whittier main field oil project

8/7/2019 Whittier Main Field Oil Project

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The Whittier Main Field Oil ProjectBalancing our Environmental and Economic Future


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Introduction

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Table of Contents

Introduction.........................................1

History ................................................2What the EIR Recommends .................3

Environmental Stewardship.................6

Benets................................................7

Conclusion ........................................13

WhittierMainFieldOilProjectBenefts: Minimumof$7.5millioninnewrevenuesayear

forWhittierat1000barrelsofoilperday[BOPD]

Projectdesignedformaximumrateof10,000

barrelsoiladay[BOPD] Eachadditional1000BOPDbroughtinbyMatrix

wouldgenerateaminimum$7.5millionayear

Itisanticipatedthattheprojectwouldcreatea

signicantnumberofjobsandcontractsin

Whittier Independentanalysisconcludedthatproperty

valueswouldremainstableandsecure.

EIR recommendedConsolidated Central Site

In 2008, Matrix Oil and its partner Clayton Williams Energy, Inc. won the right to explorethe possibility of reopening the abandoned Chevron Main Field.Independent experts have now comprehensively studied the Whittier Main Field Oil P roject.

They have made their recommendations and provided their conclusions in an 800 pageEnvironmental Impact Report [EIR].

We take this process and their advice seriously.

We have listened to the experts and are working with the City to incorporate their

recommendations into the project now before the City.

The Whittier Main Field Oil Project is about nding the balance between available resources,

community needs, public benet and quality of life.

As a community and company, we share mutual goals:

To work safely and quietly in the best interest of all stakeholders To maximize the potential of the oil reserves to support Whittier city services and to

minimize any effects on the small, 0.5% of the Preserve that we work in


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The EIR studied the originally submitted project and ve alternatives. Based on safety andthe ability to eliminate environmental impacts with strict mitigation measures, the reportrecommended the best version of the project: the Preferred Alternative.

The Preferred Alternative referred to in the report, which includes the Consolidated Central

Site, keeps the footprint of the project at a minimal 0.5% of the 1290-acre Preserve and

successfully minimizes impacts.

The project would be consolidated on one site in Canada Canyon, an area already closed to

the public. The total pad area required for the oil and gas production and processing at the

site is approximately 7.0 acres, 0.5% of the total land area of the Preserve. There will be no oil

rening. The entire project will:

Be four football elds from the nearest residence and behind a hill

Be secured within concrete walls

Be insulated for sound control

Be screened from view by native plants, trees and natural hills

Be shielded to minimize light impact on the surrounding areas

Have all wellheads secured in underground, soundproof concrete cellars

Have well shafts in steel casings all the way to total depth of wells Have impermeable [waterproof] lining to prevent seepage into groundwater

The Consolidated Central Site will:

. . . reduce several of these impacts

primarily due to the location of facilities

farther from sensitive receptors (e.g.,

residences, schools, and public areas).1

What the Environmental Impact Report Recommends

The Consolidated Central Site was found tobe the environmentally superior alternative.

1 Whittier Project EIR ES-19 October 2010

Oil has played a signicant part in thehistory and economy of Whittier.There have been active wells here for

over 100 years. Chevron abandonedhundreds of operating wells in the early

1990s because oil was only at about $17

a barrel and it was not cost-effective.

Today, oil trades at $80 dollars a barrel and higher. Estimates of oil remaining in the Puente

Hills Habitat Preserve alone are hundreds of millions of barrels.

MATRIXS CURRENT OPERATIONS IN WHITTIER

Matrix has been a successful Whittier business and community partner since 2001:

25 existing wells, producing annual revenue for 700 royalty owners, the City and

the County

$1.1 million paid annually in royalties, taxes and fees

Matrix specializes in working with small communities to maximize available resources.

We are proud to be in Whittier and look forward to aproductive and safe future.

