Well No. 4, California’s Birthplace of Oil Boom

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On the hill of Santa Susana Mountains sits Pico No. 4, the first production and commercially successful oil well in California, which is considered a birthplace of the state’s petroleum boom.

The well was considered the longest operating oil well in the world until it was conserved in 1990 after operating for more than 114 years, according to the Santa Monica Mountains Conservancy website.

It was drilled in 1876 near the city of Newhall by a French entrepreneur named Charles Alexander Mentry who explored the oilfield in Pico Canyon.

Within a year, Mentry drilled three wells that didn’t produce much oil, but it was the Well No. 4 that streamed a geyser to the top of a derrick.

Drilled 370 feet deep, the well producing 25 barrels per day, ultimately becoming a success that allowed Mentry to make a bigger investment  the oil production. 

The discovery of the Well No. 4 quickly led to the appearance of a new town called Mentryville, named after the well’s founder, which hosted more than 200 residents, majority of them arrived from Pensilvania’s oil fields to work for Metry, the L.A. Times reported.

But during Great Depression in 1930s when the oil production declined, residents started leaving the town.


In 1995, Chevron acquired Standard Oil of California and donated the Mentyville site to the Santa Monica Mountains Conservancy group.

Today the town is a one block village with only Mentry’s 13-rooms mansion survived. The site was turned into a National Historic Landmark in 1966.

While the California’s oil continue to gush in the Santa Susana Mountains and other fields across the state, the oil prices continue to change every day.

Almost 150 years after drilling the first Californian well, it’s still unclear where the oil prices are going.

On Dec. 3, crude oil costs $70.30 per barrel.



The High Desert Corridor Is Underway In The Mojave Desert


The California Department of Transportation is planning to build a 63-mile highway that will link the Antelope Valley and the Victor Valley.

The High Desert Corridor Project, a collective project of Los Angeles County Metropolitan and Caltrans, is designed to connect the fastest growing residential areas such as Lancaster, Adelanto and Victorville to serve passengers who travel across Mojave desert.

The project that will include solar installations, charging stations for electric cars and bike lane, is designed to connect two proposed high-speed rail system, the road and several cities across the Mohave Desert.

But with the cost of $8 billion, is the ambitious transportation project feasible?

Last months, county officials released a report about the project.

According to the plan, the highway will run through the City of Palmdale and will connect Fresno, Burbank and San Bernardino County.

Palmdale will play a role of a transportation hub, with a station that will link the Palmdale Transpiration Center and Metrolink trains, the report stated.

The High Desert Corridor will connect the highway with the terminal at the Palmdale Regional Airport, which Metro officials are planning to open again after it was closed for six years. 

On their website, Metro officials said highway will cost from $4 billion to $8 billion. The construction of the four-lane freeway will start in four years and will be completed by 2024. 

As the population of the Antelope Valley will grow 50 percent by 2020, the highway might be seen as a chance to push for the commercial and economic growth. Antelope Valley officials, a city known for its gravitation towards innovations, were pushing for the project.


The highway will stretch through 3,200 acres of land, an area that doesn’t include the railway that will occupy additional area.

The highway will run through 252 acres of farmland and 2,9000 acres of grazing land, that might become a disturbance with natural inhabitants such as Golden Eagle and desert tortoise.

But the major problem for the agency in charge is still ahead: Metro is the leading agency of the proposal are required to submit a route and get the funding.

By spring Metro will announce its decision on the route of the freeway.

The biggest concern is the financing, which is very unclear at this point.

The Metro High Desert Corridor posted on their website that the estimated cost will be included in the Environmental Impact report is which is currently underway.

Officials are planning to allocate $30 million from Measure R, a half-cent sales tax passed in 2009 that contributes to financing the county’s transportation projects.

But some critics say the project will more likely heavily depend on the private financing.


Environmental activists might also oppose the project.

Transportation official noted in the report that solar panels will be installed along the freeway, and creators hope they will produce energy for charging stations, according to the Metro’s website. 

With the solar panels producing energy for streetlights and  electric cars charging stations, Metro officials say they hope the highway will be self-sustaining and bring new economic opportunities to the region.

