Today oil derricks stand like trees in a forest… . Steam pile drivers roar on many a vacant lot… . One hundred and eighty permits to drill for oil have been given and twenty-five more are in procedure… . If this fever continues, as it gives every indication of doing, one reasonably may expect to see virtually the entire water-front line of private properties from Washington street to Sixty-sixth avenue or Playa del Rey dotted with a line of oil derricks.
—“Venice Battle Attests Oil and Water Do Mix,” Los Angeles Times, June 29, 1930
Thus did the Los Angeles Times describe the Venice Beach–Del Rey oil field in 1930, six months into an oil boom that displaced homes, polluted beaches, and transformed residential Venice into a petroleum production zone. This drilling frenzy, soon labeled the “destruction of Venice,” precipitated a vigorous debate over oil drilling and zoning in Venice, and was invoked by opponents of oil exploitation in Los Angeles for the next two decades. Debates over oil production in Venice and other Los Angeles neighborhoods reflect the long struggle of American cities to regulate polluting industries, but with a difference. While slaughtering houses, tanneries, and other nuisance industries could be relocated away from valuable property and concentrated populations, oil deposits could not. Additionally, the laws governing the ownership of both land and oil in early twentieth-century California encouraged dense, rushed drilling, especially in urban areas. This situation handicapped government and industry efforts to mitigate oil-related damage and highlights the centrality of property rights to industrial regulation.
Los Angeles began its long struggle over oil with the city’s very first well. Edward Doheny drilled this well amid house lots about a mile west of downtown. Doheny later gained infamy in the Teapot Dome scandal in the 1920s but was eventually acquitted of charges that he bribed Secretary of the Interior Albert Fall in exchange for oil leases in the Elk Hills and Teapot Dome naval petroleum reserves. Elected officials soon enacted rules to keep oil wells from encroaching on public parks. This did little to quell oil prospecting either downtown or, later, in Venice, because land owners in California faced few limits on their rights to exploit mineral resources. Moreover, under the law of capture, oil belonged only to the person who “captured” or extracted it, even when an oil deposit extended beyond property boundaries. In an oil field subdivided into hundreds of separate properties, as Venice was, these laws practically forced oil companies to lease as much land, raise as many derricks, and quickly produce as much oil as they could. Public opinion eventually mobilized against drilling in the aftermath of the destruction of Venice, but this backlash was cut short by World War II. Oil companies, supported by federal officials, increased production during the war. They responded to public opposition by introducing new technologies to mitigate the worst hazards of oil drilling. The larger significance of this story, however, lies in the way the oil industry deflected regulatory impulses and, in the process, asserted industry prerogatives in solving urban environmental problems.
The Venice–Del Rey Field
Venice is located on Santa Monica Bay, fifteen miles west of downtown Los Angeles. It began in 1905 as a speculative—and largely unsuccessful—real estate fantasy, complete with canals and gondolas. In 1926 Los Angeles annexed Venice. When the Ohio Oil Company struck oil southeast of Venice in December 1929, Los Angeles zoning regulations prohibited oil drilling in residential and commercial sections of the community. In practice, drilling in these areas could not proceed without a special permit from the city council. This requirement did not stop oil company agents from immediately fanning out to negotiate drilling leases in residential Venice. The city council found it nearly impossible “to forbid a property owner … from going after a fortune beneath his lot,” and by March 1930 it had granted scores of special permits. Zoning restrictions fell before the tide of public opinion; for the next year, oil development proceeded “somewhat indiscriminately” because of the law of capture: property owners and oil prospectors alike viewed any delay as likely to reduce their oil production and thus their profits.
