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.

Carpinteria Oil Drilling Initiative Defeated

Carpinteria Oil Drilling Initiative Defeated, Measure J (June 2010)

Yes: 944 (29.94%)

No: 2,209 (70.06%)

Measure J (Venoco's Oil Drilling Initiative) from Ted Rhodes on Vimeo.

A Carpinteria Oil Drilling Initiative was on the June 8, 2010 ballot in the City of Carpinteria in Santa Barbara County, where it was defeated. The primary effect of Measure J would have been to approve a slant oil and gas drilling project proposed by Venoco Inc. along Carpinteria’s coastline.  Real estate values were projected to decrease 10-15%.  Please read the Carpenteria Environmental Impact Report (EIR) which reveals some scary facts. 

Posing as a so-called "people's" initiative, Measure J was an attempt by Venoco to bypass local city government review and oversight. As the only donor to the pro side of the ballot measure, Venoco spent well over $600,000 – compared to $80,000 spent by Citizens CAP (Committee Against Paredon Initiative) that was raised from hundreds of individuals – trying to convince the voters of our small town as to the benefits and safety of their proposed massive oil drilling Paredon Project and why Venoco should be allowed to bypass all the local rules and regulations everybody else in Carpinteria needs to follow. Read more details here.

	MEASURE J: Shall the General Plan/Local Coastal Land Use Plan of the City of Carpinteria be amended and a Specific Plan adopted to authorize development of the Paredon Project, a private development project to explore, develop, produce and gather offshore and onshore oil and natural gas resources and transmit them to the Carpinteria Oil and Gas Processing Facility operated by Venoco, Inc.?

Hermosa Beach Slant Oil Drilling Maps

These maps are speculative drawings based in information we have gathered from the Macpherson proposals.  E&B oil has not submitted their drilling proposal yet.  

Map of the proposed Hermosa Beach slant oil drilling site will reach out into the ocean.  What is slant oil drilling?  The drilling will also go underground into Redondo Beach likely.  The California Coastal Commission has full authority of this drilling and has thus tidelands restrictions on where money from oil can be spent.  The oil site will also be less than 100 feet from homes when Colorado requires a 350 foot setback and California recommend 300 feet.

Do we really know what is underground nor want to disturb the environment with oil drilling pipes possibly poking through the ocean floor?  Do want want to risk the dangers of the ocean floor and our beaches sinking (subsiding)?

The proposed drilling site effects more than 50% of residents of Hermosa Beach.  Noise, air pollution, explosions or dangerous gases are all a potential consequence.  Not to mention the drilling site will be within a few hundred yards of your kids playing in the park.  If you run on the greenbelt in Manhattan Beach or Hermosa Beach there could be an oil pipeline to under it to Chevron Refinery in Torrance and/or a natural gas pipeline AES Power Plant in Redondo Beach.

Lets not forget about the fault line that runs across the Santa Monica Bay and the South Bay.  We have had several earthquakes offshore in Hermosa Beach and Santa Moncia bay in the past few years. 

 27 oil wells and 3 water injection wells for Fracking and Natural Gas

Horrible Air Quality

I am told by oil experts in the business that the odor from gases and drilling will be "awful" around the site.  There is no way to contain the odor or poisonous gases that come up our of the ground.  This map depicts 3 different wind scenarios we get in the area.  An onshore, offshore and no wind where the smell and gases get trapped in the valley.

Emissions generated during the drilling/development phase include vehicle emissions; diesel emissions from large construction equipment and generators, storage/dispensing of fuels, and, if installed at this stage, flare stacks; small amounts of carbon monoxide, nitrogen oxides, and particulates from blasting activities; and dust from many sources, such as disturbing and moving soils (clearing, grading, excavating, trenching, backfilling, dumping, and truck and equipment traffic), mixing concrete, and drilling. During windless conditions (especially in areas of thermal inversion), project-related odors may be detectable at more than a mile from the source.  Excess increases in dust could decrease forage palatability for wildlife and livestock and increase the potential for dust pneumonia.  See source.

