidders. Their lack of due diligence and transparency on this deal is appalling and speaks for itself. We are talking about saving money in a banking relationship of $50,000 per year in banking fees vs a $17.5M check they wrote without any bidders while jeopardizing the health and safety of its citizens. I think the two of them have some explaining to do.  Their hypocritical voting record speaks for itself.   E&B loaned the City of HB $30M to settle the lawsuit with Macpherson. How many companies got to bid on this? Only 1 company sourced by Gary Brutsch and Michael Divirgilo and Kit Bobko. Why doesn't the LA Times investigate this?

What is an Environmental Impact Report (EIR)?

Hermosa Beach is about to begin the Environmental Impact Report (EIR) process and its important that you know what it is, the timing, costs, players, politics & process.  An EIR is the planning document which describes the environmental impacts associated with a oil drilling project.

17 Environmental Impacts

The EIR will analyze 17 different environmental impacts and will determine which ones are significant. Aesthetics, Agricultural resources, Air Quality, Biological resources, Geology and Soils, Greenhouse Gases, Hazards, Hazardous Materials, Hydrology and Water Quality, Land use and Planning, Mineral Resources, Noise, Population, Real Estate, Public Services, Recreation, Transportation and Traffic, Utilities, Mandatory Findings.  It also describes mitigation measures to reduce the impacts to an appropriate or acceptable level.

Planning Commission & City Council

The information within an EIR allows the decision-makers (the Planning Commission and/or the City Council) to make an informed decision when considering whether or not to approve a project. The report also assists with deciding if approval conditions (entitlements) are necessary. The ultimate decision to approve a project, however, remains with the decision-makers. When the Planning Commmission or City Council approves an EIR, it is simply an acknowledgement that the EIR is true and accurate. It is only a step towards project approval, not a guarantee. The Planning Commmission or City Council may decide to instead decide to approve or deny the project based on overriding considerations. For example, the Planning Commission may find that a proposed project may provide monetary benefits to a community that don't outweigh a problems identified in the EIR, such as unsafe air quality, heavy truck traffic & real estate price decline that will negatively impact property tax revenue.

Public Review

There may also be one or more meetings about the report, either as a separate meeting or as an item in a Planning Commission agenda. Note that approval of the environmental impact report does not mean that the project is approved. Once the report is approved, decision-makers review the project, taking into account the information in the report and other considerations. The public has an opportunity to review and provide comments on a draft of an EIR by contacting, in writing, the planner listed on the EIR. Public input is then included in the EIR, and considered by the decision-makers along with other aspects of the report.

EIR Project Managers

The Hermoa Beach City Council approved a contract with Ed Almanza & Associates, a Laguna Beach firm, to serve as the project manager.  However, there is no public information on this firm available on the internet as of today which is concerning.  The firm will oversee the city’s review of the proposed project at large. The Council also approved a consulting contract with former City Manager Stephen R. Burrell.

Opinion:  "Can Voters Rely on an EIR to Make a Voting Decision?"

It is important for the entire South Bay to understand this will be the 4th time in 80 years that Hermosa Beach has been faced with an oil drilling ballot measure. Hermosa Beach overwhelmingly banned oil drilling in public votes in 1932, 1958 and 1995. An Environmental Impact Report (EIR) will address many aspects of this process, but it will never fully disclose all the damage that oil drilling will bring about in a town 1.3 miles square. Our position as a great area to live will be severely tarnished. These safety and environmental damage resulting from oil drilling will effect generations to come.

An EIR is supposed to be a thorough analysis of: Air quality, Biological resources, Geology and soils, Greenhouse gases, Hazards and hazardous materials, Hydrology and water quality, Land use and planning, Mineral resources, Noise impact, Population and housing, Public services, Recreation, Transportation and traffic, Utilities & any other Mandatory findings of significance like real estate values. Upon the completion of the EIR, a thorough examination of the safety risks will be necessary as it was in the previous MacPhearson oil drilling project. A report like Bircher Report (safety study), which was done in relation to the MacPhearson project, will need to be done.

Its too complicated for the voters to rely on an EIR alone.  Its too complicated and does not address safety to the residents.  An EIR is meant to simply figure out how a project could get approved. Don't be surprised to see this EIR analyzed and separated by parts to make the environmental impacts appear smaller and insignificant to residents. It’s very important that the City Council get a report similar to the Bircher Report to fully understand the risks these kind of project present.

Hermosa Beach has been down this road before and completed an Environmental Impact Report for Macpherson Oil in the 1990's at this exact location. The City Council elected at that time showed great care and diligence in their decision making. They commissioned the Bircher Report and reviewed the EIR and concluded that it was unsafe and the air quality impact would have been too harmful on residents. Three City Council members Sam Edgerton, Julie Oakes and John Bowler unanimously agreed that to not proceed with oil drilling after reviewing all the findings. They felt that the safety risks were too great to allow the oil drilling project to proceed.