The Venice oil boom precipitated a “great conflict of interests” over drilling and property rights in Venice. In the first months of the oil boom, Venice City Council member J. C. Barthel declared oil drilling “one of the most popular issues with the greatest unanimity of opinion” he had ever seen. The Del Rey Beach Improvement Association and five thousand Playa Del Rey and Venice residents demanded an end to drilling restrictions in Venice. In June some three thousand Venice residents went even further, petitioning to eliminate restrictions on oil drilling everywhere in the city of Los Angeles. Drilling advocates argued that land owners had specific rights to exploit their mineral rights and to lease their property to whomever they wished. But opponents considered oil wells public nuisances that infringed on the property rights of others. Drilling opponents sought full enforcement of zoning to protect the “public weal—ignoring individual loss.” They also claimed that Venice voters approved annexation to Los Angeles in 1926 to gain the benefits of Los Angeles’s zoning ordinances.
Those who applied for special drilling permits in 1930 saw zoning and regulations through an economic lens. They opposed rules that limited their ability to exploit the oil under their land or to take advantage of oil-driven real estate booms. Council member Barthel was no exception: his wife filed for a drilling permit under her maiden name even as he called on the city of Los Angeles to lift zoning restrictions in Venice. Drilling opponents comprised a more varied lot. Venice property owners who feared the negative impact of oil on the value of their property and on economic growth from tourism, or who had tried and failed to secure an oil lease, joined the coalition to protect their real estate investments from drilling on abutting lots. City council member Charles H. Randall, representing a district near downtown, advocated a statutory ban on all wells in residential Los Angeles because zoning was too easily overturned. Finally, the Los Angeles Board of Playground and Recreation Commissioners worried that oil would contaminate recreational beaches.
Most of the opponents’ complaints about drilling in Venice reflected the problems common with “town lot fields,” as oil fields with derricks erected on small house lots were known. All early twentieth-century oil fields featured frequent oil spills, fires, gushers, explosions, and blowouts. The high gas pressures in Los Angeles oil deposits exacerbated these risks, as did business practices such as delaying tank and pipeline construction until wells began to produce, or letting gushers spew wildly, as one Venice firm did, “for advertising purposes.” In crowded town lot fields, the proximity of housing to derricks magnified these dangers, even as the law of capture encouraged drilling practices that ultimately reduced the yield from these oil deposits. At the time drilling began in Venice Beach, several decades of unrestrained oil development in the United States had impelled many oil companies to propose new drilling practices that they labeled oil conservation measures. These methods were intended to reduce the dangers associated with dense oil fields, to stabilize oil prices, and to conserve the natural gas pressure that made it possible to extract oil from underground deposits. Specifically, conservation proponents advocated establishing minimum distances between wells, setting production limits, and apportioning oil among leaseholders before drilling began. Some of these measures would have reduced the impacts of the Venice oil field, but the push for oil conservation ran afoul of the deep divisions within the oil industry in California. Major companies such as Standard Oil supported oil conservation, but smaller independent firms opposed rules that slowed or apportioned production and thus threatened their profits. These smaller firms also suspected the major companies of using conservation to monopolize oil resources and markets.
In the absence of new drilling rules, community leases offered some hope for rational development and oil conservation in Venice and other town lot fields. In a community lease, private land owners let their land as a block to a single company and then shared the proceeds. Larger leases meant fewer wells spaced farther apart, lower drilling costs, and greater overall oil production. Community leases also had the potential to distribute revenues more evenly among land owners by including those who would not otherwise have profited at all from the oil under their land. Community leases, however, required land owners to agree on the details of the lease, to share the resulting wealth, to cede a measure of control over their land to their neighbors, and to accept slower returns from oil production. These requirements made these leases extremely difficult to arrange, particularly in the middle of an oil frenzy.
Just two months after Ohio Oil Company discovered oil, the Los Angeles City Council briefly entertained a variant of the community lease for Venice. The proposed ordinance would have permitted oil companies to lease entire city blocks, provided a majority of the residents on that block approved. By reducing the density of derricks in the field, this block-leasing plan would have achieved many of the goals of oil conservation and might have preserved more of Venice’s residential character. Block-based development would also have changed drilling from a private economic calculation into a communal democratic decision. But the proposal received little public or city council support precisely because it threatened property owners’ immediate profits and departed radically from the property-rights regime that governed both oil and leases at the time. The failure of the block-leasing ordinance and absence of community leases or other oil conservation measures left Venice unprotected when land owners demanded that the city council waive zoning regulations and issue special drilling permits.
