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Freeport McMoRan's Burning Desire - An Interview with Steve Peckman

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Details: Category: Community News; Published on Friday, 05 June 2015 15:57; Written by D.V. Lawrence

In an effort to keep oil giant Freeport McMoRan and the City engaged in a process that ensures fair play, transparency, and accountability to protect the health and welfare of their community, Steve Peckman and Michael Salman, with the help of Council President Wesson forced Freeport back to the table for community review and a reconsideration by the Planning Department of one of their projects. "We want the City government oversight of oil to demonstrate integrity and reflect respect for our community." said Steve.

TNN:What was this recent session at city hall about?

Steve :The hearing was the result of a Plan Approval case submitted to the Planning Department by Freeport McMoRan Oil & Gas (FMOG) for permission to install a 24 foot tall Clean Emissions Burner (CEB) 800 gas burner in the parkland at 27th and St. Andrews. This is located below their active Murphy drill site at Adams and Gramercy in Jefferson Park. The park and drill site are all on the same parcel of land and divided by a wall. FMOG also requested permission for trucks to enter the park via 27th Street, and for an exemption from environmental review.

All three requests by Freeport are points of contention between the community and the oil company. The oil company claims they can use every inch of the parcel from Adams to 27th Street for oil and gas activities but the community has stated that according to historic precedent - that is every Zoning Administrator decision since 1961 - the active drill site has only been allowed within the walled compound north of the 30 foot high concrete wall that separates the drill site from the parkland.

Historically, FMOG and its predecessors have not been allowed to initiate any oil activities in the parkland south of the wall. But now FMOG wants to put the burner in the park, and they want to have an exemption from environmental review. The trucks they want entering the site to install and service the burner via the residential neighborhood of 27th Street, have not been allowed by every Zoning Administrator since probably 1961 as well.

TNN:Do the trucks need access for any other purpose?

Steve :It's unclear. Those were the requests in the Freeport application: the burner, the exemption from environmental review and the trucks.

TNN:Did they get it?

Steve :Last year the planning department did approve the requests but without required review and approval and without any community or environmental review. So Michael Salman and I separately appealed that decision to the Area Planning Commission. The appeals were withdrawn after we and Freeport agreed to a deal brokered by Council President Wesson that assured us, the community, that Freeport would submit a full plan approval case for Zoning Administrator review at a public hearing. The hearing on Tuesday May 12 was the outcome of that agreement. The hearing gave Freeport an opportunity to present its plan and the community had an opportunity to respond to that in a public forum that would be heard by a Zoning Administrator. Zoning Administrators have a quasi-judicial role in this case and the Zoning Administrator quoting President George W. Bush’s self-description, referred to himself as “the decider”. He will take all comments under consideration, as well as communications from anyone else who cares to weigh in on it. The Adminstrator said that because of his workload and the number of comments he's been receiving to date he was going to leave the file open for at least an additional thirty days to receive more comments and will make a decision at a certain point in time, in writing. At which point both sides or others will have an opportunity to appeal his decision to the Area Planning Commission.

TNN:So right now you are at the hearing stage with the Zoning Administrator.

Steve:Yes. More than 150 people showed up for the hearing. Many people were from our community and some people appeared to be Freeport employees and supporters.

TNN:How many people got up to speak?

Steve :The lawyer for Freeport gave an extended presentation. Her name is Amy Forbes. Then the Zoning Administrator allowed three other parties to give presentations: Laura Meyers, Planning & Zoning Chairperson of the UNNC, representing the position of the UNNC, Michael Salman as a previous appellant and me. We each had about fifteen minutes to present our case which was quite exceptional. Then he opened it up to anyone present who wanted to make a comment limited to two minutes a piece.

TNN:How many other community people got up?

Steve :Around twenty maybe. Some of the people from the neighborhood that commented were, Louis South, Renee Gunter who also designed the parkland, Chris Kao, Estella Zarate, Lizzie Moromisoto, Marina Moevs, Donna Ann Ward. Damon Nagami of the National Resources Defense Council and Malcolm Carson of the Community Health Councils also spoke in support of the community.

TNN:How long did the whole thing last?

Steve :Over two hours. At the end, Sylvia Lacy, representing Council District Ten, stood up and spoke and said that the Council District also requested that the Zoning Administrator leave the file open at least thirty days for comment and indicated Council President Wesson intended to bring the parties together in the hope of getting a negotiated agreement between the company and the community. That was news to us.

TNN:What does a negotiated agreement look like? Trucks only two days a week?

