Freeport McMoRan facility at 1371 Jefferson Blvd. | Stephanie Monte
When the Freeport-McMoRan petroleum company announced last month that it will withdraw a controversial plan to drill new oil wells in South L.A., many residents and activists cheered, hoping for better air quality in their communities.
But the oil giant, which already runs 34 wells in Jefferson Park near USC, says it chose not to move forward with the proposal to drill new wells at its Budlong site simply for economic reasons: declining oil prices are thinning operating margins.
“The decision to withdraw the application was prompted primarily in response to the steep decline in commodity prices,” company spokesman Eric Kinneberg told the L.A. Times.
See also: Community seeks environmental study for South LA oil site
Since the Organization of the Petroleum Exporting Countries, or OPEC, failed to cut its production levels prices on oil have dropped more than 50 percent since July, causing petroleum companies from North Dakota to South L.A. to halt operations and lay off workers.
Last month, California Resources Corp., formerly owned by Occidental Petroleum, announced its decision to drop a drilling project in Carson. The news came after the company spent more than two years trying to obtain a permit to drill 200 new wells at its site near the Cal State Dominguez Hills campus.
And just recently, a drilling project in La Habra Heights was put on hold until the March election that will determine if any new wells will be allowed within the city limits.
But despite the economic causes, residents and activists from South L.A. cheer the drilling project’s withdrawal, and hope their community outcry played the role.
Residents of South LA speak in front of city planners in November 2014 about Freeport’s operations. | Olga Grigoryants
More than 150 residents and activists from South L.A. filled out a room to testify in front of a city planner last November when Freeport sought a permit to expand their site. The community members said noxious fumes, loud noises and truck traffic near their homes made them concerned about detrimental health effects.
See also: West Adams neighbors seek to oust oil production
While residents still fight against other oil operators, Los Angeles city officials have been drafting an ordinance to ban hydraulic fracturing, also known as fracking, and other types of well stimulation. City planners released a report with recommendations in November.
While Los Angeles officials debate the issue, other cities are already taking action. Beverly Hills, Compton and Carson are drafting their own ordinances to cease fracking.
In the meantime, South L.A. residents will still celebrate the Freeport’s proposal to pull out some of its oil drills.
“We suspect there are multiple reasons for their withdrawal,” said Brett Shears of the North Area Neighborhood Development Council. “This is a major victory. But the struggle over urban oil drilling will continue.”
Like Intersections on Facebook, follow us on Twitter and sign up for the Newsletter to stay in the loop on news and views from South L.A. Follow the author on Twitter at @OlgaGrigory.
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