By June 1930, because of what the Los Angeles Times derided as “indiscriminate” drilling, the oil boom had encroached on the public beach in Venice. The Los Angeles City Council and the Playground and Recreation Commission, horrified at the oil pollution and the derricks looming over one of the few public strands in Los Angeles County, proposed that the city lease the beach for drilling and use the revenue to buy more pristine shoreline elsewhere. According to California property laws, the city owned the oil under the beach; it irked the commission that not only were private oil companies destroying the beach but they were also taking oil that rightly belonged to the public. Leasing the beach, commissioners hoped, would glean some public benefit from the destruction of Venice. The proposal raised a furious defense of public rights that largely ignored the realities of the Venice field even as it signaled an important shift away from private profit and drilling at all costs. Real estate groups such as the Del Rey Beach Improvement Association joined with the local chapter of the Izaak Walton League, a conservation organization, to protest the leasing plan. Lewis Stone, an actor who owned a house near the beach, brought suit to stop the beach lease on the grounds that oil wells on the beach would damage his property and “constitute a public nuisance.” The court ruled for Stone even though derricks ringed the beach; this foreshadowed a major—if brief—shift toward regulation.
By 1932 vast sections of Venice Beach, a town founded as a tourist resort, had been transformed into the most industrial of places. Real estate that was once valuable because of its isolation from the nuisances of industrial production and because of its proximity to the ocean was now surrounded by clattering drills, spilled oil, and the incessant roar of diesel pumps. As oil transformed Venice Beach, it also forced land owners to reassess their property. They could no longer derive value from residential and vacation real estate investments. They speculated in oil if they could, or, if they could not lease their land, they lost their investments. Los Angeles officials initially recognized mineral exploitation over other property rights, but as the beach-leasing episode suggested, the destruction of Venice shifted public opinion.
Los Angeles against Town Lot Drilling
Venice was the last oil field of its kind in southern California. During the 1930s, conflicts continued between those who asserted their property rights to drill and those who demanded protection from drilling, but the balance of power between these groups shifted. Private gain started to pale in comparison to the falling property values and the rising cost of policing, fire fighting, and infrastructure repairs required in the town lot fields. Oil production all but ended in Venice by 1932 because the proliferation of oil wells depleted the underground gas pressure necessary to extract the oil. The rapid collapse of the field caused still more Angelenos to question the wisdom of favoring the right to drill over all other priorities; doing so seemed to cause widespread damage for very short-lived, unevenly distributed profits. Residential property values and community interests trumped the private exploitation of mineral rights for the rest of the 1930s.
The first sign of the new oil politics appeared in Santa Monica. At the height of the Venice–Del Rey frenzy, Santa Monica legalized oil exploration in industrial areas. No oil was found there, but in July 1931 the Santa Monica planning commission outlawed oil exploration once again because it believed that the possibility of oil exploration was depressing property values and slowing new home construction throughout the city. Soon afterward, a proposal by Ramsey Petroleum to drill an exploratory well near Elysian Park and downtown Los Angeles foundered when the Vermont-Shire Development Association argued that drilling in residential neighborhoods violated owners’ rights to enjoy their property. The Wilshire Community Council chimed in, calling urban oil fields “inimical to the esthetic development of the city as a home-owners’ haven.” The discovery of new oil deposits in the Del Rey Hills in 1932 and in Redondo Beach in 1936 prompted similar vociferous demands for protection for residential property. Perhaps the clearest sign that Angelenos had reassessed oil drilling and property rights came in 1938, when the Los Angeles City Council approved an exploratory well in an undeveloped section of Venice. In place of the clamor for unrestrained drilling eight years earlier, the local American Legion, Women’s City Club, and 830 Venice residents petitioned against the new well.
