California Oil Town Chose a Firm with Oil Industry Ties to Review Impacts of an Unprecedented 20-Year Drilling Permit Extension

Signal Hill Petroleum spent millions to overturn California’s landmark law protecting neighborhoods from oil drilling. Now it wants to drill dozens of new wells in a city established a century ago to avoid taxes on oil development.

Share this article

An oil pumpjack sits near homes in Signal Hill, Calif. Credit: Mario Tama/Getty Images
An oil pumpjack sits near homes in Signal Hill, Calif. Credit: Mario Tama/Getty Images

Share this article

On Tuesday, residents of a small Los Angeles County town came out in force to urge their city council to reject a California oil and gas company’s proposal to extend its neighborhood drilling operation permit for 20 years.

Community organizers, scientists, engineers, doctors, educators, homeowners and people whose families have lived for generations in Signal Hill spoke of babies born with asthma, neighbors with cancer and an “antidemocratic, disgusting and downright dangerous” plan to expand oil drilling on the heels of the hottest year on record.

“The International Panel on Climate Change has stated that we must urgently ramp down fossil fuel production in order to avoid the most extreme effects of climate change,” said Catherine Ronan of the Sierra Club’s Los Angeles chapter. “A proposed 20-year permit extension does the opposite,” a move she called unacceptable.

We’re hiring!

Please take a look at the new openings in our newsroom.

See jobs

Signal Hill, long known as an oil town, straddles the Long Beach Oil Field at Los Angeles County’s southern tip. It was founded in 1924 to avoid zoning restrictions and a per-barrel tax passed by the surrounding city of Long Beach, three years after Shell Oil drilled a gusher on what was then a remote hilltop south of Los Angeles. 

California aims to reach carbon neutrality by 2045 and ban the sale of gas-powered vehicles by 2035. But a city built on oil is deciding whether to give the company that some say runs the town license to extend operations of its existing sites and drill dozens of new wells over the next two decades. And it’s relying on a firm with ties to the oil industry to evaluate the project’s environmental impacts.

The city did not find any impacts from extending and intensifying drilling operations over 20 years that would be significant and unavoidable, said Megan Schwartz of Catalyst Environmental Solutions, which city managers hired to perform a draft environmental impact report, at the Tuesday meeting. 

The city decided to review the potential environmental and health consequences of zoning 46 new Signal Hill Petroleum wells, Schwartz said, even though if California voters decide to uphold Senate Bill 1137 in the November election, it would affect all of the wells. Signed by Gov. Gavin Newsom in 2022, S.B. 1137 prohibits drilling new wells and tightens restrictions on existing wells within 3,200 feet of places where people live, work and play.

Signal Hill Petroleum, which promotes itself as specializing in developing crude oil and natural gas in urban areas, owns more than 480 wells, including nearly 250 that sit idle yet still release toxic fumes, a recent report by the nonprofit FracTracker found. All of its wells sit within the 3,200-foot setback, some just 20 feet from homes.

State records show that the company produces about a million barrels of oil a year. It began acquiring Signal Hill drill sites in 1984 from larger operators like Shell and Texaco. By 1998, the company had acquired all seven of the city’s drill sites, and the city council consolidated each site’s “conditional use permit,” which allows activities normally prohibited by zoning codes, into a single permit.

Since 1998, the Signal Hill City Council has extended that permit 10 times, for periods ranging from six months to 10 years. The 20-year extension would be the longest granted to Signal Hill Petroleum, which has a history of fighting restrictions on neighborhood drilling.

Signal Hill Petroleum spent $3.2 million as a top spender in a campaign led by the California Independent Petroleum Association, or CIPA, to overturn S.B. 1137. The law was designed to protect communities from the toxic gases emitted by drilling operations. But canvassers lied to voters to gather enough signatures to qualify for the November ballot, telling them the referendum would lower gas prices and protect residents from oil drilling, rather than reverse those protections. 

In 2017, Catalyst Environmental Solutions analyzed the impact of buffer zone requirements on Los Angeles County oil and gas production for CIPA, as local officials considered setback policies. Catalyst concluded that the 2,500-foot buffer zone suggested by regional activists would result in the shutdown of three-quarters of production wells in the county.

