TITLE
Recommendation to request City Auditor to conduct a comprehensive audit on fiscal liabilities and economic impacts to the City of Long Beach stemming from California’s transition away from crude oil and natural gas production to assist in the City’s transition planning efforts, and refer findings to the Climate, Environment, and Coastal Protection Committee for input and discussion.
DISCUSSION
Background
The Long Beach oil field has a long history dating back to 1921, when oil deposits were discovered in Signal Hill, followed by the discovery of the Wilmington Oil Field in 1932. The City of Long Beach was granted all property of the tidelands within its city limits by the State of California from 1911 through 1935. In 1939, the City created a petroleum division and drilled the first well under the tidelands, with the Long Beach Oil Development Company selected as the City's first oil contractor.
After a challenge to the City's rights to conduct oil operations, the California Supreme Court ruled that the conveyance of the tidelands by the State to the City included mineral interests. In 1951, Long Beach had over $100 million in unspent oil revenue, leading to the authorization to spend one-half of those funds for public improvements throughout the City.
In 1961, the City explored the area east of the Harbor District and confirmed that the oil field was contiguous to the eastern City limits. The Petroleum Properties Administration was created in 1962 to manage oil activities outside the Harbor district, and in 1965 a consortium of oil operators consisting of Texaco, Humble, Unocal, Mobile and Shell (THUMS) was selected as the City's oil operating contractor for the Long Beach Unit (LBU). Since 2014, California Resources Corporation (CRC) has been the field contractor for the operations of the LBU both offshore in the four oil islands and onshore within the Port of Long Beach boundaries.
To this day, millions of dollars of Tidelands revenues are us...
Click here for full text