P and L politics
Proponents of Hermosa Beach Measure O, E & B Natural Resources, had an advertisement in Easy Reader saying their oil drilling project at 6th and Valley will net Hermosa Beach $500 million in royalty payments. E & B is certainly aware that at current oil prices, their claim of $500 million in city income goes to zero, just like that. They fail to tell residents that this oil drilling plan could be a huge bust from both a financial and environmental standpoint. What also should concern voters is the corporate make up of E & B Natural Resources. E & B manages LLC’s for investors who want to shield their liability through the use of U.S. Bankruptcy Court & Limited Liability Company law protections. Why has the city council not asked E & B for tax returns, balance sheets, and profit and loss statements to better understand E & B’s ability to perform and insure under this application? If Chevron was doing the drilling at least we’d know the net value of the driller through public market reports. Only a fool does not get financials on their partner in a project with such big risks. Dishonest ads, no financials on the driller, No on Measure O on March 3.
Michael Keegan
Former Mayor and Councilmember
Hermosa Beach
An OK for Measure O
Thankfully, the Hermosa Beach City Council voted to include E&B Natural Resources’ proposal to give $35 million to $40 million dollars to our Hermosa Beach Education Foundation. Thanks go to the many who spoke, emailed, and made calls to support our plea. We acted because School bond Measure Q failed. While the election is over, the crisis remains. No student of ours should be trying to learn in makeshift classrooms set up in awkward locations like the school auditorium. Is there any doubt we would ridicule other communities who treated their children this way?
We understand why our school leaders were reluctant to accept E & B funds. They knew they would face vitriolic scorn from opponents of lifting the oil recovery ban. These opponents fear that supporting our schools will make lifting the ban more palatable to voters. They may be right. But we should all be grateful that the city council correctly determined that the voters deserve to have the benefits on the ballot, along with the impacts so that voters can make an informed choice.
George Barks
Former mayor, City of Hermosa Beach
Redondo Beach
Sinking wells
Martha Logan predicts that E & B’s proposed oil project will generate millions of dollars for both the City of Hermosa Beach and the Hermosa Beach School District (ER Letters December 18, 2014). The reality is that E & B’s project will provide very little if any money for the city or the schools. E & B’s own financial projections state, “In sum, when calculating the royalties that the City and the School District may receive, we assume that the recovered oil will sell for an average price of $105/barrel.” As of December 18, the price of crude oil had fallen to under $56 per barrel, and it’s widely predicted to fall below $50, perhaps as low as $40 by late February 2015. The decline is even more significant than it appears at first blush as E & B’s costs must come out of money it makes from the sale of the oil. At current prices, E & B undoubtedly would lose money on every barrel it produces. Without profits, E&B would have no money for the city or the school district.
R. Douglas Collins
Hermosa Beach
Green gold
I wanted to thank Gary Brown for his response to my letter (ER Letters, November 11). I appreciated the kind words about being a pioneer. Hermosa is full of pioneers and innovators. That is one of the things we love about Hermosa and why being one of the first cities to harvest as much energy as we use is a viable idea here.
It was great that Brown understood the Brendle Group report and the tremendous opportunity that the $36M/year annuity would provide for our city. That, combined with the health and tourism benefits, could help unite a community divided over the oil project.
As Brown mentions, we could just drill for oil. But it is unlikely anyone would see any money anytime soon. Win or lose, that project will most likely be in litigation for the next 20 years.
In contrast, the Carbon Neutral initiative could actually help to create a more efficient government, a more robust economy, less taxes, and better health. And how else are we going to pay for the lawyers?
The oil is not going anywhere soon. But Carbon Neutral initiative opportunity will expire if we do not all work together to understand it and take advantage of it. You can read more about it at GreenIdeaHouse.com.
Robert Fortunato
Hermosa Beach
Double victory
In the latest attempt to suppress the legitimate arguments against oil drilling in Hermosa Beach, a citizen supporter of oil represented by oil company lawyers, sued the City of Hermosa Beach, claiming that ballot arguments opposing Measure O were false and misleading.
On Friday, December 19, a Los Angeles Superior Court judge firmly rejected the oil supporter’s claim, finding instead that the oil opponents’ arguments were legitimate and with merit. Indeed, the Court went beyond finding opposition arguments not misleading. It found that each and every argument the oil company attempted to censor was supported by facts. The Court went on to express concern about the Plaintiff’s frivolous attempt to use the courts to suppress factual and legitimate opposing views, and cited case law that states: “The right to seek deletion of false and misleading ballot arguments should not be used as a weapon against differing opinions.”
This was not only a win for the right of Hermosa Beach voters to have the facts included in the ballot argument against Measure O. It was also a win for free speech and the democratic process.
Phil Friedl
Hermosa Beach
Taking the drive out of Beach Drive
Hermosa’s council appears prepared to give away the city’s important right-of-way easement, Beach Drive. At least two councilmembers, Michael DiVirgilio and Carolyn Petty, apparently also see no problem in having a 45-foot tall, 120-room hotel downtown that’s 50 percent taller than the proposed Clash hotel on Hermosa Avenue.
Hermosa’s council would be foolish, without a people’s vote, to cavalierly give away any more air or other rights over narrow Beach Drive for the purpose of constructing bigger monolith-hotels downtown. Beach Drive is the only remaining open space in Hermosa’s downtown for creating a more interesting village ambiance with “Old-World” pathways to shops.
Howard Longacre
Hermosa Beach