Signal Hill city managers relied on a consulting firm with close ties to the oil industry to evaluate the risks of approving a 20-year permit to extend oil development and drill dozens of new wells. The firm, Catalyst Environmental Consulting, advises the California Independent Petroleum Association, which led a campaign to overturn a landmark law to protect communities from neighborhood drilling.
Signal Hill city managers relied on a consulting firm with close ties to the oil industry to evaluate the risks of approving a 20-year permit to extend oil development and drill dozens of new wells. The firm, Catalyst Environmental Consulting, advises the California Independent Petroleum Association, which led a campaign to overturn a landmark law to protect communities from neighborhood drilling.

“Catalyst appreciates the opportunity to assist Californians for Energy Independence and CIPA with this analysis,” Schwartz told the oil lobbying groups. CIPA lists Schwartz as part of its consultant team in a recent annual report. Californians for Energy Independence, which describes itself as a coalition that supports state and local policies that allow for continued domestic energy production, is run by the heads of CIPA and the Western States Petroleum Association.

Neither Schwartz, Catalyst’s director of environmental regulatory compliance and permitting, nor Colleen Doan, Signal Hill’s Community Development director, mentioned Catalyst Environmental Solutions’ work for CIPA at the meeting.

Schwartz did not respond to requests for comment. Doan would not speak to Inside Climate News and none of the Signal Hill city managers responded to questions about whether a consulting firm with a history of working for the oil and gas industry could provide a credible, unbiased analysis of the risks of neighborhood oil drilling. Signal Hill Petroleum did not respond to requests to comment on residents’ unanimous opposition to their 20-year extension plan.

No Safe Levels of Toxic Emissions

Catalyst’s environmental impact report found that Signal Hill Petroleum’s 20-year extraction extension would pose “less than significant” risks to nearby residents, or risks that would be “less than significant with mitigation.”

History shows, however, that living near active oil and gas operations poses deadly risks.

After a Signal Hill family complained about smelling oil and gas for months, a natural gas explosion blew out the windows and doors of their two-story home “like a bomb,” the owner told the Long Beach Post. Their house sits across the street from active wells.

A pumpjack operates feet away from houses in Signal Hill. Credit: Andrea Vega
A pumpjack operates feet away from houses in Signal Hill. Credit: Andrea Vega

Catalyst’s report also claimed that emissions from existing operations fall below the South Coast Air Quality Management District’s safety thresholds. As a result, continuing operations are expected to be below air district standards, the report asserted. 

Yet Signal Hill Petroleum violated air district laws more than a dozen times between 2019 and 2022. Violations included failure to maintain equipment in good operating condition and leaks of methane and related toxic gases exceeding 50,000 ppm. In August 2022—a month before Newsom signed S.B. 1137 into law—a leaky Signal Hill oil storage tank released massive plumes of noxious gases in violation of air safety standards. 

And a growing body of evidence belies the report’s claims of less than significant risks to community members.

Six recent epidemiologic studies in California demonstrate adverse impacts to air, water, soil and climate, and to the health of workers and nearby communities as a result of oil and gas extraction, said Elizabeth Kamai, an environmental epidemiologist and research scientist at the University of Southern California’s Keck School of Medicine, at the meeting.

”Research among residents near active oil-producing sites in L.A. has found that residents living near these active drill sites report significantly higher prevalence of wheezing, eye and nose irritation, dizziness and odors,” Kamai said. “Impacts to lung function among people living near oil wells is similar to that of living with a smoker.”

Last year, researchers from North Carolina to California reported in the journal Environmental Research: Health that air pollution from U.S. oil and gas operations aggravated asthma in 410,000 cases, caused 2,200 new cases of childhood asthma and resulted in 7,500 deaths, costing $77 billion in health impacts.

The environmental impact assessment relies on a lot of modeling for its risk assessment, Jill Johnston, who works with Kamai as director of USC’s Environmental Justice Research Lab at the Keck School of Medicine, told Inside Climate News. “But if you look at health studies in L.A., and others across the country, we see consistent evidence that living near drilling is harmful to human health. There’s really a preponderance of evidence that demonstrates this around adverse impacts with birth outcomes, particularly preterm birth, as well as respiratory outcomes.”

