John McKeown has a dream.
His dream is shared by many environmentalists, bird lovers and city officials. The difference is that McKeown’s company, Synergy Oil, owns the land central to that dream — the Los Cerritos Wetlands.
At least Synergy owns the 152 acres of wetlands north of Second Street and east of Pacific Coast Highway. McKeown, Synergy’s CEO, explained plans to restore those wetlands last week at the Belmont Shore Residents Association meeting.
Synergy now owns the property once owned
by Bixby Land Company and more recently by LCW Partners. The principals in that group, Tom Dean and Jeff Berger, were killed in 2011 in a
plane crash at Long Beach Airport.
“I was friends with those men, those families,” McKeown said. “They asked me to come in and operate the oil field, sell the land.”
Once a sale was arranged, the buyers asked McKeown to stay on as CEO of the new company. He said that he slowly awoke to the value of the wetlands as he worked to upgrade an oil operation he said was “in dire straits.”
Synergy currently has 58 operating wells, more than 66,000 feet of pipeline and oil storage facilities on the property. McKeown said the oil field Synergy pumps from is only 7% to 10% depleted, with easily 200 million barrels of oil still to be recovered.
McKeown said that in order to restore the wetlands, it was clear oil operations have to move. That has become possible with recent advances in oil drilling, allowing for diagonal and directional wells instead of the traditional straight down method.
Enter Lyon Communities LLC. Several years ago, Lyon purchased the parcel south of the Marketplace shopping center known as the Pumpkin Patch. But residential development there would require state Coastal Commission approval as well as city permits. Lyon offered the parcel to Synergy as a potential site for slant drilling.
McKeown said the plan has since evolved into using the Pumpkin Patch and a 5-acre parcel east of Studebaker Road now owned by the Los Cerritos Wetlands Authority as a second drilling site. Two sites are necessary because the Newport-Inglewood Fault runs directly underneath the oil field; wells from the LCWA site would reach east of the fault while Pumpkin Patch wells would go west.
Removing the oil operation from the wetlands is expected to cost $80 million, with new wells costing another $5 million to $7 million to drill. Another $6 million to $7 million will be needed to do the restoration work and make the wetlands accessible to the public, McKeown said.
In order to help finance the effort, McKeown wants to get approval for a private mitigation bank, where entities such as the Port of Long Beach could purchase mitigation credits for development of coastal areas. Credits currently sell for about $400,000 an acre. That would total about $31 million if a credit was sold for every Synergy Oil acre of land.
“Synergy would be footing the rest of the bill,” McKeown said. “That’s what keeps me up at night, worrying if I’ll keep my job. It’s another reason to worry about the price of oil, too.”
Synergy is working with Glenn Lukos Associates to plan for the restoration. Environmental specialist Thienen Pfeiffer made the restoration presentation. She said the work would start at the Steamshovel Slough at the west end of the wetlands because it is the area where there are no active wells. Work there and removal of the 63,000 feet of pipe that isn’t being used now would be the second phase of the project, restoring 71 acres of land.
The first phase of work is the planning and approval phase. Synergy is working with city officials to prepare the CEQA (California Environmental Quality Act) documents, with the city acting as the lead agency for an Environmental Impact Report. A contract for that study still has not gone out to bid.
Some work already has started. About half of the Fan Palms on the Synergy site were removed last year, with the rest scheduled to be taken out this year. The palm trees are an invasive species, Pfeiffer said.
Restoration could begin in 2018 if approvals are received. The wetlands project is seeking approval separately from the ongoing redo of the SEADIP (Southeast Area Development Improvement Plan) because it is specific to the three parcels of land, McKeown said.
A website specific to the restoration plan is being launched this week. The address is www.lcwetlandsrestoration.com.
Harry Saltzgaver can be reached at email@example.com.