Signal Hill Petroleum’s Move Toward Oil Well Expansion: What’s Next?

A critical decision hovers over the City of Signal Hill: allowing for major expansion of active oil wells within its boundaries – or not allowing it.

If approved by Signal Hill’s city council, it would mean Signal Hill Petroleum would continue operating its current facilities and possibly expand it by up to 46 brand new wells over the next 20 years. It would be the longest contract ever granted by the city beyond the usual shorter-term agreements for oil wells.

A public hearing will be held at Signal Hill’s city council meeting on June 4. It will be part of a public review period that started this month and will go through June 24.

On May 10, the city made available a draft version of the Environmental Impact Report (EIR) prepared by Catalyst Environmental Solutions. The EIR is governed by the California Environmental Quality Act (CEQA), with the City of Signal Hill serving as the lead agency for the study. Those interested in reviewing the EIR can find it at this website: https://cityofsignalhill.org/612/Current-Projects

It could take up to October or later before the city council takes a final vote on the new permit. The city is waiting for a final EIR to come out, which will go to the Signal Hill Planning Commission for review and approval; and then on to the City Council for a vote.

Signal Hill Petroleum (SHP) conducted facility site tours on May 14 and 16 to provide additional information and to answer questions. It was part of the 45-day public comment period. Public comments were also given to the company and the city last year after the request for the permit was first introduced in January 2023.

Since 1998, the City of Signal Hill has granted 10 CUPs, which allowed SHP to drill out one million barrels of oil per year. At its current rate of drilling, it’s expected that it could go on for about another 50 years.

What SB 1137 Spells Out

The city council vote on potential allowance of a 20-year Conditional Use Permit (CUP 97-03) is happening within the context of California voters deciding in November whether it can happen or not in Signal Hill and across the state. The California Oil and Gas Well Regulations Referendum, which would stop Senate Bill 1137 from being enforced, is on the November 5 ballot.

SB 1137, adopted by the state in 2022, would prohibit the issuance of well permits and the construction and operation of new production facilities within a health protection zone of 3,200 feet from a “sensitive receptor.” Sensitive receptors would include a residence, school, childcare facility, playground, hospital, or nursing home, according to a state senate summary. It also requires establishing strict engineering controls related to these health-protection zones. All seven of Signal Hill’s drill sites are within that 3,200-foot range.

Getting enough signatures to put the California Oil and Gas Well Regulations Referendum on November’s ballot put SB 1137 on hold. The California Independent Petroleum Association, or CIPA, a trade group representing oil drillers in the state, brought that referendum to the state ballot; and member company SHP has been part of it.

CIPA has expressed concerns that SB 1137 was heavily amended days before the end of the legislative session in 2022; and that legislators had already rejected a similar bill earlier in that session. The state already has oil well setbacks rules, and more than 20 local, county, state and federal agencies oversee oil production in the state. California already has the world’s strongest environmental, health and labor laws, and may have to increase its reliance on imported oil, the association said. CIPA emphasizes the importance of relying on domestic oil for bringing jobs and efficiency to the state and national economy.

Concern Over Health Issues

Four nonprofit organizations – Sierra Club, Climate Brunch, Food and Water Action, and Center for Biological Diversity – canvassed Signal Hill neighborhoods in late March and April. Their goal was to block expansion of the oil drills and to get public feedback on the city’s decision.

“We’ve gone out three times now, and almost everyone we’ve talked to had no idea it was happening, and many exhibit health symptoms associated with living close to oil wells,” said Madison Hobbs, founder of Climate Brunch.

Most of them had not made a connection between the oil drilling and increases in respiratory problems like asthma for themselves and their families, Hobbs said. For some, the smell from the oil drilling is so bad that they’ve considered leaving the area, she said.

The city’s strong connection to SHP is making it difficult for the city council to clearly discern what’s at stake in this decision, Hobbs said. The company’s $100,000 check to the city for sponsoring its Centennial celebration event in April shows how strong that connection can be, she said.

During the facility site tours this month, SHP prided itself on bringing high standards of clean operations to its oil wells. However, that perspective is missing out on the real environmental and human health issues from oil production and consumption, Hobbs said.

It’s looking like Signal Hill’s City Council is likely going to approve the 20-year CUP, Hobbs said.

She’s not getting responses back from her emails on this subject. Hobbs is working with others to request that city council members meet face-to-face with them ahead of the city council vote to discuss these issues.

The Sierra Club has started a petition to tell the Signal Hill City Council to not approve SHP’s permit. As of May 23, 529 people had signed it. The environmental group is pushing to stop oil production in other parts of the state including pressuring Culver City to close down its oil and gas wells. The Sierra Club is also asking Long Beach to do the same, Hobbs said.

Digging into the EIR

SHP proposes to drill a maximum of 46 new wells within the seven drill sites over the 20-year period, at a maximum rate of five wells per year. The company also proposes to upgrade the natural gas processing facility at Drill Site #2 to facilitate sale of excess natural gas to Southern California Gas Company and promote efficiency and redundancy in operations, according to the EIR draft.

CEQA guidelines describe the EIR as a public information document that assesses the potential environmental impacts of a proposed project. It also identifies mitigation measures and alternatives to the project that could reduce or avoid adverse environmental impacts, according to the EIR draft. Alternatives being considered are allowing for a two-year permit, a 10 year-permit, or a ‘No Project Alternative.’

The No Project Alternative would not approve the 20-year extension of the CUP for the continued operation of the seven drill sites currently operated by SHP and would revoke SHP’s CUP. If the city revoked the CUP, existing operations at the seven drill sites could continue but SHP would no longer be able to drill any new wells, according to the draft EIR.

The negative impact of air pollution on health issues — including severe respiratory conditions — has been part of state policies in recent years focusing on the impact it can have on disadvantaged communities who tend to be heavily exposed to this level of air pollution coming from commercial trucks and passenger vehicles.

Oil drilling and production, natural gas extraction and storage, transporting oil and gas, and consumption of oil and gas, release greenhouse gases that cause climate change, according to reports. The burning of fossil fuels like oil and gas for energy is the largest source of global greenhouse gas emissions, according to the U.S. Environmental Protection Agency.

Jon LeSage is a resident of Long Beach and a veteran business media reporter and editor. You can reach him at jtlesage1@yahoo.com.