Oil Industry Rise Disrupts Plans For Renewable Energy

oil-derricksCalifornia is leading the rest of the nation in its push for using renewable energy, driving electric cars and installing solar panels.

But its next economic growth will most likely come from the industry known for its old-fashioned derricks sucking the crude oil out of the ground.

As Golden State is doing some soul-searching figuring out how to raise the budget and create news jobs, the oil industry is willing to fill the gap.

In recent years, new technologies developed a method called fracking, which involves blasting a mixture of water, sand and chemicals into the underground to reach previously unaccessible oil and gas shales.

The method revolutionized the way the oil is extracted allowing petroleum companies multiply their production and give a start to the unprecedented economic growth.

Since 2008, fracking boosted the oil production by 80 percent, increasing its daily amount to 11 million barrels, supplying more oil and gas than Iran, Nigeria and Kuwait combined.

Last year, for the first time in two decades, the U.S. oil export exceeded the import, challenging the world’s petroleum giants such as Saudi Arabia and Qatar.

In June, the prices on domestic oil declined to $82.60 a barrel from $115.71 marking the lowest benchmark over the last four years, according to AAA Automotive Research Center.

In the meantime, the production in California, the fourth biggest world’s consumer of oil and gas, has been on the rise.

Last year, the oil production increased by 7 percent to 199.6 million barrels a year, making it the highest hike in 25 years, according to the state Department of Conservation’s Division of Oil, Gas and Geothermal Resources.

There are several large oil deposits in California that, experts forecast, will fuel next shale boom.

The Kern River Oilfield stretches underneath the San Joaquin Valley near Bakersfield and, by some estimates, contains around 476 million barrels of oil in reserve.

Another oil deposit located near Kern River is called Monterey Shale that occupies an area of 1,752 square miles. Until this year, it was considered the largest Californian oilfield.

Monterey shaleBut recent reports filed by the federal officials revealed the shale contains only a tiny fraction of the expected amount.

Still, even by the least optimistic estimates, the deposit has 600  million of recoverable crude oil, a number large enough to keep derricks drilling within the Californian border. 

While the industry keeps pumping, it fuels the state and local economy in the form of taxes and jobs.

In 2012, the oil companies contributed $21.6 billion in state and local tax revenue and $15 billion in federal taxes, according to a report from the Los Angeles County Economic Development Corporation.

During the same year, the oil drillers added $18.7 billion in sales and excise taxes and contributed $113 billion in value added, which is 5.4 percent of the state GDP.

In the past seven years, the industry added 162,000 job openings to the market, which is 16,2 percent of all newly created jobs in California, according to the U.S. Bureau of Labor Statistics.

In 2012, The Kern County’s alone employed 47,706 people.

Monterey Shale -2

Just recently, IHS reported the petroleum industry plans to contribute five million new jobs nationwide over the next 10 years.

Meanwhile, the oil industry has been gaining new proponents among policy makers.

Gov. Jerry Brown, known for his support of the renewable energy, has recently cheered for the oil drilling.

“The fossil fuel deposits in California are incredible, the potential is extraordinary,” Gov. Brown said during a renewable energy conference in Goleta. “We want to get the greenhouse gas emissions down, but we also want to keep our economy going.”

Mark Nechodom, director of Department of Conservation’s Division of Oil, Gas and Geothermal Resources and the petroleum industry’s major regulator, echoed Brown’s words in his speech at the Modesto Area Partners in Science Conference.

“It’s hard to imagine how we would rapidly reduce our use of oil without a serious distraction of the economy, your well being and quality of life,” Nechodom said.

Colin Maynard, a spokesman for the Western States Petroleum Association, the organization that spent $20 million since 2009 lobbying state legislators, said the industry’s operations are the state economy’s integral part.

“[The oil industry] provides a product that really improves life of every citizen in the region,” Maynard said.


As the state submerges in the third year of the severe drought, many environmental groups raise concerns over oil operations that they say put under risk groundwater and other  aquifers.

Some believe if the oil drilling continues to operate at the current scale, there might be long-term consequences.