Steve :I don't know. We haven't received any proposals for compromise from the company or from CD Ten. None were made on May 12th.

TNN:Did Ms. Lacy say when or where?

Steve :No. We will follow up with Sylvia but there were some interesting points presented by Freeport during the hearing that have resulted in members of the community, principally Michael Salman and Laura Meyers, doing a lot more research and one of those items appears to indicate that Freeport is in a bit of a bind regarding burning natural gas. To date, Freeport has been burning gas at the Murphy site though the use of five microturbines that have never been approved by the Planning Department. So they've been selling gas to the gas company and using the microturbines to burn gas.

TNN:How does that work?

Steve :When you drill for oil you get three things out of Mother Earth: One of the things you get is real brackish water. The other thing you get is natural gas.The third thing you get, if you're lucky, is oil. The water they pump back into the ground. The gas, about 90% of it, Freeport has been selling to the Gas Company to power the Gas Company’s natural gas vehicles, and some of it, about 10% is burned to drive the turbines which generate electricity for the oil site so Freeport doesn't have to buy all their electricity from the Department of Water and Power.

TNN:Fair enough.

Steve :What Freeport appeared to reveal during the hearing is that laws about selling gas have changed. In one of Amy Forbes’ PowerPoint slides, she referenced a change to something called “Rule 30”. After much research after the hearing we’ve begun to understand The Gas Company’s Rule 30. As approved by the California Public Utilities Commission (CPUC), Rule 30 provided an exemption from certain rules, to oil companies that have been sending gas through existing pipelines to The Gas Company. In about two years, a change in Rule 30 will remove that exemption and restrict the oil company’s ability to continue selling the 90% of the unrefined natural gas to the Gas Company that FMOG does not burn at the Murphy site. The oil companies operating at the Murphy site have been shipping gas through a pipe line to the gas company since about 1961, those lines were grandfathered [allowed to bypass changing rules] under Rule 30 and that grandfathering will be eliminated as a result of the change in Rule 30 because the state, city and the public, are concerned that the unrefined corrosive components of natural gas are damaging the pipes and that compounds in the gas that escape from the pipeline, such as methane, are contributing to greenhouse gases and global warming. So Freeport will no longer be able to sell unrefined gas, natural gas to the Gas Company. That leaves them with one option.

TNN:Which is?

Steve :To burn all of the gas.

TNN:That's why they want the burner?

Steve :That's why they want the burner. On top of that the Murphy site is tied underground by a gas pipeline to the Jefferson and Budlong site and all of their gas has been going to Murphy. So If they're going to burn all the gas from Jefferson and Budlong and all of the gas from the Murphy site, at Murphy, well that's a lot of gas to be burned in the park less than sixty feet from the St. Andrews Apartments and in the Jefferson Park/Kinney Heights neighborhoods, which the LA Times cites as one of the most densely populated in Los Angeles County, more than 16,000 people per square mile.

What's interesting about the hearing is that Freeport didn't come out and explain Rule 30. What they did was present a Power Point that included a reference to this thing called Rule 30. None of us knew what Rule 30 was but we knew from what Freeport said that they were going to be constrained by Rule 30.

TNN:The info about Rule 30 is what led you guys to research after the meeting?

Steve :Yes. Michael Salman did the research on what the hell Rule 30 is and we're starting to piece the story together. By not presenting the full scope of the project, FMOG can try to claim an exemption from environmental review by submitting separate isolated component parts and claiming each independent project does not have an environmental impact meriting environmental review. We would disagree with Freeport even on that point as we believe that placing the burner in the parkland does indeed have an impact warranting environmental review.

Regardless, the information about Rule 30 is critical. As we pointed out during the hearing, Freeport changed the story several times over the last couple years about why they need the burner. Now if what we find is true about Rule 30, that in two years they will no longer be able to sell the extra gas to the gas company, then the burner installation is part of a larger project to burn all of the gas from Jefferson and Budlong and from Murphy (instead of selling it to the gas company)…at this one site at Murphy, which from our calculations, could be a million cubic feet of gas everyday. They need the burner because the five existing microturbines are insufficient to burn all of the gas from Murphy and Budlong. The larger plan has never been presented publicly by Freeport to the Planning Department. This is called “piecemealing a project”.

We have been accusing Freeport of presenting a moving target of a project and piecemealing this project. When you're subject to CEQA [environmental review] piecemealing is illegal.

TNN:What do you mean by piecemealing?

