Long Beach to study impact of weaning city off oil money – Press Telegram

An oil pump is visible beyond Municipal Cemetery in Long Beach in July 2020. (Photo by Howard Freshman, Contributing Photographer)

The Long Beach City Auditor’s office will conduct a comprehensive review of the city’s economic reliance on oil and natural gas production revenues to help the city better understand how much it will cost to transition away from reliance on revenues from those sources, the City Council decided on Tuesday, May 23.

“Oil is a part of Long Beach’s past,” Mayor Rex Richardson said Tuesday evening, “but it’s going to be this council that figures out what the next steps are (to chart) a healthy future.”

Long Beach is planning to phase out its reliance on oil revenue by 2035 — about 10 years of the state’s goal set by Gov. Gavin Newsom — a plan that’s been underway since 2021 and has been recently reaffirmed with the approval of Richardson’s Grow Long Beach initiative.

The initiative, which was unanimously OK’d by the council in March, asks city staff to develop a plan to propel the economic development of Long Beach’s main industries, such as aerospace and tourism — and to explore alternative revenue streams that could help wean the city away from its longstanding reliance on oil money.

The requested audit, meanwhile, is intended to help city officials get a better grasp on exactly how reliant Long Beach currently is on that oil money — and what kind of economic liability they’re going to face moving forward with their 2035 goal.

“It’s important for us to understand the fiscal liabilities, particularly in two ways:  What happens to the infrastructure in place when it’s no longer in use?,” Richardson said Tuesday. “We also need to also understand what the impact is to our structural revenue sources, that’s how we provide services in the city.”

The report, according to a Tuesday city memo, will likely include:

• An inventory of oil operators and oilfield service providers located in Long Beach
• City revenues from those oil operators and oilfield service providers
• An estimated cost associated with oil well abandonment and environmental cleanups
• Information about the costs associated with city operated oil assets after oil production ends
• An estimate of the impact of the loss of oil revenues on city program

“This audit will provide information and allow the city to set targets — I think that’s one of the most important things, to set targets,” Third District Representative Kristina Duggan said, “so we can look at our liabilities from oil and replace that revenue that we’re losing.”

The audit is expected to cost about $60,000, according to the city memo. That will be funding by existing General Fund allocations in the City Auditor’s department.

It’s unclear what the exact timeline is for the report. Once completed, the audit results will be presented to Long Beach’s Climate, Environment, and Coastal Protection Committee, Duggan said.