In downtown Los Angeles, Del Rey Hills, Redondo Beach, and in Venice itself, those who opposed drilling cited the destruction of Venice in 1930 and 1931. The new campaigns to exclude oil wells from residential areas succeeded in part because business groups now also supported limits on where and how oil companies could drill. The business community concentrated on protecting property values in coastal areas and other places where oil development threatened both real estate speculation and tourism-related economic growth. For example, in 1927 the business community helped ban drilling from piers that stretched across beaches. Such drilling blocked public access and increased erosion along sections of the Los Angeles coast. In the aftermath of the Venice debacle, communities from Malibu to Palos Verdes repeatedly tried to ban drilling within 2,500 feet of the water’s edge; business groups enthusiastically joined these campaigns.
Efforts to protect coastal property values faced a major setback in 1936, when Standard Oil sponsored a ballot proposition to legalize slant drilling into underwater oil pools from dry land. Standard Oil hoped this measure, called Proposition 4, would allow them to regain access to oil out of reach since the 1927 pier ban. To help overcome opposition to new coastal oil wells, the oil giant included language in Proposition 4 earmarking a portion of royalties from new coastal wells for state park development. This canny provision earned Proposition 4 an endorsement from the state park department and support from a majority of Californians. Over the objections of voters in Los Angeles County, Proposition 4 passed. Newspapers in Venice and Playa Del Rey warned that legalizing slant drilling would open beaches and neighborhoods to unrestrained drilling. The Hermosa Beach Chamber of Commerce called Proposition 4 “a medium for satisfying the private greed of certain large oil interests … [and] a vehicle through which ruin and destruction will be carried to our beaches.” Reactions to Proposition 4 in Los Angeles reflected the wholesale reassessment of oil drilling by business groups and boosters.
Although Proposition 4 permitted slant drilling only along beaches, it raised the specter of a new oil rush in Los Angeles, which is why so many Angelenos voted against the measure. The boom did not immediately materialize, however. In 1937, North Dakota senator Gerald P. Nye proposed that Congress declare underwater oil deposits in California, Louisiana, and Texas part of the public domain. Later that year, Secretary of the Interior Harold Ickes proposed making all oil under American territorial waters a naval petroleum reserve. He eventually forced a lawsuit to determine whether the federal government or the states had jurisdiction over this oil. Federal claims stranded near-shore oil deposits, including those covered by Proposition 4, in a legal limbo until 1953.
Town Lot Drilling Returns
World War II forced Los Angeles residents to reassess again the balance between residential property and urban oil development. War in Europe and the Pacific increased demand and prices for oil. These higher prices alone might not have changed local oil politics, given the business community’s position on urban drilling in the 1930s. After the attack on Pearl Harbor, however, oil was linked intimately with national war goals and patriotism. In addition, federal officials pressured local governments to permit drilling throughout Los Angeles and thus challenged local regulations. This sort of wartime reassessment of environmental regulation was not unique to either petroleum policies or Los Angeles. To meet military needs, the War Productions Board and Department of the Interior also permitted salt mining in Death Valley National Monument and tungsten mining in Yosemite National Park. Unlike mining in national parks, however, oil exploration in residential Los Angeles continued after hostilities ended. World War II erased the political impact of Venice Beach.
Oil companies recognized wartime opportunities immediately after the bombing of Pearl Harbor. Shell Oil was the first to seek permission to drill a new well in an area hitherto closed to petroleum extraction. In January 1942 Shell asked the Los Angeles City Council for permission to drill on a sliver of unincorporated land abutting residential areas inside city limits. When residents of those neighborhoods protested what they saw as a scheme motivated by profit rather than patriotism, Los Angeles mayor Fletcher Bowron vetoed Shell’s permit. Shell responded that the well was necessary for the war effort. Secretary of the Navy Frank Knox and the Federal Office of Production Management not only urged Los Angeles city officials to approve Shell’s well but also called on them to permit oil exploration everywhere in the city. In late 1942 the Los Angeles City Council, convinced that the war emergency justified new drilling in residential areas, narrowly overrode Bowron’s veto.
