Beverly Hills City Council voted this week to ban oil drilling within city limits, bringing to end decades of oil and gas production on the city's portion of the Beverly Hills oil field.
Though the decision means a loss in millions of dollars in royalties for the city and the school district, council members found oil production environmentally incompatible with their city, Beverly Hills spokeswoman Therese Kosterman said Thursday.
The ban goes into effect December 31, 2016, the expiration date of the lease, which began in 1959.
The decision underscored the challenges of oil production in the midst of a dense urban center. Discovered in 1900, the Beverly Hills oil field, which stretches well beyond the namesake city limits, is just one of dozens within the heavily populated Los Angeles basin that combined churn out millions of barrels of crude a year.
The soon-to-be banned wells are located on Beverly Hills High School property, right next to the school's football field, a site that many community members had long found troublesome, Kosterman said. The towering oil derrick was draped in camouflage material to mask its presence, but the fumes of 19 producing wells on the half-acre site were difficult to ignore, Kosterman said.
The ban translates into a loss of roughly $1 million/year in royalties each to the city and to the school district, along with various royalties to some 800 mineral rights owners.
Denver-based independent Venoco, operator of the wells, doesn't plan to fight the ban, preferring instead to chalk up the city's decision to the vicissitudes of business operations, spokesman Mike Edwards said.
"It's a good little field," he said, adding that it's a minor portion of their overall California portfolio.
"They'll be leaving oil in the ground, but I don't know if it's feasible" economically to drill a new slant well outside of city limits, particularly given the maturity of the field, he said.
