Banning Ranch Saga Continues

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A view of Banning Ranch. — Photo by Sara Hall ©
A view of Banning Ranch.
— Photo by Sara Hall ©

The Banning Ranch property will be back on the agenda next week for the California Coastal Commission. But this time, just the current and future oil operations will be discussed.

In September, the CCC denied a proposed mixed-use project by Newport Banning Ranch, LLC, which manages the planning and entitlement for the owners of the surface rights.

Now, the owner of the mineral rights is seeking a permit to expand their existing oil operations on the land.

Horizontal Development, LLC, has conducted oil and gas production onsite for decades. In May, they filed with the CCC for a permit to expand oil drilling on the site with up to 77 new wells, among other construction requests. The requests will be considered by Commissioners at their Dec. 9 meeting in Ventura.

The plans also include the discontinuation of any of their wells not located within the Oil Remainder Areas, which consist of about 11 acres divided between two of the most heavily industrialized portions of the field. Any of their oil field structures, facilities, and equipment currently outside of those areas will be consolidated into the ORAs new footprint.

However, the majority of oil and gas infrastructure and operations (all but three of the approximately 66 existing active and idle wells) located outside of the ORA sites are owned by the Banning Ranch surface rights owners, Aera Energy (jointly owned by affiliates of Shell and ExxonMobil) and Cherokee Newport Beach, LLC (a private equity firm).

In an agreement with Horizontal Development, Aera and Cherokee still have the right to continue to operate those wells, although the CCC has required in previous cease and desist, and restoration orders, that Aera Energy and Cherokee NB must “abandon 17 of these wells and abandon or apply to the Commission for after-the-fact authorization to retain another 24 of these wells,” staff explains in the report. In total, about two-thirds will either be subject to removal or Commission review.

“This will also serve to significantly consolidate and clean-up oil operations on the Banning Ranch oilfield,” staff concluded.

According to the CCC staff’s 84-page report for these plans, all new drilling sites by Horizontal would also be confined to the ORAs, which are mostly paved areas and not a destination for birds or other wildlife.

The staff report also notes a special condition could be enacted that would require a virtual shut down of nearly all operations on the property between February and August, peak breeding season for birds. Banning Ranch is home to a variety of wildlife, most notably the burrowing owl, which is designated a “species of special concern.”

New construction would take place over the next 20 to 30 years. At most, Horizontal Development could install up to 15 new oil wells per year.

Coastal Commission staff is recommending approval with the provided special conditions. However, the developer whose project was denied in September is still not giving up.

After about 13 hours of discussion on Sept. 7, commissioners voted 9-1 to deny the NBR proposal, which included 895 residential units, 45,100 square feet of commercial use, a 75-room resort and 20-bed hostel, 329-acre nature preserve, and more on a 401-acre site in the 5100 block of West Coast Highway. Commissioner Roberto Urango dissented.

Newport Banning Ranch’s Mike Mohler confirmed that the company filed a lawsuit on Nov. 4 in Orange County Superior Court. They seek $490 million in damages and ask the court to overturn the CCC’s decision.

There were “numerous identified procedural and factual errors,” NBR claimed in a press release. The lawsuit alleges that CCC staff used “extraordinary means to steer the commission to deny the project.”

It is unclear whether a pending lawsuit can influence the outcome of the commission’s decision on the same parcel of land.

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