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Press Release - Bankruptcy Judge Finds Beverly Hills Oil Well Does Not Present "Imminent" Harm

FOR

FOR IMMEDIATE RELEASE

Bankruptcy Judge Finds Beverly Hills Oil Well Does Not Present "Imminent" Harm 

Wilmington, Delaware.  On Wednesday, May 31, 2017, a United States Bankruptcy Judge for the District of Delaware, Kevin Gross, ordered Venoco LLC, to remain at Beverly Hills High School to monitor the oil well until June 30, 2017. However, Judge Gross' order states, "beginning at 12:01 AM (PTSD) on July 1, 2017, Venoco shall have no further responsibility to monitor the site." Although Judge Gross found the circumstances "troubling" he ruled the oil well presented, "no imminent and identifiable harm," that would require Venoco to remain on-site to decommission the well, or to reserve funds for that purpose. Beverly Hills Unified School District Superintendent Dr. Michael Bregy characterized the ruling as "incredibly disappointing" adding, "while we accept the judge's order, we cannot help but feel the Delaware judge failed to fully comprehend our health and safety concerns." 

In 1995, Venoco LLC, a private oil and gas driller, assumed operation of the Beverly Hills drill site under the terms of a lease agreement which automatically terminated oil extraction on December 31, 2016, and within 90 days required Venoco, "to restore the drill site to its original condition."  On April 17, 2017, with the drill site still un-restored, Venoco filed for Chapter 11 bankruptcy in Delaware. On April 21, 2017, Venoco informed the District that it intended to walk away from the site on May 31, 2017.  The California Division of Conservation, Division of Oil, Gas and Geothermal Resources ("DOGGR") promptly ordered Venoco to "plug and abandon" the wells in accordance with state law.  The City of Beverly Hills also issued an administrative compliance order directing Venoco to remove all drilling equipment, concrete foundations, oil soaked soil, and debris from the drill site.  The District and City jointly filed suit in Delaware bankruptcy court to compel Venoco to remain on-site, fully comply with environmental laws, and to prevent Venoco from exhausting the debtor estate resources that could be used for that purpose.  Venoco claimed it has no obligation to remediate the drill site because the lease obligations were discharged by bankruptcy. 

On May 25, 2017, the parties presented their case to Judge Gross. Despite the testimony of Mary Jane Wilson, an expert in oil and gas production, that the abandoned wells could present a "substantial risk," Judge Gross opined, "… there is no immediate and irreparable harm as long as the site is monitored." Judge Gross' opinion says that the State, City and District can pursue claims in Bankruptcy court, and through administrative proceedings. "We are exploring all our options in light of this ruling,” stated District counsel William Ireland. 

For further information please contact Chief Administrative Officer, La Tanya Kirk-Carter at (310) 551-5100, extension 2222. 

ABOUT BEVERLY HILLS UNIFIED SCHOOL DISTRICT

The mission of the Beverly Hills Unified School District is to inspire and enable each student to achieve academic excellence and meet the goals of college and career readiness.

 

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