We need the EIR to be interpreted by professionals who will take into account the same safety issues our 1990 City Council had to. Our current council chooses not to heed this previous unanimous vote of their predecessors. It is unknown if they even read the prior EIR and related safety reports before agreeing to this settlement arrangement. The current city council viewed the outcome of a jury trail too risky and unlike our 1998 city council they put the citizens at risk, or in this case obviated the due diligence of a complicated project into a political vote where safety arguments and facts might get lost in the rhetoric..

Former City Manager Steve Burrell Unretires to Manage Oil EIR

Steve Burrell's Retirement Party Two Months Ago April 5, 2012

At the May 22, 2012 City Council Meeting, City Officials are set to approve a Professional Services Agreements with Ed Almanza & Associates and Stephen R. Burrell for consulting services to augment staff in processing land use entitlements and an Environmental Impact Report in connection with an oil drilling project.

Here is a letter to the City Council regarding this consulting agreement from long time resident Barbara Guild who beat oil drilling in 1957.  Barbara Guild has also done an extensive review on the agreement signed by Hermosa Beach and suggest that you read her oil agreement comments here.

Barbara Guild's Letter to City Council of Hermosa Beach

Dear Mayor Duclos, Councilman Fishman, Councilman Tucker, Councilman DiVirgilio, Councilman Bobko,

STOP and THINK before you go forward tonight and inappropriately approve not one, but two of the following items:  “Agreements for Consulting Services to Augment Staff in processing Land Use Entitlements and an Environmental Impact Report in Connection with an Oil Drilling Project.” DO NOT VOTE FOR THESE TWO AGREEMENTS!!! 

I have lived in Hermosa Beach for 64 years, and I am very interested in maintaining the flavor as well as the environment of our city. I actively defeated the Shell Oil Co. in their proposal to drill for oil in our tidelands in 1957. And I spoke to the Council, March13th, following the signing of the current agreement with E & B, where I stated that we are now starting with a clean slate and must realize this fact. 

The people of Hermosa Beach should be allowed to know which firms are bidding for the opportunity of preparing the necessary Environmental Impact Report. It should not be given to the first group that comes along. Allow those of us who are most interested in protecting our environment to come up with suggestions of who to engage. We have many environmental issues that need addressing, and a two-man group from Orange County, with no office on record, only a P. O. Box, should not be signed up without further consideration and public input.

The Settlement Agreement you signed, March 2, 2012, limits, to $50,000, the amount of money E & B will provide to reimburse the City for only these THREE items from (Paragraph 4.4 a):

1) The EIR,

2) The CEQA 

3) The Election to rescind the Oil Drilling Ban.

Former City Manager, Steve Burrell could earn $168,000 for each fiscal year (plus expenses), and the preliminary estimate for Almanza & Associates is $138,000. This would leave nothing to pay for the election, if it’s ever called.   Do you really think that E & B is going to pay for the contracts you might sign tonight? Please seriously consider your vote!

Yours sincerely, Barbara Guild

P.S. Here is Paragraph 4.4 of the March 2, 2012 Agreement the City made with E & B:

4.4 a. E & B’s Obligations Following Closing a. Reimburse City for the cost of preparation of an environmental impact report or supplemental environmental impact report (EIR) pursuant to the California Environmental Quality Act (CEQA) based on a Project description provided by E & B, should such an EIR be prepared and the cost of conducting a special election NOT TO EXCEED $50,000 as provided in Paragraph 4.6 (a). (Emphasis added). We are concerned why the city staff would need "assistance with processing the development application and other necessary entitlements" since this is a technical and straightforward procedure that shouldn't require a specialist consultant to accomplish. Unfortunately, Mr. Burrell placed a political cloud over his head by choosing to retire when he did. Had he stayed on longer, this contract would not be necessary. Although the city is not paying for his services, it has the appearance of double-dipping. Those opposing oil development will make hay of this which may very well distract from the serious issues of determining the safety of this project and proposed financial return to the city.

We would like to hear some details on why these people were chosen and what their qualifications and expectations are.  This comes from City Officials like Michael Divirgilio who is sounding the horn on more public transparency which I think is good.  Some questions I have for these individuals:

1) What are the details of this consulting agreement?

2)  How much are they getting paid and by Hermosa Beach?

3)  What is their history with the project, E&B, oil or lawsuit?

4)  What is their professional experience managing processes like this?

5)  Do Steve Burrell or Ed Almanza have any conflicts of interest?

6)  How will this facilitate the promise from City Council about making the EIR process public?

7)  Are any city residents involved in the EIR process?