Oil, the City of Whittier & Matrix

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ConsolidatedCentral Site

Habitat PreserveBoundary

Landfll RoadAlternative

Consolidated Central Site in relationship to key locations

Central Rig

Colima RoadCentral

Processing

ResidentsView

City AccessRoad Option

Catali

na andMar Vista

IntersectionFriendly HillsCountry Club

WesternPreserveBoundary


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. . . utilizing the Landll Road Alternative, which moves vehicle trafc away fromrecreational areas and from residences. It also eliminates the trafc impacts on Mar VistaStreet, which currently operates at an unacceptable level of service.2

This alternative will also manage trafc on Hadley Street by limiting the work hours.3

This alternative reduces disruption and protects neighbors,

while maximizing the potential benets to the entire City.

We agree that the Consolidated Central Site is the best

choice for the City. We appreciate the benets it providesand the minimal effect it has on the environment. The

Consolidated Central Site maintains the build-out timeline

of ve years and keeps the project footprint at 0.5% of the

1290 acres, reducing signicant impacts.

LAMBERT RIGHT OF WAY ALIGNMENT

The EIR preferred the Lambert Railroad Right-of-

Way Alignment for the pipelines. However, the

Lambert Railroad right-of-way is owned by the

Union Pacic Railroad. Matrix will investigate

the possibility of obtaining an easement. We do

not know at this time whether the railroad will

grant an easement for such usage.

Landll Road Alternative Less than Signicant

Other Recommendations

The Consolidated Central Site was found to bethe environmentally superior alternative.

5

The Integrated Truck Loading Facility Alternative would incorporate a single

loading area within the processing area . . . would reduce visual and

recreational impacts as a result of a reduced footprint. There would also be

fewer construction impacts since less area would be constructed..4

We look forward to working with the City and community to continue to make the right

choices for the Whittier Main Field Oil Project. The EIR has made constructive

recommendations and drawn very important conclusions:

The Whittier Main Field Oil Project will generate signicant new revenue for the

City to use to protect and enhance vital City services.

Under the Consolidated Central Site Alternative, the project can be built and

operated safely, cleanly and quietly.

Integrated Truck Loading Facility Alternative Less than Signicant

COLIMA ROAD ALIGNMENT

The project would use underground pipelines (an 8-inch crude oil pipeline and a 6-inch natural gas

pipeline) installed from the site and secured beneath Colima Road (City and County land) to

transport crude oil and gas to markets. This enhances safety and signicantly minimizes truck trafc

to and from the site.

2 Whittier Project EIR ES-18 October 20103 Whittier Project EIR ES-19 October 20104 Whittier Project EIR ES-18 October 2010

Central Rig





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What is the Preferred Alternative?

An achievable goal ofthe project is therestoration of the

Preserve. New revenue

will allow the City to

begin a comprehensive

study and implement

a long-range plan to

return the Preserve

to its sustainable,

native state.

According to an analysis done by nationally recognized environmental experts, LSA Associates,

the Preserve is a degraded habitat dominated by non-native species. The Whittier Main Field

Oil Project can accelerate and enhance the process of returning this community resource to its

natural state.

Matrix will operate within the Preserve at the highest standard of safety. We are proud that our

record of working with local and State agencies has brought us recognition and positive

relationships.

In 2009, Matrix received the State of California Division of Oil, Gas and Geothermal Resources

Clean Lease Award for Excellence in Site Compliance and Improvement in Operations for its

facility in Bakerseld. We plan to win more awards for our work in the Preserve. To do that, we

will implement new, modern technologies to make sure our presence in the Preserve is

minimal, clean, quiet and safe.6

Whittier Main Field Oil Project Benets

With the loss of several major cardealerships, and the slow economy,Whittier faces challenging economic

decisions. The City now has the

opportunity to create new revenue from a

familiar and proven source.