Women who live near drilling operations are more likely to have babies with heart defects and lifelong health problems stemming from being born prematurely or underweight. And the closer people live to wells, and the greater the density of wells, the more likely they are to experience a wide array of chronic or serious health problems, including cardiovascular and respiratory diseases and cancer

Thousands of wells operate across the urban regions of Los Angeles County, where residents also contend with toxic emissions from notoriously heavy freeway and port traffic. 

Hundreds of oil and gas wells operate next to homes, playgrounds, tennis courts and other places people live, work and play in Signal Hill. Credit: Andrea Vega
Hundreds of oil and gas wells operate next to homes, playgrounds, tennis courts and other places people live, work and play in Signal Hill. Credit: Andrea Vega

When a South L.A. oil producer suspended operations after hundreds of residents complained of illnesses and odors and federal officials who visited the site got sick, Johnston and her team took advantage of the rare opportunity to measure changes in air quality. “We were able to leverage fenceline monitoring data to understand how air quality in the neighborhood changed when the site went from producing oil to going idle,” she said.

Johnston documented significant decreases in toxic volatile organic compounds like benzene, ethylbenzene and toluene, as well as significant changes in methane, which aside from being a potent greenhouse gas, acts as a sign of oil production but not traffic. 

Methane and several toxic air contaminants decreased by about 23 percent after the company ceased operations, Johnston and her colleagues reported in the peer-reviewed journal Environmental Science: Processes & Impacts. 

David Hakke, a physician and Sierra Club activist, asked city officials at the meeting why the environmental impact review didn’t include volatile organic compounds emitted from oil and gas operations, including known carcinogens like benzene, toluene and xylene. “They are added to the liquids that are pumped into these wells, and they allow the oil to be released from the rock,” Hakke said. “And there’s no safe level of any of these chemicals.”

Embracing the Future 

Several nonprofits, including the Sierra Club and Food and Water Watch, collaborate with a group of Los Angeles residents and organizers called Climate Brunch. Over the past several months they went door to door telling residents about Signal Hill Petroleum’s extended permit plan. 

“Until recently, not a single one knew about it,” Sierra Club organizer Nicole Levin told city managers. “But I can tell you that most of them, all of them, are adamantly opposed.”

She held up a document, which she said included 578 comments from residents who opposed the plan. “I would love to know what methods the city has taken to inform the public of this project,” Levin said. “I also want to know if there’s been any investigation into Signal Hill Petroleum activities around S.B. 1137 and the referendum.”

Small producers like Signal Hill Petroleum and their trade groups ultimately spent more than $37 million to put the S.B. 1137 referendum on the November ballot. They considered it a good investment because even if voters reject the referendum in the general election, simply qualifying for the ballot won neighborhood oil drillers nearly two years to continue or expand their drilling operations within health safety zones.

This story is funded by readers like you.

Our nonprofit newsroom provides award-winning climate coverage free of charge and advertising. We rely on donations from readers like you to keep going. Please donate now to support our work.

Donate Now

The 20-year extension is a “big divergence” from Signal Hill Petroleum’s previous permit extensions, which were mostly two and a half years or less, Andrea Vega, an organizer with the nonprofit Food and Water Watch, told Inside Climate News. As she went door to door telling people about the unprecedented drilling extension, she said she was “horrified and saddened” to hear residents share stories about themselves and their neighbors developing cancer and respiratory illnesses, likely caused by living with oil drilling in their backyard.

California has been making many advances towards clean, renewable energy over the past few years, Vega said. “This notion that the fossil fuel industry has been pushing for so long, that we need to be completely dependent on them, is absolutely ridiculous.”

She wants to see a new environmental report that prioritizes the health and safety of the community over the profits of oil companies. Continuing to drill is simply incompatible with the health of communities and the climate, Vega said. “I would really like to see Signal Hill City Council embrace clean energy solutions, and really put the city on the best path forward.”

Share this article