250 Yard Heavy Impact Zone from Noise, Odor, Dangerous Gases and Explosions.   There are two parks, hundreds of homes and a jogging trail in the vicinity which I think is disgraceful.   There are probably 10+ kids under the age of 10 years old that live in the red boxed area.  Its just sad that no one thought through the ramifications.  

Projected Ripple Affect of Real Estate Losses

This is a Scenario of What Could Happen

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Reasons Why E&B Oil is a Bad Deal

Based on my discussion I think the deal the Hermosa Beach City Council struck is a bad one for several reasons. The only good news is we have an actual $ settlement number and its not going to bankrupt the city. Here are my top 10 talking points to be used with anyone you know.

1. No public forum was held.  Only 1 company (E&B) bid on the deal behind closed doors. 
2. The oil site will be within 100 feet of homes and businesses.  California recommends a 300 foot  setback and Colorado law requires 350 feet setback.  
3. $1B destruction of real estate values for a new police station or new storm drains on the beach? 
4. Santa Monica Bay is a no-drill sanctuary (Hermosa drilling map). 
5. State Lands Commission Staff recommended against this Oil Drilling project because it expected poor results.
6. Hb cannot use any of the money shared "net revenue" NOT gross for anything that is not on the beach or greenbelt.  See Tidelands Act. 
7. City Council “settlement” is a collective punishment for citizens daring to reject their plans for siting an industrial project next to homes. 
8. Schools won’t benefit much if at all from drilling.  The .20 cents per barrel for the school system was a horrible deal struck in 1990's. Oil was trading at $20 per barrel in 1990's and now at $110 per barrel.
9. Experts claim only 2M-9M barrels are possible at this location at best.  That is only $400,000 to $1.8M for schools at .20 cents per barrel over the lifetime of the project.  Over a 20 year period that is nothing per year for the schools, maybe $20K to $40K per year. Can't even hire one person for that $.
10. Once E&B is entrenched in Hermosa Beach, say good-bye to local control. E&B will call the shots, influence local elections, etc. Hermosa Beach will be forced to jump when E&B says ‘jump’.
11. Oil seeping from the ocean naturally will undoubtedly be disturbed by the slant drill. Do you want more oil washing up on the beach similar to Santa Barbara and Huntington Beach? 
12. HB can pay off E&B Oil company and it will not bankrupt the city.
1. Sell the city storage property next to the fire station for $7.5M 
2. Get a $10M "Judgement Bond" from the State of California at 3% and service loan which will cost the city $300,000 per year. (not much in the grand scheme of things). 
13. Do you want to see a 75 foot drilling tower as you look out over the ocean. (See pic)
14. Drilling on this lot will destroy a perfectly fine $5M lot.  
15. Drilling is noisy and you want to smell fumes of oil downwind everyday? 
16. The oil tar sands used "if found" would be low grade oil and only used for ships and heavily machinery. It takes more energy to refine the crap than regular oil. 
17. Lethal gases and possible explosions?  
18. Additional ground settling and possible earthquakes. 
19. Not a green Hermosa sustainability initiative if that is what the city wants. 
20. Its low grade oil, used by crappy machinery and will have an unknown impact on the sea and surrounding environment. 

Please share this with you friends and neighbors who might be helpful spreading the world that the oil settlement should be a no vote. It may not be on the ballot for a long time but it is never too early to start campaigning against something this stupid. Please let me know if you have any thoughts or concerns. If you have any neighbors that should be on the list please copy them and lets start building the campaign now.

Stop Oil Drilling in Hermosa Q&A

Ask Questions Here

2001 Referendum Banning Oil & Gas Operations

2001 Hermosa Beach Referendum Banning Oil & Gas Operations

Proposition E (banning oil and gas) was approved with 56 percent of the vote: 2505 “yes” votes were received; 1940 “no” votes.