8) Why are the we, the citizens, paying for this? Why isn't this cost being underwritten by the oil company? Or are we concerned that if they pay for it we won't get legitimate answers?

Please add your comments here. 

Michael Divirgilio's Beach Reporter Letter

Michael Divirgilio's Letter to Beach Reporter & Easy Reader

Transparency Needed

Michael Divirgilio

As a public entity, the City of Hermosa Beach goes to great lengths to publicize its decision making process whenever outside vendors are hired or public money is spent. We do everything possible to demonstrate what we are doing and have public discussions about why we are doing it. We did this for Pier Avenue street repairs and before building beach restrooms. We did it before hiring a website designer and we’re doing it now as we hire a waste hauler. We do it every time.

During last week’s City Council meeting I proposed implementing the same process as we begin hiring a new bank. Of all the things we should evaluate publicly, this seems like the most obvious since our banks will hold millions of dollars of the city’s money.

Only Councilman Kit Bobko thought this was a wise idea, keenly suggesting that what we needed in this process was “transparency.” Alarmingly, none of my other colleagues on the City Council were interested in public review or debate on this issue.

No doubt, we should have instituted this level of oversight a long time ago. But nonetheless, now that my proposal failed, it means our next bank will be evaluated and hired by one person: our new city treasurer, behind closed doors, without public input, without City Council oversight. The city’s funds will move from bank to bank without any oversight or public review at all. This is not how we do business in Hermosa Beach.

This is public money. A city treasurer is a public official, acting on the public’s behalf. No matter who the person, it is neither prudent nor responsible for a single individual to make financially driven decisions like this. The public and City Council should be involved at every step.

As your city councilman I will do everything possible to bring these background details to light and create standard operating procedures moving forward.

I was recently inspired by a Hermosa resident and Los Angeles Times reporter who won the Pulitzer Prize for breaking the Bell, California, salary scandal. He set a new standard for government transparency across the country.

Let’s show the same kind of leadership by setting a new standard for transparency in Hermosa Beach.

Michael DiVirgilio

Dangers to Hermosa Beach Residents if Oil Drilling is Permitted

Toxic Pollutants Released During Oil & Gas Drilling

Here are just some of the risks sited by the California Coastal Commission in 1992 for the proposed Macpherson slant oil drilling project that was blocked by a resident revolt.  Read the summary of the seven major risks addressed by the full California Coastal Commission detailed report.  Its important to note that none of these issues can be fully mitigated by new technology as E&B Oil will likely claim.  There are other risks associated with the project. 

E&B Natural Resources Sign at Site in Long Beach

#1)  This is an actual sign from E&B's drilling site in Long Beach, CA.  The previous applicant (Macpherson Oil) proposes to locate a hazardous oil and gas industrial development in a fully developed urban area with nearby residences.  Commission staff did not believe the applicant  had fully analyzed the potential worst-case accidental release of hydrogen sulfide (see Wikipedia definition) that might occur. In addition, some nearby wells have historically produced significant amounts of hydrogen sulfide. As a result, the applicant agreed to fund an independent, third party review of its hazard risk analysis. The consultant, Arthur D. Little, Inc., working under the direction of Commission staff, determined that hydrogen sulfide, an acutely toxic gas, could be encountered during drilling and/or production and could pose a significant safety risk to offsite populations. Hydrogen sulfide is lethal within a few breaths at concentrations of 1,000 parts per million (ppm), and kills within ½-hour at concentrations of 300 ppm. Injuries may occur at lower concentrations and occupational safety standards are triggered at 10 ppm.  

#2) The project poses a risk of fire and explosion. 

#3) Methane Gas Leaks & Explosions - Cause of BP Oil Spill

#4)  Withdrawal of reservoir fluids and associated changes in reservoir pressures may lead to subsidence. Subsidence of the nearshore area could lead to changes in beach profiles and result in loss of sandy beach. Subsidence can also cause increase seismic activity. 

#5) Re-injection of produced fluids poses a remote risk of increased earthquake activity.

#6)  Project-related operations could result in an accidental oil spill from the production facility/drilling site (a maximum 2,800-barrel spill), a tanker truck (a maximum 175-barrel spill), and/or a pipeline (a maximum 141-barrel spill).

#7)  I think this signs from E&B Oil explains our spilling concerns. 

#8) Reduction of clean air to breath.  Don't believe the lies that it won't stink.  

#9)  Drilling and well work-over activities require a  75 to 135-foot tall drilling rig which (a) contrasts sharply with existing neighborhood building heights, (b) will be somewhat visible from several coastal public viewing areas, and (c) isincompatible with the low-profile visual character of this beach community.  Apparently E&B Natural Resources will be proposing a smaller drilling rig. 

