No to Oil Plan Spells Dawn of a New Day in Torrance

The Torrance City Council’s unanimous decision last week to reject an ambitious plan to drill for oil in a largely residential neighborhood may mark the end of an era in the South Bay’s largest city.

The last vestiges of the old smokestack industries and oil operations that have dominated the city’s life are disappearing, squeezed out by soaring residential property values, high-tech industries, headquarters for Japanese manufacturers and massive shopping malls.

Two powerful symbols of the new Torrance--a neighborhood group and Los Angeles County’s biggest shopping mall--defeated a plan by Kelt Energy Inc. to tap 27 million barrels of oil underneath 560 acres of southeast Torrance.

Kelt Energy, a small oil company based in Delaware with its parent company in the United Kingdom, already operates an oil drilling project beneath the Del Amo mall.

Modern Times

“The community has changed,� Councilman Bill Applegate told a standing-room-only crowd in the modern, wood-paneled council chamber: “What we might have done 30 years ago or 20 years ago is different than what we should do today. The reintroduction of over 100 wells for whatever their purpose in the middle of a city that has grown from infancy to . . . ripe middle age . . . is out of place.�

Applegate and most of his council colleagues, addressing more than 260 people Tuesday night, said the Kelt plan is inconsistent with the new Torrance.

Mayor Katy Geissert called the plan out of step with the community and pointedly criticized Kelt for violating one of the most important ground rules of Torrance politics: Always consult the neighborhood. “I find that very much lacking,� she said.

Applegate said that in the old days, Torrance sought heavy industry but that the city has “grown up in a lot of ways.�

“We were originally designed as a manufacturing town. And over the recent years, the city’s manufacturing base has changed drastically,� he said.

Torrance may still have been “a farming community, a bean-field community and an oil community� at the end of World War II, he said, “but that isn’t what it looks like today.�

Applegate, whose real estate business has grown with the city, said light manufacturing, high-tech businesses and service industries have replaced the farms and oils wells, the heavy manufacturers and steel mills.

After a 3-hour public hearing, Applegate moved to reject Kelt’s drilling project. “That’s not the way we are headed,� he said. “That’s not the type of thing we would want to have happen again. Do we want to reintroduce new additional oil operations in our city?�

The council’s answer by a 6-0 vote was a resounding no.

Throughout the public hearing, deep divisions were evident between those worried about the quality of life in a rapidly growing city and those to whom Kelt would have paid royalties.

Sue Herbers, president of the Southeast Torrance Homeowners Assn., complained that Kelt campaigned in recent weeks to organize holders of mineral rights but waited until the eleventh hour before addressing other residents’ concerns about noise, fumes, gas leaks and potential danger to houses, including ones built over abandoned wells.

“We have no feeling of credibility or trust in this company,� Herbers told the council. “Kelt has not made a good-faith effort. We know we live with oil. We know its pluses and minuses. We ask you to deny the project as proposed.�

Applegate noted that a familiar argument was reversed in the Kelt case. “It has often been said the wells came before the homes. . . . This is a different case. This is a case where if this new project is allowed, the homes were here before the project.�

Herbers agreed that the case against Kelt was bolstered by the last-minute intervention of an attorney for the Del Amo mall, who raised questions about the risk of the Southeast Torrance drilling project.

The sprawling shopping center, one of the largest in the world, generated $403.2 million in taxable retail sales in 1987, more than any other mall in Los Angeles County, according to State Board of Equalization figures.

The mall generated more than $4 million in sales-tax revenue for the city last year, so when the shopping center’s attorney, Milan D. Smith Jr., warned of the dangers of the Kelt project, council members listened.

Smith cast doubt on Kelt’s financial guarantees and insurance coverage. He warned about potential problems from fumes, gas lines, pollutants and toxic wastes, suggesting that the project was inappropriate in a heavily populated, primarily residential area.

City Atty. Stanley E. Remelmeyer said that if problems develop, homeowners should “sue the oil company, don’t sue the city.�

But Smith left lingering concerns about the ability to collect damages from a distant foreign company with only limited assets in the United States.

The largest shareholder at Kelt, which trades on the London Stock Exchange, is a Frenchman, Hubert Perrodo.

Although Smith took aim at Kelt’s proposed southeast Torrance project, his real target is Kelt’s drilling project under the Del Amo mall. Smith has said that when the Del Amo project comes before the council for review early next year, he will ask for massive insurance and liability guarantees.

Geissert said the process that Kelt uses in Torrance involves injecting water deep into oil-bearing sands that have already been tapped by conventional wells. The “water-flood process� is generally an acceptable way to recover oil, but not in a residential neighborhood, she said.

Kelt wanted to drill 108 slant wells from a rolling 2.2-acre site near Sepulveda Boulevard and Border Avenue, but council members were reluctant to commit to that land use for that site for the 30 years of the project.

Geissert noted that the Del Amo project now operated by Kelt from a site diagonally across Torrance Boulevard from City Hall is in a commercial area 625 feet from the nearest home.

The southeast Torrance drill site, on the other hand, is 50 feet from the nearest residence, she said.

“I find the drill site too small for what is being proposed,� Geissert said. “I find it too close to a residential area. I find it an inappropriate use.�

And Geissert, who has long been active in community organizations, objected to the way Kelt tried to rally support “based upon pure financial gain for the people who own the mineral rights rather than good planning.�

She said Kelt wound up pitting “one neighbor against another.�

Geissert and her colleagues acknowledge that neighborhood groups throughout the city are key to winning municipal elections. The groups influence many voters in a city where turnout is low: only 15% for the council election in March.

Many of the council members started their political careers as civic activists.

Councilwoman Dee Hardison--a former president of the Southeast Torrance Homeowners group who abstained from voting on the Kelt project because she owns property in the neighborhood, said the council’s decision does not rule out an oil-recovery project in the future.

But, she said, the concerns of neighbors must be addressed. “The message is loud and clear. You’ve got to go out to the community that you’re going to affect.�

When Kelt’s attorney, Peter Lacombe, tried to withdraw the project from consideration moments before the council voted, many in the audience shouted, “No!�

When the unanimous verdict was in, Lacombe, a well-known Torrance attorney who has represented numerous oil projects in the city, conceded defeat and blamed the loss on “a lack of communication� and an inability to “turn around and correct� Kelt’s image.