{"id":69742,"date":"2025-11-25T21:45:08","date_gmt":"2025-11-25T21:45:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/69742\/"},"modified":"2025-11-25T21:45:08","modified_gmt":"2025-11-25T21:45:08","slug":"who-most-needs-profits-from-long-beachs-oil-long-beach-business-journal-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/69742\/","title":{"rendered":"Who most needs profits from Long Beach\u2019s oil? \u2022 Long Beach Business Journal"},"content":{"rendered":"

Disagreement over who deserves the profits from oil being pumped<\/a> out of Long Beach has pitted the city\u2019s budget needs against the state\u2019s and led to a flurry of lobbying as local leaders race to strike a deal.<\/p>\n

The city has approached its state delegates with proposals on how to claim a greater share of oil revenue \u2014 which mostly goes to the state \u2014 for services along the shoreline like lifeguards and public safety.<\/p>\n

The city\u2019s representatives in the state Legislature, however, say any additional money given to Long Beach will come at the cost of state priorities, like health care, homelessness and schoolchildren.<\/p>\n

In a recent call, state Sen. Lena Gonzalez implored city leaders to face the harsh reality that \u201cevery city in her district,\u201d as well as the state, is facing financial hardships.<\/p>\n

\u201cWe\u2019re not going to be able to patch all the holes that you have in the budget,\u201d Gonzalez said.<\/p>\n

Under the current agreement, the state takes 42.5% of oil revenue, compared to the city\u2019s 8.5% share as the designated trustee of the land. The remaining 49% goes to the oil operator, controlled largely by the California Resources Corporation.<\/p>\n

A reasonable share of revenue for the city, Councilmember Kristina Duggan argues, is 20% and 30%. That is one of several proposals<\/a> that the mayor\u2019s office floated, with others seeking to claim the interest off the state\u2019s fund to eventually cap abandoned wells.<\/p>\n

It\u2019s the \u201cnumber one lobbying issue\u201d for the city, said Mayor Rex Richardson, as the state Legislature is set to return from its winter recess in January.<\/p>\n

Long Beach\u2019s budget has for decades relied on revenues from the Wilmington Oil Field, the nation\u2019s third-largest reservoir<\/a> that nets about 46,000 barrels a day.<\/p>\n

The field goes about as far north as Ocean Boulevard, almost reaching the breakwater to the south, and encompasses some of Long Beach\u2019s most precious assets: the beaches, marinas and Convention Center.<\/p>\n

The city\u2019s revenue from the field is earmarked for its Tidelands area, a 24-square-mile swath of ocean and coastline<\/a> from the Orange County line through downtown Long Beach to the ports of Los Angeles and Long Beach.<\/p>\n

For the first time, the Tidelands Fund is expected to run a deficit in 2026, with future shortfalls projected to range between $6.2 million and $10 million through 2035.\u00a0 This is fueled by declines in oil revenues \u2014 about $300 million<\/a> over the next 10 years \u2014 and legislation that limits new oil drilling.<\/p>\n

Losses could put at risk $1 billion in outstanding coastal projects<\/a>, including a deteriorating Naples Island seawall<\/a>, a long-delayed Belmont Aquatics Center and costly upgrades at the Convention Center.<\/p>\n

\"\"Oil island Grissom with the Long Beach Peninsula and Alamitos Bay in the background on Thursday, Oct. 1, 2020. Photo by Thomas R. Cordova.<\/p>\n

But problems are not exclusive to Long Beach, Gonzalez said, citing the state\u2019s $18 billion deficit<\/a> in the most recent fiscal year. Early estimates<\/a> project upwards of a $35 billion deficit next year, fueled by growing debts.<\/p>\n

Coupled with federal cuts to health care and homelessness services<\/a>, Gonzalez said the state\u2019s wallet is under pressure from subsidizing $6 billion more for Medi-Cal losses, major clean energy projects and cuts to K-12 programs and community colleges. Telling other legislators to sacrifice those priorities for Long Beach would be a tough sell.<\/p>\n

\u201cWhat are our colleagues going to ask us? \u2018Well, what are they spending the money on?\u2019 Well, an Olympic-sized pool\u2026 Naples sea walls\u2026,\u201d she said. \u201cIt\u2019s not like I\u2019m not prioritizing this, or it doesn\u2019t matter. It does, but how do we sell that when we\u2019re cutting rural hospitals? How do we sell that when we\u2019re cutting all of these other services?\u201d<\/p>\n

Long Beach Assemblyman Josh Lowenthal said that reopening the revenue split formula could bring \u201cunintended consequences,\u201d saying it could lead some state leaders to send funding into programs \u201cthat don\u2019t serve Long Beach\u2019s interests.\u201d<\/p>\n

\u201cOur responsibility is to ensure that any action we take protects the city\u2019s interests and those of the ultimate owners of these mineral rights \u2014 the people of California,\u201d Lowenthal said.<\/p>\n

The state is also well behind its obligations \u2014 about $700 million \u2014 to save up for the eventual cost to plug wells, remove derricks and restore public lands after oil operations end in 2035.<\/p>\n

City estimates show total abandonment and decommissioning will cost $1.36 billion statewide, including $205 million for Long Beach.<\/p>\n

Gonzalez passed legislation last year that ramped up the state\u2019s annual savings for that future cost \u2014 from $2- to $5 million \u2014 but it\u2019s still not expected to be enough to meet the state\u2019s deadline.<\/p>\n

Mayor Richardson, though, says he remains optimistic about reaching a deal, and it\u2019s premature to say \u201cwe\u2019ve seen resistance.\u201d<\/p>\n

\u201cAll we are looking for in this moment is strong partnership with our state delegation and a willingness to work together for the needs of Long Beach,\u201d he said.<\/p>\n

He positioned the city\u2019s ask as a reasonable, short-term fix to access money that is already earmarked for Long Beach anyway. His favored plan is to siphon a small chunk of interest \u2014 $10 to $15 million annually \u2014 from the state\u2019s fund to decommission<\/a> oil fields, through 2035. By that time, Richardson explained, the city will have realized its bonanza as an entertainment hub, with a fully operational amphitheater and renovated Queen Mary, among other examples.<\/p>\n

Without wanting to comment directly on the matter, the governor\u2019s office said on Nov. 20 that it remains open to ongoing dialogue with the city and state legislature.<\/p>\n

Editor\u2019s note: This story has been corrected to show the city has proposed putting money toward services in the tidelands area, not infrastructure projects.<\/p>\n","protected":false},"excerpt":{"rendered":"Disagreement over who deserves the profits from oil being pumped out of Long Beach has pitted the city\u2019s…\n","protected":false},"author":2,"featured_media":69216,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[131,133,132],"class_list":["post-69742","post","type-post","status-publish","format-standard","has-post-thumbnail","category-long-beach","tag-long-beach","tag-long-beach-headlines","tag-long-beach-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/69742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=69742"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/69742\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/69216"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=69742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=69742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=69742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}