Stop Hermosa Beach Oil activist George Schmeltzer says, “Don’t believe the oil hype”
George Schmeltzer. Photo by Alyssa Morin
With under three weeks to go until Hermosa Beach votes on removing an oil drilling ban, local anti-oil activist George Schmeltzer is getting anxious.
“You just can never tell,” he said, sitting in his home on Valley Drive, just blocks from the potential drill site. “But we have done what we had to do and will continue to do so up until election day.”
For Schmeltzer, it’s been a three year battle against E & B Natural Resources, the oil company requesting to place 30 oil wells at the city maintenance yard in Hermosa Beach. As a retiree, he has been able to be one of the most active members of Stop Hermosa Beach Oil. He thinks his group has gotten the word out well about the physical and environmental dangers of oil drilling in the dense beach city.
“It’s a dangerous business and has potentially awful environmental impacts,” he said. “I think people understand that. But I don’t think they understand the risks on the financial side.”
Schmeltzer says there would be tremendous upfront costs to the city no matter what, especially with the moving of the city yard. He is also greatly concerned about housing values.
“Using the Zillow app and looking at the 1,000 residences around the site there is about a $1.3 million average asking price,” he said. “If housing values drop ten percent, that’s a huge hit right out of homeowners’ pockets. I can’t even conceive of a tax that would hit homeowners that hard.”
E & B has set up a Property Protection fund of $25 million to reimburse homeowners that lose property value when selling their homes.
“Twenty five million is peanuts,” Schmeltzer said. “We’re looking at 130 million in lost value. Like a lot of things E & B has done, it’s just eye candy. There are no guarantees at all.”
He said that decreased property values would also mean reduced property taxes and therefore less revenue for the city.
“I don’t think there will be a Realtor out here taking people to see homes for those five years of drilling,” he said. “Can you imagine a Realtor taking a couple out on the deck of a home when there is a 110 foot rig next door?”
Schmeltzer believes E & B has exaggerated the financial situation of Hermosa and the revenues oil would amass, especially in light of plummeting oil prices, in order to paint themselves as heroes to the city.
“In the Prop 13 era, when property taxes were cut, things were tough,” he said. “I think our city’s future is brighter than ever now. And better without oil.”
In 2012, Hermosa settled what some projected as a $750 million lawsuit with MacPherson oil. E & B bought out MacPherson’s project rights for $30 million with the promise that Hermosa voters would take to the polls and decide whether or not to life the oil drilling ban. If the ban is not lifted, the city will pay $17.5 million to E & B.
Current councilman Mike DiVirgilio was one of the negotiators of the settlement and current Mayor Pete Tucker voted to approve it. Now both men have spoken out against oil drilling in their city.
“When you look at the makeup of the council, two who voted for the settlement now are against oil,” Schmeltzer said. “You either believe them — the people you voted for, the ones you know and live next to–or you trust an oil company.”
“When Pete Tucker says the city is in pretty good shape and he doesn’t want it to become an oil town that means a lot more than folks coming in from Bakersfield telling you there’s a pot of gold under us,” he said.
Schmeltzer says that the $17.5 million the city would owe could be paid back with help from unencumbered property the city owns and could sell and from Transient Occupancy Tax from the new hotels coming in. He doesn’t see those hotels being very successful if oil drilling comes to Hermosa.
“You don’t get $400 per night hotel rates if you’re looking onto an oil field,” he said.
Regardless of the outcome on March 3, Schmeltzer is proud of how the city has acted throughout the campaign process.
“What we’re seeing in our canvassing, throughout the city, is that they’re unable to split us, to drive a wedge in our community,” he said. “There’s no north versus south, east versus west or council versus school board. They can’t divide us.”