Posted on 03/13/2019

LOS ANGELES — Mayor Eric Garcetti and Councilmember Gil Cedillo today took an important step toward ending L.A.’s reliance on fossil fuels, announcing the termination of an oil and gas lease agreement at the St. James Controlled Drill Site in the University Park neighborhood — permanently closing a portion of the drill site.  

The St. James Exploratory Oil and Gas Lease, operated by AllenCo, was approved by City officials in 1963, allowing the company to access oil under City-owned land. After federal, state, and local agencies found that the company had violated numerous environmental orders, AllenCo voluntarily ceased oil production at the site in 2013. According to the terms of the lease, any lapse in production allows the City to revoke the company’s operating authority under City property.

“Our climate crisis demands a swift end to dependence on fossil fuels, and we’ll seize every opportunity to plug up a well,” said Mayor Garcetti. “By shutting down these wells for good we are putting communities first, helping keep the air clean for our families, and moving us closer to a clean energy future that doesn’t depend on dirty oil.”

"The health, safety, and welfare of residents are my paramount concern," said Councilmember Gil Cedillo. "I share the community's desire to ensure that this oil site does not re-open and resume operations. We reaffirm our commitment to our residents by severing the company's contract and not renewing the expired leases with the City. He added, “We thank the Mayor for his clean energy vision that reduces our reliance on fossil fuels.”

During past operations, AllenCo Energy was found to have violated several environmental, health, and safety laws — including the Federal Clean Air and Clean Water Acts. The Environmental Protection Agency determined that AllenCo had failed to maintain a safe facility by failing to take necessary steps to prevent accidental releases of extremely hazardous substances.

In 2016, the City Attorney found AllenCo in violation of the California Health and Safety Code, Water Code, and Public Resources Code.

The City’s Petroleum Administrator, Uduak-Joe Ntuk, issued a letter today notifying AllenCo Energy of the expiration of the lease agreement due to a lack of production at the facility, ending the company’s right to operate wells that run beneath City-owned property from the site.

“It’s my job to determine compliance with all provisions of the City’s petroleum leases,” said Ntuk. “This letter serves as a notice that AllenCo’s rights to operate wells from the St. James Controlled Drill Site that run beneath City-owned property are terminated.”

Twenty-one idle wells will still remain on the St. James site. The City will continue working with the landowner to identify alternative uses for the property that are more compatible with the needs and values of Angelenos.