The City Council has voted 3 to 2 to initiate oil and gas drilling at the city's maintenance yard on Valley Drive near 6th Street but rejected a proposal for a joint project with the Hermosa Beach School District.
After a driller is chosen, the city will receive a 7% platform fee for each well and an additional 11.66% royalty on all oil and natural gas recovered from city-owned land.
City Atty. James P. Lough estimated that the royalties will total less than $25,000 a year, based on royalties the city gets from a well already at the yard--the only well in the city.
The oil company that submits the winning bid also will be allowed to drill for more lucrative offshore oil once the city gets state approval for a project in the city's tidelands.