LOS ANGELES (CNS) - The Los Angeles City Council today initiated the process of adding a measure to the November 2022 ballot to create a tax on companies that extract oil and gas within Los Angeles.
Councilman Paul Krekorian and Councilwoman Nithya Raman introduced the motion on Jan. 14 to begin the process by instructing the city administrative officer to report on potential amounts and structures for the tax.
“Although Los Angeles County represents the largest urban oil field in the United States, this council has taken aggressive steps forward in ensuring that within the city of Los Angeles, oil and gas production will become a nonconforming use and phased out over the coming years,'' Krekorian told council members ahead of Wednesday's vote.
“In the meantime, it's important that the council and the public consider whether or not there are ways in which those who are enriching themselves at the expense of the people of Los Angeles, and particularly our most disadvantaged communities in Los Angeles, should actually pay the price of that to the benefit of the people of Los Angeles.''
Los Angles charged an oil extraction tax for 60 years before it was repealed by voters in 1996, and neighboring jurisdictions also impose taxes on oil and gas extraction to pay for city services.
Krekorian said he wants the tax levied only while the city transitions out of the production of oil. The council's Energy Climate Change and Environmental Justice Committee has already declared all gas and oil production a “non-compliant use'' and called for all existing oil and gas wells to be shutdown over the next 20 years.
The 2021-22 fiscal year budget that the City Council is set to consider on Thursday includes $3.5 million to fund an amortization study in preparation of phasing out drilling in the city.
Los Angeles County has 5,100 oil wells that are either active or idle, making it the largest urban oil field in the country, Krekorian's office said.
The motion was one of the first introduced by then-newly elected councilwoman Raman, who made climate change a central part of her campaign last year.
“Our city's current fiscal crisis has made it all the more urgent that we seek out new, stable and progressive sources of revenue,'' Raman said in a January statement. “Even as we're working to phase out oil and gas extraction entirely, this tax has the potential to make it more expensive to extract oil from the ground in Los Angeles right now.''
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