In the following twelve months, the Los Angeles City Council received nine more applications for exploratory wells in residential areas. Seaboard Oil, for example, requested and eventually received permission to drill in the neighborhood near Elysian Park where Ramsey Oil had been denied a permit in 1932. In oil-producing Wilmington and Venice, wartime wells became a major issue in the 1943 city elections and contributed to the reelection of antidrilling incumbents from those districts. Two city council members in particular, Wilder W. Hartley and David Stannard, reported that their constituents held protest meetings whenever the city council seemed poised to allow more wells in their districts. Meanwhile, Shell, Seaboard, and the other companies that took advantage of wartime oil politics tried to deflect public fear of another Venice–Del Rey field by arranging community leases and covering their derricks to reduce noise and spraying oil. These strategies, they insisted, would permit them to meet wartime needs without “detract[ing] from the value of residents’ property.”
Yielding to pressure from oil companies, the Petroleum Administration for the War, the War Productions Board, and the navy, the Los Angeles City Council approved scores of new oil wells. Councilmembers insisted that they would not allow drilling to affect residential property, but they refused to restrict drilling during the war. Mayor Bowron, in contrast, felt strongly that national war aims should not trump local regulations, property values, or community needs. In addition to vetoing special drilling permits, Bowron proposed legislation to strengthen drilling safety requirements and to exclude oil wells from residential areas for the duration of the war. When the city council rejected those measures, he accused oil companies of unpatriotic profiteering and alternately demanded and pleaded with them to close their wartime wells when peace returned. He did not succeed in any of these efforts to keep oil from invading residential neighborhoods, in part because of the persuasive force of military necessity and in part because many Angelenos saw oil fields, derricks, and drilling as minor inconveniences compared the other sacrifices necessary to win the war.
Conclusion
The dearth of drilling regulations in Los Angeles was not simply a by-product of federal intervention. Like other twentieth-century industries, Los Angeles oil companies worked hard to control and deflect regulation. Sometimes those efforts took the form of preemptive self-regulation; the Los Angeles Chamber of Commerce, for example, undertook an aggressive smog-reduction campaign in 1944 and 1945, and funded research, drafted legislation, and offered political support to embattled officials in all manner of other policy debates. In Louisiana and Texas, oil companies wrote state oil conservation regulations to slow oil production and stabilize prices. Conflicts between large and small oil firms defeated similar conservation regulations in California, even though these rules could have prevented damage to and increased production in Venice and other urban oil fields simply by spreading derricks out and apportioning oil among leaseholders. When California oil companies finally changed their drilling practices in the 1940s, they did so primarily to preserve their access to Los Angeles’s urban oil fields. By publicly highlighting noise- or fire-reduction technology and oil companies’ voluntary adoption of oil-conservation practices, the industry decreased public demand for legislative action even as it touted nongovernmental solutions to industrial problems as superior to governmental regulation.
The presence of oil under Los Angeles and residents’ early adoption of the automobile made southern Californians more familiar than most Americans with the range of consequences of petroleum dependency, from runaway wells and refinery fires to gridlock and smog. These problems did not lead to a robust regulatory impulse—the Los Angeles City Council did not even require soundproof derricks until 1945—and this suggests much about twentieth-century American regulatory politics. Public reactions to urban oil development in the Los Angeles area did change dramatically after the ebullient chaos of Signal Hill, Venice Beach, and the other town lot fields of the 1920s. The Venice–Del Rey field was the last of the unrestrained town lot fields because property owners and business interests came to see other property rights and values as more important for Los Angeles’s long-term prosperity. However, the destruction of Venice and the danger, damage, and unsustainability of unregulated urban drilling lost their political impact in the face of federal invocations of patriotism during World War II. Bowron did not succeed in redefining the wartime oil debate by painting oil companies as opportunistic and unpatriotic profiteers. Instead, the navy and the War Production Board demanded that Los Angeles open the city to oil wells and ignored local residents’ concerns about property rights and the public good. This gap between local and federal priorities ultimately permitted further oil drilling in developed areas of Los Angeles, fueled resentment, and eroded Americans’ confidence in government solutions to public problems after World War II.
Michael Ruark 