“Jobs are important and there are other ways to get jobs,” Kathryn Phillips, director of the Sierra Club in Sacramento, said. “And public health is important and sustainability of environment is important. We need a functioning plant and an eco system to be able to have a strong economy.”

Phillips says in order to address environmental issues, the state needs “to keep the oil in the ground.”

“If we don’t address the climate change we’re not going to be worrying whether we have energy for moving our vehicles,” Phillips said. “We’re going to be wondering if we’re going to be able to survive.”

Besides the lasting environmental damage the state will likely have to deal with, the fall of the oil price might discourage the businesses from investing in alternative energy. With the current price of $3.01 per gallon, it might simply be costly to install solar panels and purchase electric cars in the future than rely on the cheap energy coming from the same old oil derricks.

A Minimum Wage Increase Triggers Tough Decisions

Karim Kurdi, a 31-year-old Los Angeles native, says he supports a minimum wage increase, but as an owner of a small convenient store in West L.A., he realizes it might push him out of business.


“I would love to pay my employees more but it’s tough,” Kurdi said. “Right now, I’m breaking even. I’m not really making any money.”     

Some of Kurdi’s employees travel to work from the downtown area or East L.A. and earn $9 per hour. But starting Jan. 1, 2016, their wage will be increased to $10 per hour in accordance with the state law.

Despite of his support of the increase, Kurdi says even a small change in his workers’s salaries will have a significant effect on his already tiny budget.

“It’s going to be tough time,” he said. “If the minimum wage will rise again, it might affect my workers because they’ll have their hours cut.”

Kurdi, a son of a Mexican and Lebanese immigrants, opened his business, a Mar Vista Ranch Market in 2002 after hiring four workers and renting a one-story building on a busy corner of Centinela Avenue and Venice Boulevard. 

For the first six years, he enjoyed stable income from his small store. He also managed to keep his prices low while filling the aisles with Iranian dairy, Mexican-produced Coke and local poultry and meat, which attracted residents, most of them live within a walking distance from the store. 

But in 2008, things started to change. Although the number of customers who shopped at the Mar Vista Ranch Market remained stable, the average spending has declined.  

“People used to buy products for several days and now they only buy for today, just one onion and one cilantro,” Kurdi said. “Now they’re very careful with their money.”


On a recent Sunday afternoon, Kurdi stood behind a register with a sticker that read “Credit or debit cards for $10 charge .50c.” A woman stopped by a register to pay for a watermelon and two mangos. 

The shelves in the store were filled with tea, yogurts, tamales, and produce with oversized tags attached to them advertising discounts. Kurdi said he has not need to promote his business. Most people in the neighborhood know he has the best deals. 

But three years ago, national retailers like Target, CVS and Walgreen started offering fresh yogurt, strawberries and frozen lunches expanding their business from selling apparel to offering groceries and produce.

And owners like Kurdi have to keep their prices low to survive the competition. 

“We can’t raise prices too much because people will start complaining more, and we’re going to lose customers,” Kurdi said. 


The competition, severe drought and high prices on meat and produce began to drag the business down even further, Kurdi said.

“After everything is paid and after we threw a lot of fruit and vegetables away because of the weather,” Kurdi said. “I’m not really making any money.”

The minimum wage increase will add up to his already barely-surviving business.

Still, despite all the challenges, Kurdi remains optimistic. He says the increase of the minimum wage won’t happen overnight, and he still has some time to plan his budget. 

“I think the government needs to wait until the economy gets getter,” he said. “And then raise the minimum wage again.”

Clipping Coupons, Cutting Spending

When the economy sinks deeper, consumers tend to get creative about finding ways to cut on spending. 

Equipped with scissors, printers and shopping carts, in recent years many Americans have hunted for online coupons to save on products like canned soup, toothpaste and cookies.

While consumers print and clip their coupons, COUPONSeconomists closely watch their activity, trying to link it to economic growth or decline. 

Over the years, they have calculated that the more people print coupons, the worse the economic pressure they are feeling.

Originally intended as a form of advertising, coupons became a way for some customers to increase the value of their non-monetary exchange for groceries and goods. [Read more…]