AllenCo oil company to pay $1.25 million to LA in lawsuit settlement

For years, residents of the University Park neighborhood of South L.A. complained about nose bleeds, dizziness and breathing problems that they blamed on emissions from production wells operated by the oil company AllenCo. On Thursday, they received some closure. 

Los Angeles City Atty. Mike Feuer announced the city had settled its public nuisance lawsuit against the company. Under the terms of the settlement, AllenCo cannot begin pumping oil again until it meets all federal, state and local environmental rules.

But some local residents say the settlement doesn’t go far enough. They want a guarantee AllenCo will never be able to operate again.

The settlement comes after years of fighting for recognition that there was a problem with emissions coming from the facility in the 800 block of West 23rd Street.

Nancy Halpern Ibrahim is executive director of Esperanza Community Housing, which is close to the AllenCo site. She said people in the neighborhood began getting sick in 2010 right as AllenCo was starting to increase oil production at the site. At the time, residents began complaining to the South Coast Air Quality Management District about strange new odors.

“It smelled at various times like petrochemicals, rotten eggs, and we’d get terrible masking odors that smelled like overripe guavas or strawberries,” Ibrahim said. “Cloyingly sweet smells that were clearly chemical masking agents.”

When they felt their complaints weren't being adequately addressed, residents began to organize. They hung a protest banner across from the AllenCo site that got the attention of U.S. Sen. Barbara Boxer. (The banner read "People not Pozos." Pozos is the Spanish word for "wells.")

Boxer brought in inspectors from the Environmental Protection Agency who reported being sickened during their site investigation. That drew the attention of City Atty. Feuer, who filed a lawsuit in January 2014 against AllenCo for violating city rules and state laws.

Under the terms of the settlement, the company agreed to pay $1.25 million in penalties, half of which will go to the city attorney’s office. The other half will go to L.A. County.

Feuer said his office will use the money to hire an environmental justice investigator who will look into urban oilfield issues elsewhere in L.A.

“Our office, as this lawsuit demonstrates, has the capacity to stand up for folks who think they’ve been burdened by environmental issues,” Feuer said. “Having an investigator puts us on the ground in such communities and gives us more access to information in a timely way so we know whether we should be intervening.”

The settlement also makes it impossible for AllenCo to begin operating in the future unless it complies with environmental rules and regulations on all levels. And if that happens – which Feuer said he doubts – the company must install an emissions monitoring system that provides real-time data to the public on a website.

“Before this court order there was no ability for anyone in the community to identify whether a symptom they might be feeling could be related to an emission from this site,” said Feuer. "[Now] if there are any health issues that exist in the community, they can see whether there’s a correlation between any emissions from this site and those issues.”

Assuming AllenCo meets all conditions and begins to operate again, it will have to shut down immediately if emissions are detected that exceed thresholds set by the city. Long term, low-level emissions can also trigger a shutdown. “That is an extraordinary result for this community,” Feuer said. “There is no such rule anywhere in the country as far as we know.”

But for Monic Uriarte, who lived across from AllenCo from 2004 to 2014 and works for Esperanza Community Housing, the settlement doesn’t go far enough.

“I think they need to shut down permanently,” she said. “These agencies are using communities as a detector for the problems or the accidents with these facilities, and it’s not right.”

Uriarte and Ibrahim are currently involved in a campaign to ban urban oil production entirely within Los Angeles.