Occidental Spin-off Corporation Pulls from Carson Oil Drilling Project

California Resources Corp. halted operations in Carson because they lacked profitability.
By Crystal Niebla, Editorial Intern

Carson residents rejoiced this past week when California Resources Corp., the spin-off corporation of Occidental Petroleum Corp., announced it would be pulling out its massive drilling project of more than 200 oil wells on a site in Carson.

“Over three years we’ve been battling them, and now we finally got them running in the other direction,” said Dianne Thomas, vice president of Carson Coalition, a leading organization that has challenged OXY since 2011.

On Jan. 26, the corporation’s spokeswoman Margita Thompson said in a statement that the project “is no longer practical in the current commodity price environment, and we are asking the [c]ity to stop processing the project.”

OXY proposed the construction and operation of a new oil and gas production facility that would use a part of the out-of-production Dominguez Oil Field, according to Carson city records.  The corporation planned to install several operations, including the construction of 202 wells, an oil and gas processing facility and slurry injection or disposal operations.

“Because of the oil industry, they will not admit defeat,”Thomas said. “It is better for them to say, ‘We’re pulling out because of the profitability of the project,’ because they certainly don’t want to say that they were defeated by some small-town group of people.”

Carson Coalition President Robert Lesley said he attributes the victory to community members, legal advice from organizations such as Earthjustice and Sierra Club and the plummeted oil prices.

“If we hadn’t been filing the complaints and comments and opposition to this thing, it would have been in place over two years ago,” Lesley said.

When OXY gave its construction and operation proposal, the company changed its plans from using hydraulic fracturing, or “fracking,” to hydraulic drilling instead, Lesley said. Carson Coalition filed complaints on that, he said.

Thomas said it makes more business sense for the company to pull out at this point.

“When Occidental did their tours [in Carson], it was stated during one of their tours that, if the price per barrel of oil ever dropped below $60 a barrel, it would not be profitable for them to move forward with this project,” Thomas said. “So, with the price dropping down all the way to the 40s…the cost for them to build this project, it would have not benefited them at all.”

According to NASDAQ, a national stock exchange, crude oil per barrel costs dropped nearly 50 percent within the last six months — plummeting from $95 to $48 per barrel.

If oil prices rise and corporations like OXY return to Carson for drilling projects, Carson Coalition is already preparing with laws to bar corporations from coming back. Thomas said that Carson Coalition wants an ordinance in place that will protect the residents of Carson from further projects “of that nature” that may affect the health and welfare of the residents.

“These corporations tend to go first after areas where you do have a large minority population, and they do that because they think that the minority population will not fight,” she said.

Thomas said that the Carson Planning Commission will host an open meeting that will take place in the Council Chambers to review the ordinance with residents sometime within the next two months.