Steve :Piecemealing means that you do not reveal the full scope of the project in order to avoid environmental review. The practice of piecemealing was declared illegal by California courts. For example, an applicant has a large project it wants to complete. Instead of revealing the large project the applicant says we're going to do this simple little project and that is the total project. Later the applicant returns to the Planning Department and says we're going to do another simple little project and that is the total project. The applicant never reveals the full scope of the project. By not revealing the full scope of the project as originally planned, the applicant could be exempt from CEQA for each request because each individual part does not trigger environmental review. But when you look at all the parts together, the totality of the project, it would never be exempt from CEQA. So it's a way to hide the parts of the project to avoid an environmental review. The Murphy site has never undergone environmental review since the passing of CEQA laws in 1970.

TNN:What happens if they can't burn the gas?

Steve :Perhaps they could reinject the gas into the ground but that again is a much larger project. If they don’t reinject the gas into the ground and they can no longer sell the gas, then they have to shut down because they can't do anything with the gas and gas comes up out of the ground with the oil.

TNN:They'd have to just stop using that site to drill for oil at Jefferson/Budlong and Murphy…

Steve :Both because they're all connected.

TNN:That’s explosive! No pun intended. Couldn’t they burn at the Jefferson/Budlong site?

Steve :The Budlong site, abuts residences on two or three sides, is not equipped or approved to burn anything, and may not have the space for a burner.

TNN:That's huge.

Steve :It's a pretty big revelation. Now we're beginning to understand the full extent of the project, its impact on oil production and the neighborhood, and how badly Freeport needs to have a burner, unless, they could come up with some creative option. Currently the microturbines are able to take the 10% of the gas not sold to The Gas Company and burn it and generate electricity for the Murphy site.

TNN:There you go.

Steve :Then they'd actually do something good for the community. I'm trying to be fair about all this.

TNN:That's exactly right.

Steve :Useful right? One of the other things that was noted during the hearing is that there are three sites owned by Freeport in the West Adams area. Jefferson and Budlong, Murphy which is at Gramercy and Adams, and one at Fourth and Washington. Fourth and Washington has not been operating in a while. One of the claims that Freeport keeps making is they don't have room at the Murphy active drill site to add additional equipment. That is why they claim the burner must be installed in the parkland. What we've been asking them to do is to research what it would take to put the additional equipment at Fourth and Washington. They're not using it as a drill site anymore but they still operate the site. So, Freeport could just have the pipeline pump the gas from Jefferson/Budlong, and Murphy to Fourth and Washington after it is scrubbed clean and the wells are capped. The gas could be burned by microturbines, enclosed in an appropriate structure that protects the neighbors and turns the gas into electricity to feed the grid. The heat generated could also be used to heat and cool the Carson-Gore School.

TNN:What do they say when you suggest that.

Steve :They have not weighed in on the suggestion. What they've consistently said is, we submitted our request, this is what we want to do, that they have every right to ask for this to happen and the city has no right to tell them no; so approve it now.

TNN:That's how they roll.

Steve :Right, but we object to that and we're going through the formal Planning process requesting that Planning require Freeport to submit an application that completely describes the project. The community has been very engaged and like I said more than 150 people showed up at the hearing. No one spoke out for the project, except for Amy Forbes as Freeport’s lawyer and perhaps one person from the community but his position was unclear.

TNN:So you have time, thirty days to submit this information, correct?

Steve :Yes and that is what we are going to do. We're going to ask that Council President Wesson work with Freeport to encourage them to withdraw their current application and submit a complete application that thoroughly details the scope of the entire project.

TNN:Why wouldn't you also ask him to put these options on the table, the turbine and the Fourth Avenue option.

Steve :We provided the Council office with our ideas and have not yet received a response. We, hope that the next UNNC board meeting on June 4 will result in a UNNC letter to the Zoning Administrator, the Planning Department and Council President Wesson with our request for a new Freeport application to Planning and these alternative options for the gas. And that's where we're at.

If you are concerned about these issues and want to write a letter of support for this effort send it to

Herb Wesson

Los Angeles City Council President

District Office

1819 S. Western Avenue

Los Angeles, CA 90006

Or email:

Los Angeles City Council President Wesson This email address is being protected from spambots. You need JavaScript enabled to view it.

AND his deputies: Sylvia Lacy This email address is being protected from spambots. You need JavaScript enabled to view it.; Deron Williams This email address is being protected from spambots. You need JavaScript enabled to view it.

And to:

Charles Rausch

Zoning Administrator

Los Angeles City Planning Department

Office of Zoning Administration

200 N. Spring Street, Room 763

Los Angeles, CA 90012.

Re: Case #ZA 15227(O)(PA5)

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