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Hermosa knows this drill

After more than 80 years, the wealthy South Bay beach town braces for the possible return of oil drilling.

July 22, 2013|Christine Mai-Duc

Mike Collins was raised in oil country but dreamed of living at the beach. As a young boy in Bakersfield, he accompanied his father to dusty fields dotted with derricks where he repaired the motors on oil rigs.

On his bedroom wall hung a poster of a house perched atop a cliff, overlooking the ocean waves. "Justification for higher education," his mother called it.

Now a psychologist, Collins bought his dream house four blocks from the seashore in tiny Hermosa Beach nearly five years ago. He surfs or paddleboards daily and often rides his bicycle to work.

Now, he's worried oil will follow him here.

"I know what oil smells like, I know what it looks like, what it sounds like," says Collins, whose house is 100 yards from the spot where an oil company wants to drill. "I don't want that in my backyard."

For The Record
Los Angeles Times Tuesday, July 23, 2013 Home Edition Main News Part A Page 4 News Desk 1 inches; 38 words Type of Material: Correction
Hermosa oil: An article in the July 22 Section A about a proposed oil drilling project in Hermosa Beach said the city reached a settlement agreement with Macpherson Oil in March. The settlement was announced in March 2012.

Like many in this wealthy South Bay beach town, Collins is bracing for the possibility that Hermosa Beach could be opened to oil drilling for the first time in more than 80 years. A citywide election to decide the matter, still almost a year away, is driving residents to opposite corners as they take stock of what kind of place they want their self-proclaimed "best little beach city" to be.

Hermosa Beach has faced this choice before; the oil question has been voted on four times in the town's 106-year history.

But with a multimillion-dollar legal settlement looming, the stakes in this debate are higher than ever, pitting residents who see a potential windfall for the city and its schools against those who fear long-term environmental and health consequences.

Black gold

In the waning days of the Los Angeles oil boom, prospectors struck black gold below Torrance and Long Beach, touching off a renewed oil fever in the South Bay.

Beachgoers sunned themselves in the shadow of drilling rigs, and nearby Signal Hill became known as "Porcupine Hill" for its spiny forest of derricks.

But Hermosa Beach remained a 1.5-square-mile oasis, thanks to a 1932 vote that banned new drilling within the city.

More than 50 years later, Santa Monica-based Macpherson Oil dangled the prospect of tens of millions of dollars in royalties, and voters in then-cash-strapped Hermosa voted to lift the ban.

But Macpherson never saw that oil.

Backlash from anti-oil activists changed voters' minds in 1995 and the city halted the project, deeming it unsafe.

In turn, the company sued the city for breach of contract, claiming as much as $750 million in damages. The legal case dragged on for 14 years, leaving city leaders fearing it might bankrupt the town.

"We were locked in the embrace of death with Macpherson," says Hermosa Beach Mayor Kit Bobko.

In March, one month before a jury trial was scheduled to begin, the city announced it had settled the suit. As part of the deal, E&B Natural Resources, a Bakersfield-based oil company, would buy Macpherson's stake in the deal for $30 million and limit the city's liability to $17.5 million. But there was one major caveat: E&B could again ask Hermosa voters to overturn the drilling ban. The election, which will be paid for by E&B, could happen as early as next spring.

Collins and his allies have formed a coalition called Stop Hermosa Beach Oil, many of them angry about revisiting an issue they thought had long been settled. The city, Collins says, would have had more success taking the case to trial.

Bobko, who helped broker the deal, rejects that idea, saying mock juries polled by city lawyers overwhelmingly came back against Hermosa. "People think it would have been a big oil company against this cute little town. That's not how it works."

Regardless, battle lines have been drawn.

Anti-oil activists have attended environmental law seminars, spoken out at City Council meetings and printed hats and banners with a plea to "Keep Hermosa Hermosa."

E&B, the oil company, has leased prime real estate on the city's main drag and hired locals to staff a sunny office complete with a "community room" for use by local groups.

Slant drilling

E&B wants to drill as many as 30 wells from a city maintenance site blocks from the beach using a technique called directional (or slant) drilling, which would allow it to dip into oil and gas deposits both inland and beneath the ocean. Experts say that is less risky than drilling through the sea floor from a platform in the water. Oil, gas and water would be separated on-site and sent through pipelines to refineries nearby.

The most significant safety distinction, the company says, is a state-of-the-art automated system that can quickly shut off wells in case of a blowout or spill. The company insists that it will not employ controversial "fracking" methods, and that a sleek facade and noise-containment walls will help it be a good neighbor.

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