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Company challenges LA oil drilling phase out, ban on new wells
Environment Jan 10, 2023
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An oil and natural gas exploration and production company took legal action Tuesday against the Los Angeles City Council’s unanimous vote in December to phase out and ban oil drilling in the city, saying the measure violates their due process rights and ignores the clean energy aspects of its operations.
Warren Resources Inc.’s Los Angeles Superior Court petition alleges that the ordinance violates the California Environmental Quality Act, the city’s General Plan and the state and federal constitutions in that it amounts to a taking of property without just compensation and infringes on the firm’s due process rights.
The company wants a judge to issue a preliminary and permanent injunction against enforcement of the ordinance and to order compensation to Warren for the alleged temporary and permanent taking of its property. A spokesman for the City Attorney’s Office said Tuesday that his office has no comment on the petition.
The council voted 12-0 on Dec. 2 to pass the ordinance, which amends the municipal code to make existing extraction activities a nonconforming use in all zones.
The Los Angeles County Board of Supervisors approved a similar ordinance in October. The City Council in January 2022 unanimously approved a series of recommendations aimed at banning new oil and gas wells.
The city ordinance phases out all such oil and gas extraction activities via a ban on new oil and gas extraction and ceasing existing operations within 20 years. Operators would not be able to expand their existing sites or extend the life of a well during the 20-year phase-out period.
But according to the petition, the city’s actions were “unlawful, arbitrary, capricious, unreasonable and lacking in evidentiary support and, in fact, were contradicted by the evidence.”
The City Attorney’s Office advised city officials in a public meeting prior to the publishing of the ordinance that the city should obtain an expert amortization study before adopting an ordinance that will impact operators’ rights, but the city instead “brazenly chose to ignore the legal advice of its own lawyers,” according to the petition.
The ordinance will “undoubtedly force Warren and other operators to shutter their doors,” according to the petition, which further states that the company’s sole operations are within the Los Angeles basin and its only business is oil and gas extraction.
“Not only does this effect a taking for which no just compensation has been paid, but a shutdown of the industry will eliminate good-paying jobs, leaving many jobless with no plausible equivalent replacement,” the petition states. “The shutdown of Warren’s operations will also result in lost income to its royalty owners, many of whom rely on that income to survive.”
In its alleged rush to make headlines, the city “never bothered to consider the actual environmental footprint of Warren’s operations,” which are 100% electric, and emissions from its nearly 10-acre facility are the equivalent of a fast-food restaurant with a drive-through, according to the petition.
Warren has invested more than $400 million in drilling and facilities construction at its operation site, produces about 1,800 barrels of oil daily and currently operates about 165 active wells and 79 idle wells for a total of 244 of the approximately 640 current wells in the city, the petition states.
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