Signal Hill Petroleum Asking to Extend Contract Another 20 Years

Signal Hill Petroleum (SHP), the operating company that runs the Signal Hill West and Signal Hill East sections of the Long Beach oil field, is asking for another 20-year contract. If approved by the City of Signal Hill, it would mean operating the current facilities and possibly expanding by up to 46 brand new wells.

This would come after a two-year contract with the city coming to an end; a 20-year agreement with SHP would be the longest permit for the company since its first agreement was made in 1998.

The new agreement with SHP would also include allowing the company to re-drill nine existing wells per year for the next 20 years, expand their natural gas processing facility, and to have the ability to do natural gas flaring, if needed.

A draft Environmental Impact Report (EIR) is expected to be ready for public review by mid-to-late May, according to the city. The public will have a month-long period to submit written comments. It will also be posted on the Current Projects page [https://cityofsignalhill.org/612/Current-Projects] on the city’s website for public review. Instructions will be presented on how to submit a public comment regarding the 20-year oil drilling permit extension on this Current Projects page after the draft EIR is posted in mid-to-late May.

Signal Hill’s Planning Commission and City Council public hearings will be scheduled following the public review that includes making any revisions to the draft.

State laws will need to be considered, such as SB 1137, regulating the impact of oil drilling and refining in “health protection zones,” where people are most at risk for possible adverse health effects from being in close proximity to these oil facilities. A 2018 report by the Los Angeles County Department of Public Health explored public health and safety risks connected to oil and gas facilities operating in the county. One health and safety concern was that “oil and gas wells use hazardous chemicals and emit toxic air emissions such as benzene, a known human carcinogen.”

These concerns tie into the City of Signal Hill working on a new Environmental Justice Element and updating its existing Environmental Resources Element; these will go into the city’s General Plan. A short survey [https://www.cityofsignalhill.org/CivicAlerts.aspx?AID=999] was posted on April 20 in English and Spanish, for the city to better understand how to improve community health and the environment. The city sees a strong connection in serving its community through reducing pollution, improving access to quality food and healthcare, increasing connectivity and mobility, and creating better opportunities for physical activity.

Taking on SB 1137

The California Independent Petroleum Association (CIPA), a trade group representing oil drillers in the state, has been able to put together enough signatures on petitions to introduce a 2024 state ballot initiative that would challenge SB 1137. Craig Barto, co-founder, President and Chief Executive Officer of SHP, represents the LA Division of CIPA. He’s also an executive committee member.

In September, Gov. Gavin Newsom signed SB 1137 into law. It prohibits 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 the drill sites in the SHP 20-year permit extension lie within that 3,200 feet of homes, schools, playgrounds, medical centers and other “sensitive receptors.” That was determined in the Signal Hill Petroleum Conditional Use Permit 97-03 Extension Initial Study, that looked at compliance with the California Environmental Quality Act (CEQA).

While the senate bill addresses these public health and safety issues related to oil drilling, SB 1137 isn’t currently in effect. Although it was signed into law in September 2022, the referendum created by CIPA prevents it from being enacted until the general public votes on it in November 2024.

CIPA has expressed concerns that SB 1137 was heavily amended days before the end of the legislative session last year; and that legislators had already rejected a similar bill earlier in the 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.

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.

The Intergovernmental Panel on Climate Change (IPCC), an intergovernmental body of the United Nations, recently released a synthesis report that expressed urgent concerns on cutting global greenhouse gas emissions by nearly half by 2030. Oil drilling, transporting it and using oil and natural gas, release greenhouse gases that cause climate change, according to the report.

How many more years of available oil?

So how much oil is there left to drill in Signal Hill and the surrounding area? It’s all part of the Wilmington Oil Field, which is 13 miles long and three miles wide, going from Wilmington to Seal Beach both offshore and a stretch of land along the shore. The City of Long Beach estimates that there are three billion barrels of oil that can still be recovered overall in the Wilmington Oil Field, and it’s divided vertically by faults creating separate producing entities referred to as the “fault block.”

Tidelands Oil Production Company is the field contractor for west Wilmington. California Resources Corporation (CRC) covers the eastern offshore portion. THUMS Long Beach, which originally came from a deal between Texaco, Humble, Union, Mobil and Shell, has the four man-made islands off the Long Beach shoreline. Long Beach is a royalty participant and a working-interest owner in its land-based oil drilling properties adjacent to Signal Hill, which is called the Long Beach Oil Field.

As previously mentioned, SHP operates the Signal Hill West and Signal Hill East sections of the Long Beach Oil Field. Breitburn Energy Co. operates seven wells in parts of Recreation Park in Long Beach. The City Wasem Community Lease is located near Marine Stadium and operates 16 active wells.

Today, Wilmington Oil Field production comes in at approximately 46,000 barrels per day from 1,550 active wells, according to the City of Long Beach. One published report from 2020 estimated that Long Beach Oil, including Signal Hill, pumps out about 8 million barrels of oil per year. SHP reports on its website that the company produces over one million barrels of crude oil per year in Signal Hill.

At 46,000 barrels per day, it would come out to about 16.79 million barrels of oil per year. Three billion barrels of oil would be tapped out in about 179 years – if it stays at its current production volume, and if tapping into all of it were to be economically viable. Certain levels of oil tend to stay implanted in the earth, and beneath the sea, because it gets too complex and costly to extract.

SHP and the other oil production companies in the Wilmington Oil Field region, would have well over 20 years to stay active.

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