#10)  The applicant proposes to remove 12 parking spaces, six of which are Public Access currently available to the public on weekends for beach access.

Steve Layton's Oil Spill in 1998 as CEO of Equinox Oil

Oil Blowout Covered 2 Square Miles

In 1983, Mr. Steve Layton co-founded Alma Energy and Equinox Oil with his father and Mike Galesi. He served as President of Alma and Equinox from 1997 to 2000. In November 2000, Francesco Galesi purchased the Alma and Equinox assets out of bankruptcy after an Equinox oil spill and formed E&B Natural Resource Management Corporation. Mr. Layton was retained as President of E&B.

Steve Layton was CEO of Equinox Oil when on September 22, 1998, oil blowout occurred from a well owned by Equinox into the waters of Lake Grande Ecaille, in Plaquemines Parish, coastal Louisiana. A blowout is the uncontrolled release of crude oil and/or natural gas from an oil well or gas well after pressure control systems have failed.  This management failure should not be ignored by Hermosa Beach residents because it is not too dissimilar to lack of management oversight in the BP Gulf Oil Spill.   

The exact volume of oil discharged is unknown, but estimates range from less than 450 bbl to 1,500 bbl.  The oil was discharged in a jet that shot straight up approximately 200-300 feet into the air along with natural gas, produced water, and sand.  The blowout continued for approximately 11 hours, at which point the discharge was stopped.  Several thousand acres of surface water in Lake Grande Ecaille, as well as the Gulf of Mexico, were covered by slicks or sheens from the incident, and approximately 1,233 acres (2 square miles) of wetlands (Hermosa Beach is 1.3 square miles) were exposed to oil.  Soon after the massive Hurricane Georges passed near the area four days later on September 26, 1998, causing the response efforts to be suspended effectively letting the company off the "cleanup hook".  However, 33.8 discount acre years of marsh was lost.  Read about the environmental damage from Steve Layton's oil spill.

Mr. Steve Layton received a warning letter on August 13, 1997 from the Department of Public of Health & Human Services of safety violations.  Was this related to the lack of management oversight?

Chapter 11 bankruptcy of Equinox Oil Company Den norske Bank, ASA, individually and as agent for BNP Paribas and Comerica Bank - Texas (the Bank Group) loaned over $106 million to Equinox and Alma.  

Equinox Oil Company Oil Spill Damage Assessment, Restoration Plan & Environmental Assessment Prepared by:
Louisiana Oil Spill Coordinator’s Office/Office of the Governor
Louisiana Department of Environmental Quality
Louisiana Department of Natural Resources
Louisiana Department of Wildlife and Fisheries
National Oceanic and Atmospheric Administration
United States Fish and Wildlife Service

LIST OF PREPARERS
Chris Piehler Louisiana Department of Environmental Quality
John de Mond Louisiana Department of Environmental Quality
Derek Hamilton Louisiana Department of Natural Resources
Dick Stanek  Louisiana Department of Natural Resources
Heather Finley Louisiana Department of Wildlife and Fisheries
Jim Hanifen Louisiana Department of Wildlife and Fisheries
Terry Romaire  Louisiana Department of Wildlife and Fisheries
Gina Muhs Saizan Louisiana Oil Spill Coordinator’s Office, Office of the Governor
Chuck Armbruster Louisiana Oil Spill Coordinator’s Office, Office of the Governor
Cheryl Brodnax National Oceanic and Atmospheric Administration
Linda Burlington National Oceanic and Atmospheric Administration
John Iliff National Oceanic and Atmospheric Administration
John Kern National Oceanic and Atmospheric Administration
Tony Penn National Oceanic and Atmospheric Administration
Christy Poulos National Oceanic and Atmospheric Administration
Buddy Goatcher United States Fish and Wildlife Service
Warren Lorentz United States Fish and Wildlife Service

How is Fracking Different from Oil Drilling?

How is hydraulic fracturing different from drilling for oil? And why is it called 'fracking'? CNN explains it to you.  CNN Explains.

The Environmental Protection Agency's new air pollution rules for the oil and gas industry may seem like odd timing, as President Obama has been trying to deflect Republican criticism that he overregulates energy industries. But the rules weren't the Obama administration's idea.  How a 'Western Problem' Led to New Drilling Rules.

Listen to this when you consider that E&B Oil wants to drill 30 wells in Hermosa Beach.  30 wells getting well completion in our neighborhood would horrendous.  The EPA has proposed new rules to control the problem but does this apply to slant oil drilling?

The fact that the EPA has acknowledged drilling is making people sick is a strong argument against doing so in the midst of a residential neighborhood, like Hermosa Beach. "The EPA says all of that drilling sends significant amounts of pollution into the air, contributing to smog and making people sick."

Settlement Agreement Comments

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?

(stay tuned more to come)