Los Angeles Business Journal

Pumped-Up Radicalism

OP-ED: Activists invoke word ‘fracking’ to get Los Angeles City Council to ban oil industry in city limits. By Dave Quast Monday, March 24, 2014

The measure also includes a ban on injection wells for oil production. What most people don’t know, but a staff report would have revealed, is that 95 percent of the fluid that comes out of an oil well is brackish water that is comingled with the oil in the same geologic zone. The oil is skimmed from the water, and the water is treated and reinjected back into the formation.

Ban on jobs

A ban on injection wells, then, is a ban on oil production within the city limits and thus a ban on the thousands of well-paying jobs that the industry provides the city. Also, it’s a ban on the millions of dollars in taxes and fees that the industry generates for the city ($1.5 billion per year in Los Angeles County). 

As a kicker, banning local oil production doesn’t necessarily mean that the city’s residents will use less oil, it simply means more will have to be imported via tanker or rail car.

The timing of this vote is particularly ironic given that one of L.A.’s largest companies, Occidental Petroleum, announced that it is moving its corporate headquarters to Texas. A new company with a California focus is being established and company officials are deciding where to locate the new headquarters. Media reports indicate that Occidental’s move has alarmed some city officials, including Mayor Eric Garcetti, who has apparently made overtures to have the new company headquartered in Los Angeles to blunt the economic impact of the move. 

This creates an interesting quandary. How does the mayor tell a new company that we want you here when the City Council just blindly voted on a generic measure handed to them by activist groups that bans the activities of the new company?

Votes have consequences and so does the terminology used to form measures that are voted on. Catch-all proposals rarely work out well and the consequences of this vote are unusually damaging.  

Fortunately in the case of the city’s fracking ordinance, the city attorney has time to weigh the impact and the council has time to ask for extensive staff analysis before a final ordinance is written. The activists who screamed in support of this measure will likely insist that such diligence is unnecessary, but the city’s leaders would be wise to slow down and do some homework.

Dave Quast is California Director of Energy in Depth, an education and research project of the California Independent Petroleum Association.

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