The Cooper & Brain Oil Co. was founded 80 years ago in Wilmington and has ridden out the booms and busts since. Today, the grandchildren of the founders have dozens of wells in Los Angeles, which pump more than half of the company’s total production.
But they say their legacy could be threatened if L.A. voters in March approve a ballot measure to impose a $1.44 tax on each barrel of oil taken out of the ground in the city.
The city says the tax would raise as much as $4 million a year to help plug its massive budget hole. However, the tax would also make it more expensive to get oil out of the ground, and that could force some painful decisions for the eight-employee company that produces about 320 barrels a day.
Jeff Cooper, the company’s vice president and grandson of founder Joe Cooper, said the tax would cost his company nearly $100,000 a year.
“If oil prices went down, this tax would force us to close down wells in Los Angeles much sooner than would otherwise be necessary,” he said.
Cooper & Brain is one of dozens of mostly family-run small oil operations that dominate oil production in the city and stand to be hit the hardest by an extraction tax.
Most of the major oil companies such as Unocal or Chevron long ago sold their L.A. oil producing properties and moved on. Even Occidental Petroleum, the largest oil company headquartered in the city, has “negligible” production within city limits, according to a company spokesman. The major oil companies’ biggest presence within the city is in the form of refineries, which would not be subject to the tax.
As a result, the Western States Petroleum Association, which represents the major oil companies, is neutral on the L.A. extraction tax.
The only association member that has significant operations in the city, Houston-based Plains Exploration and Production Co., declined to comment for this story.
But some smaller independent producers are vigorously opposed to the proposed extraction tax, which at $1.44 per barrel is more than twice as high as any nearby city. Long Beach has a 40-cent-per-barrel tax, Signal Hill 60 cents and Seal Beach 58 cents.
The smaller companies say the tax could force them to cap low-margin wells in the city. That in turn, could take jobs and money away from dozens of oil field contractors, from drilling rig operators to maintenance crews.
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