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Land Is New Black Gold for Oil Firms

Business: As Southland fields grow less profitable, they are developed for homes, shopping centers.

June 02, 1997|ESTHER SCHRADER | TIMES STAFF WRITER

BREA, Calif. — The oil company man stands on a rise over this city named for its tar-rich soil, a far cry in his handsome suit from the oil-soaked adventurers who first pumped crude here more than a century ago.

Wielding a cell phone instead of a pickax, Dennis Chapman is a prospector of a different sort. His gaze is fixed beyond the massive pumps lumbering atop Brea's lakes of oil, on a cluster of men in hard hats working to mine his company's newest resource--real estate.

"These fields just aren't producing like they used to. Not here, not anywhere in Southern California," Chapman says of the tapestry of oil pipes and pumps woven across the hills before him, the frames of new houses rising in between. "The life of the fields is sort of reaching the end of the road."

As property manager of Unocal Land and Development Co., Chapman is at the forefront of a quiet transformation of oil lands that is changing the face of Brea and other cities where crude was once king.

With the surface of oil fields more valuable today than what's underneath, and drilling an increasingly uncomfortable fit with urban sprawl, oil giants are pulling out pumps and shutting down wells by the thousands across Los Angeles and Orange counties. As fast as they can get permits, they are building houses and shopping centers in their place.

In the past 10 years, fewer than 500 oil wells have been drilled in Los Angeles, Riverside, Orange and San Bernardino counties; more than 5,700 have been capped and abandoned over the same period. Last year, Chevron USA sold off the last of its more than 2,000 acres of oil fields in Southern California to developers. Shell, Unocal and other oil giants are on their way out.

"This is the final development of the Los Angeles Basin, and the final chapter in the story of oil in these parts," said historian Kevin Starr, librarian of the state of California. "This is basically the last land still to be developed, and from the perspective of that dreary march toward filling in the basin, its time has come."

Little Opposition

The oil companies' exit from these lands is bringing a slow close to the uneasy coexistence between petroleum and people that began with the first oil wells drilled in California.

It is altering the shapes and sizes of cities, as local governments annex land to cope with development ahead. It is straining municipal finances in cities that had relied on oil tax revenues--replacing those sure money generators with the unproven promise that more homes and shopping centers can bring new jobs and people to aging regions.

And the surge of building on former oil fields is filling in the last open space in many communities nearly without opposition, despite requiring million-dollar cleanups of oil-saturated land.

"I watched them build the golf course on this oil field. I watched them change the contours of the hill and put up houses on it," said William Ellis, 71, a former aerospace engineer who has lived in a house at the edge of a Fullerton oil field for 35 years. "You come to Southern California, and you get used to the idea that someone is always going to find another use for the same land."

The oil industry's turn as developers began in some parts of Southern California as long as 20 years ago, when petroleum prices first began to sink. By 1991, the tens of thousands of oil pumps that once lined the shores of Huntington Beach and Long Beach had dwindled to just above 300, and more than 800 acres of former oil company-owned land in those cities had sprouted thousands of tract homes.

Now, with the oil giants eager to pull out the last of their drilling operations, the building boom is accelerating: From La Mirada to Signal Hill, from Fullerton to Huntington Beach, wells are coming out and homes are going in.

In cities like Brea, Yorba Linda and La Habra, sitting on top of what were once some of California's richest oil reserves, the building has been particularly explosive. More than 3,000 acres of former oil fields have been approved for development in north Orange County in the past year alone.

More than 5,400 homes are planned on former oil fields in Huntington Beach. More than 10% of land in the former oil company city of Signal Hill is slated for houses and stores by the year 2000.

Although coastal development proposals have clashed with concerns over natural resources such as wetlands, inland building is proceeding with little opposition.

Pinehurst, a development of upscale homes along a Fullerton ridge still studded with oil wells, is a petroleum company's modern gusher. Recently sold by Unocal to a developer, the land features new homes winding around a golf course that is owned by the oil company.

"I'm surprised at how quiet the pumps are; they're just sort of a silent part of the landscape," said Jay Hutchison, 47, a businessman who was putting next to one. "It seems like these old oil fields make pretty good courses. That and old garbage dumps. It's sort of the California way."

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