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HomeMy WebLinkAbout04 - City Council Ad Hoc Committee on Oil & Gas Field OperationsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 4 April 25, 2006 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Utilities Department Pete Antista, Acting Utilities Director (949) 718 -3401 Pantista @city.newport- beach.ca.us SUBJECT: RESOLUTION EXTENDING THE CITY COUNCIL'S AD HOC COMMITTEE ON OIL AND GAS FIELD OPERATIONS ISSUE: Should the City Council's Ad Hoc Committee on Oil and Gas Field Operations be extended? RECOMMENDATION: Adopt Resolution 2006 -_ extending indefinitely the life of the City Council's Ad Hoc Committee on Oil and Gas Field Operations. DISCUSSION: Background: In November 1998, the City council established the Ad Hoc Committee on Oil and Gas Field Operations in part to review a rehabilitation program and financial funding alternatives for the operation of the City's oil and gas field. The term of the committee was extended by the City Council in November 2000 and again in January 2003. The term has expired and it is recommended that the term be extended indefinitely. During the past years, several wells have undergone a cleaning and rehabilitation process. In addition, water flooding has been underway in the first zone. Staff has seen some increased production from the wells and dramatic fluctuations in the price of oil, which has provided annual revenue to the Tidelands Fund (FY 98/99 - $424,600, FY 99/00 - $900,200, FY 00/01 - $1,024,600, FY 01/02 $794,200, FY 02/03 $860,914,04/05- 1,248,264, 05/06 estimated $1,3000,000). During the upcoming year, the Committee will be reviewing the pursuit of additional water sources that may include the drilling of a Resolution Extending the Ad Hoc Oil and Gas Field Operations Committee April 25, 2006 Page 2 salt water production well to enhance the water flooding in the first zone and move to water flooding the next zone, pending results from the enhanced water flooding of the first zone . Committee members now include: • Mayor pro Tern Steve Rosansky • Council Member Richard Nichols • Utilities Director Pete Antista The Committee will review future results, establishing priorities and make recommendations to the Council on future improvements that may future increase production and revenue. Attached is the committee description approved by the City Council in November 1998. Prepared by: Ed Burt Utilities Operations Manager Attachments: Resolution 2006_ Committee Description Submitted by: Pete Antista Acting Utilities Director Resolution Extending the Ad Hoc Oil and Gas Field Operations Committee April 25, 2006 Page 3 RESOLUTION NO. 2006 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH EXTENDING THE TENURE OF THE AD HOC COMMITTEE ON OIL AND GAS FIELD OPERATIONS WHEREAS, the City's oil and gas operation is a major revenue for the Tidelands Fund: and WHEREAS, the City Council wishes to increase City revenue and maintain the operation of the oil and gas field; and WHEREAS, the City Council appointed an Ad Hoc Committee to advise the City Council as to matters pertaining to the operations of the oil and gas field; and WHEREAS, the City Council Ad Hoc Committee on Oil and Gas Field Operations ( "Committee ") expired on December 31, 2005; WHEREAS, the City Council deems it desirable to extend the tenure of the Committee in order to complete their deliberations and recommendations; now, therefore be it RESOLVED by the City Council of the City of Newport Beach that it hereby extends the term of the City Council Ad Hoc Committee on Oil and Gas Field Operations indefinitely until formally sunsetted by the City Council. ADOPTED this 25th day of April, 2006 Don Webb Mayor ATTEST: LaVonne Harkless City Clerk Resolution Extending the Ad Hoc Oil and Gas Field Operations Committee April 25, 2006 Page 4 OIL AND GAS FIELD OPERATIONS COMMITTEE AUTHORIZATION: The Council, by minute action of November 9, 1998, approved the establishment of an ad hoc committee to review the rehabilitation program and financial funding alternatives for the operation of the City's oil and gas field. Term extended by adoption of Resolution No. 2003- _ on January 14, 2003. MEMBERSHIP: Two City Council Members appointed by the Mayor and the Utilities Department Director. TERM: Indefinite. PURPOSE & RESPONSIBILITIES: The revenue generated from the City's oil and gas field operation is declining and the City needs to determine the direction they wish to take in the future. The committee is to investigate rehabilitation options and provide alternatives to increase the revenue stream to the City.