77 new oil wells approved for Banning Ranch, after Coastal Commission rejected plan for 900-plus homes

Dec. 9, 2016
Updated 4:18 p.m.
Pipes and oil wells dot the landscape at Banning Ranch in Newport Beach. (Photo by JEFF GRITCHEN, Orange County Register/SCNG),

Three months after rejecting a plan for 900-plus homes, a hotel and shopping on Banning Ranch in Newport Beach, the California Coastal Commission on Friday approved a request to add as many as 77 new oil wells to the property over the next 30 years.

The 8-1 vote frustrated but did not surprise those in the community who have pushed to turn the environmentally sensitive, 401-acre property -- much of which has been used for oil exploration since World War II -- into a nature preserve.

“We have varying degrees of disappointment,” said Steve Ray, executive director of Banning Ranch Conservancy, an environmental group that has opposed development on the land.

Many believed they had taken a step toward winning their 20-year battle in September, when the Commission rejected the development proposal by Newport Banning Ranch, a vote that came after staff scientists said the development proposal didn’t leave enough open space for burrowing owls and other rare species.

Approval of the oil wells isn’t connected to other development on the property. The consortium that wants to build on the property said Friday it took no position on the oil project. Also, there is no plan to drop a $490 million lawsuit filed by the developer against the Coastal Commission after its development was rejected.

The property, which runs from the coast in Newport Beach to the edge of Costa Mesa, has been an oilfield since the 1940s, decades before the Coastal Commission, which was established in 1972.

About 100 wells are on the site, though only some are operational on a regular basis.

Some commissioners said their hands were tied in deciding to approve more wells.

“I don’t think we have that authority to stop all oil drilling,” said Commissioner Effie Turnbull-Sanders. “I think that is something we are required to do under the law given the circumstances and given the tight constraints staff has taken to make sure this is done in a responsible way.”

Ray said his group has worked with Coastal Commission scientists for several months and, in his view, won some concessions in terms of how the new wells will operate.

Approval to build new wells came with 23 conditions, including a requirement to keep a buffer between the oil operations and environmentally sensitive areas and another that will restrict drilling during peak breeding season for birds, which is between February and August.

Fracking, a controversial practice of oil extraction, isn’t feasible at Banning Ranch and isn’t being considered at the property, according to Commission staff.

It’s unclear if more drilling will be sought in the area, or if the oil operation agreed to Friday is part of a broader push to eventually get housing on the parcel.

Oil drilling at Banning Ranch involves a number of companies, not all of which are part of the deal approved Friday.

The entity that won approval Friday, Horizontal Drilling, could add up to 15 new wells each year in specific parts of the southern strip of the parcel, which borders Pacific Coast Highway, and in another part of the land farther north. Both areas are largely paved and have little in the way of rich biodiverse habitat though there are substantial wetlands nearby, coastal commission staff wrote in a report.

Another entity, Aera Energy, owns 66 wells on other parts of the property. Aera is expected to abandon 41 of those wells or seek permits to continue operating them as part of an earlier agreement with the Coastal Commission.

Area Energy also co-owns the property and is invested in developing the land with Newport Banning Ranch.

Contact the writer: lawilliams@scng.com