Warren Resources In the News

Imagine that a group of city politicians moved forward a plan that takes property that has been rightfully owned for generations and upon which people rely for their income; puts tens of billions of dollars of liability on city residents; and tries to shut down a business that followed the rules, adopted environmentally responsible practices, and provides a needed energy resource.

Awful, but not surprising, from a Los Angeles City Council embroiled in controversy and looking for any political lifeline.

The reality of this latest controversy initiated by the City Council’s actions will shut down all oil drilling in the city – much of which is consolidated in my company’s single, all-electric location with an impeccable environmental record – while disregarding the science of how to scale back these operations in a prudent and environmentally conscious way, instead opting for measures that will hurt the environment and increase community health risks.

Not only is it irresponsible governance, but with the shutdown ordinance, Los Angeles will seize generations-old mineral rights from property owners who rely on the steady and needed income every month. And as a result, the city puts itself, and its taxpaying residents, at significant risk of liability, with some estimates exceeding $100 billion.

City problems
In a city struggling with more than its share of significant problems – from rampant homelessness to increasing crime – Los Angeles has no shortage of huge, and expensive, issues to fix.

Adding $100 billion on the backs of city residents just to shut down a reasonable and environmentally responsible employer that has done everything to make its facilities a model for urban and oil gas operations is just political headline grabbing at its worst.

I understand that there is little sympathy for the oil energy industry. Let’s face it, we don’t sell ice cream. But what we do provide is far more affordable and cleaner than importing foreign-produced oil from Russia, South America or the Middle East. Those countries do not have California’s high standards, and there is a tremendous footprint left transporting those resources across the globe.

(W)ith the shutdown ordinance, Los Angeles will seize generations-old mineral rights from property owners who rely on the steady and needed income every month.

We also provide millions annually in tax revenue for city coffers, and we proudly support our community and strive to enhance our local community by providing 4 acres of land for parks and recreation – land that the community will most likely no longer be able to enjoy once the city shuts us down.

The city also has been outrageously irresponsible in its recommendations and assumptions to shutter our operations, which will result in a huge environmental impact. They have failed to truly analyze the health risks associated with the well abandonments that will follow the mandated shutdown. According to Yorke Engineering, respected local energy environmental impact experts, if the city proceeds with this hasty shutdown, chronic health risks to the local community will rise due to several factors, including the increase of heavy equipment needed to abandon these wells.

Surprisingly to some, emissions from current operations at our 9.22-acre site are on par with a 4,000-square-foot fast-food restaurant with a drive-thru window. In contrast, Yorke engineering cites chronic health risks for up to 10 years associated with the well abandonments that will inevitably follow the ban, significantly more harmful than current operations.

Flawed analysis
The city’s impact analysis is grossly flawed, using a power rating for abandonment equipment that is comparable to a riding lawn mower when standard equipment, including that used in our abandonment operations in the city, is 10 to 15 times more powerful.

When Council President Paul Krekorian has pointed to the ordinance as a move to relieve health concerns of area residents, he ignores the data on Warren’s operations and the impacts of well abandonments. He will answer to voters when the eventual well abandonments exacerbate the health impacts of local neighborhoods.

Our company will not just let the council use us political penicillin to cure the other controversies that ail them.

Instead, we are aggressively pursuing legal remedies, and believe we will succeed in our efforts to stop the city from shutting down our operations, seizing the land our royalty owners rely on for income, placing billions of liabilities on Los Angeles residents, and enacting procedures that will cause unnecessary harm to human health and the environment.

James A. Watt is president, chief executive and chairman of Warren Resources, which is headquartered in Long Beach but has its operations in Wilmington. It is the largest oil producer in the city of Los Angeles.