The Environmental Impact Report [EIR]

concluded that, The recent decrease in sales

tax is potentially a signicant concern for

the City. The decline in sales tax between

2007 and 2008 came largely as a result of

the closure of ve of the Citys largest autodealers . . . The Project represents a

signicant revenue source that could

mitigate some of the long-term

uncertainty with relying on new retail

sales revenue.6

$10,000

$9,500

$9,000

$8,500

$8,000

$7,500

$7,000

2 00 0 2 00 1 2 00 2 2 00 3 2 00 4 2 00 5 2 00 6 2 00 7 2 00 8

W h it t ie r L os An ge le s C ou nt y

Source: State Board of Equalization andDepartment of Finance5

5 Whittier Project EIR H-54 October 20106 Whittier Project EIR H-9 October 2010

Historic Taxable Sales per Capita

Environmental Stewardship

Antique technology on old Signal Hill site


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Asignicantaspectof

theprojectwillbeourcommitmenttohelprestorethePreservetoitsnativestate.

The City of Whittier owns the mineral rights beneath the surface of the Preserve.Proposition A, a Los Angeles County ballot measure to increase open space, allowed theCity of Whittier to purchase the land for the Preserve. However, Proposition A only addresses

surface uses. Proposition A does not conict with California law, which allows a City to usethe subsurface of public property for other purposes, including revenue

generating uses.

As long as there is not a loss of public parkland, which is achieved by the equal replacement

of parkland elsewhere, the City can make use of its public parkland as it sees t. The City

owns the mineral rights for the Preserve. This new revenue will pay for all park-related

expenses in the City of Whittier, allowing the

current Parks budget to be used for other

City services, such as enhanced public safety

and economic development.

City of Whittier Mineral Rights andTheir Benets

Conservative estimates drawn by the independent EIR consultants, AECOM TechnicalServices, Inc, concluded that, a minimum of $7.5 million a year of new revenue at 1000barrels of oil per day [BOPD] could be generated for the City. 7 Over the life of the lease,

AECOM made further projections:Using the illustrative average royalties paid to the City until 2030, the new

revenue source in the high and low price scenarios [future price of oil]with

assumed high levels of production are estimated to average between

approximately $115.4 million and $7.5 million in new revenues per year.8

In addition:

The project is designed for a maximum rate of 10,000 barrels of oil a day [BOPD]

Each additional 1000 BOPD brought in by Matrix would generate a minimum of

$7.5 million a year

It is anticipated that the project would create a signicant number of jobs and

contracts in Whittier

Independent EIR Estimates of Financial Benetfor Whittier

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7 Whittier Project EIR H-9 October 20108 Whittier Project EIR H9 October 2010 All assumptions regarding

future royalty payments made to the City are based on the executedOil, Gas and Mineral Lease between the City and Matrix Oil.AECOM did not project additional revenues provided based on,lease payments, Habitat Authority payments, business license tax,property taxes or any other benet directly attributable to theProject. As such, the actual scal impacts less any costs to the Citymay be greater.

All wells will be secured in cementunderground soundproof well cellars

8


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These project impacts are less than signicant with the EIR modications and with

anticipated future project modications.

TRAFFIC LESS THAN SIGNIFICANT

The EIR concluded that, There are no signicant and unavoidable impacts to

transportation and circulation.10

NOISE LESS THAN SIGNIFICANT

Impacts to noise and vibration that are less than signicant with mitigation . . .Mitigation

measures for these impacts include limiting construction hours. . . developing and

implementing a Noise Reduction Plan, instituting a quiet-mode for operations, and

providing a comprehensive noise abatement study.11

The noise reduction methods in the mitigation measures are established practices in the

drilling industry that reduce noise levels in urban drilling situations12

AIR QUALITY LESS THAN SIGNIFICANTImpacts to air quality that are less than signicant with mitigation would occur during

operational activities...13

HYDROLOGY AND WATER RESOURCES LESS THAN SIGNIFICANT

In general, with the implementation of mitigation measures WR-1 through WR-4, the

impacts due to the project can be mitigated to less than signicant levels. . .14

What the Environmental Impact Report Says Aboutthe Consolidated Central Site Alternative

10 Whittier Project EIR ES-10 October 201011 Whittier Project EIR ES-9 October 201012 Whittier Project EIR 4.5-29 October 2010

13 Whittier Project EIR ES-8 October 201014Whittier Project EIR 4.8-12 October 2010

Whittierisanoiltownandfranklythepropertyclosesttotheoileldshaveeitherkeptupwiththepaceofrisinghomevaluesoract

uallyexceededthem,saidRonRidout,Owner,RealtyExecutivesCornerstoneWhittierDailyNews,11/29/2010

Property Values

With respect to property values, the EIR studied Matrixs operations at Honolulu Terraceand Sycamore Canyon and concluded:. . . we found no adverse effect on home values within the determined

inuence areas and there does not appear to be any notable negative impact tohome values in comparison to the larger City and County trends.9

Matrix has reviewed the possibility of prospects for oil occurrence past the Preserve border, as

there are historic wells throughout the Whittier area. Our lease with the City allows for

drilling only inside the border of City-owned property.

The EIR performed by MRS Consulting could not study

the possible oil reserves outside of the project area

and determine their economic benets to adjacent

homeowners.

9 Whittier Project EIR H-7 October 2010

10

Aerial view of Consolidated Central Sitein Habitat Preserve





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Conclusion

The EIR has thoroughly studied the proposed Whittier Main Field Oil Project andrecommends a strong, safe and environmentally superior alternative, the mostsignicant element of which is the Consolidated Central Site.

We look forward to working with the community and City Council to continue to rene the

project so that Whittier can begin to receive the enormous nancial benets it will generate.

The Whittier Main Field Oil Project can become the foundation upon which Whittier further

restores the Preserve, enhances City services as well as creates opportunities to support other

vital programs.

The Whittier Main Field Oil Project successfully balances Whittiers environmental and

economic future.

Our goal is to create a clean and safe plan that will set the standard for small oil reclamation

projects with large conservation objectives. To achieve our shared goals, Matrix will restore a

sizable area around the site to its native state and will work with State and local authorities toachieve the maximum results. We have been a partner with the people of Whittier since 2001.

We will continue to use the newest and most advanced technologies and programs to meet

residents high expectations.

Thank you.

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ODOR EMISSIONS LESS THAN SIGNIFICANT

Historically, the oil produced in Whittier is sweet crude, which does not contain noticeable

amounts of sulfur. Matrix will be required to use advanced, innovative technology that is

designed to suppress and eliminate any possible odor emissions.

Implementing these mitigation measures would eliminate odor events that have resulted in

odor complaints and NOVs at other oilelds in the past, as well as other suspected sources

of odors associated with the oil eld operations.15

RECREATION LESS THAN SIGNIFICANT

We are very happy the EIR found that the project would have a less than s ignicant impact on

the communitys use of the Preserve.

Mitigation measures for these impacts (to recreation that are less than signicant) include

constructing and maintaining a pedestrian trail along designated areas, developing an

alternative pedestrian trail, and implementing mitigation measures from other sections,

including noise and vibration and aesthetics and visual resources.16

The EIR is clear: by adhering to State mandated requirements and meeting the mitigation

demands of the EIR, the cumulative impacts of the project are less than signicant.

15 Whittier Project EIR 4.1-36 October 201016 Whittier Project EIR ES-11-12 October 201012

View down Catalina Street historic access road toformer Chevron Site and Current Ranger Station TruckAccess Gate after project is completed.


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We are committed to working quietly and safely to maximizeWhittiers natural resources for the benet of our entire community.

Whittier Main Field Oil Project6745 So. Washington Ave., #200

Whittier, CA 90601

www.whittieroil.com

Toll-Free: (877) 779-3847

Printed on recycled paper with soy based inks

Aerial View of Habitat Preserve with Consolidated Central Site




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