Drilling for Oil in Downtown L.A.

That difficulty, he says, means California hasn't seen the major oil boom that Texas and Rocky Mountain states are seeing as world oil prices top $120 a barrel. Other factors limiting California production, he said, are the lower-grade nature of the crude found here, and the fact the oil operations here are mature and, frequently, under concrete. After decades of producing the easy-to-obtain oil, Bopp said, drillers now must inject water or steam into the wells to bring up remaining oil.

Still, he says, "There's still a lot of oil in the L.A. Basin — there's a lot of oil."

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Where Does That Oil Go?

There are 3,164 wells in production in Los Angeles County, according to the state. Annual production has been around 27 million barrels for several years, down from the peak in 1969 of more than 133 million barrels.

Production showed a slight increase in 2007, Bopp said. And in the first four months of 2008, state applications to renew work on existing wells in the Los Angeles area total 129, compared with 50 at the same point in 2007, according to documents published by the state oil office.

High prices make drilling economical where it wasn't before, and that is attracting new players. In the L.A. area, Bopp says, there are at least a couple thousand wells still plugged with cement that have the potential to be reopened without much difficulty.

Rusch's company, Plains Exploration & Production, known as PXP, hopes to tap a new oil field under Culver City, which is surrounded by Los Angeles, with slant drilling from nearby Baldwin Hills. It is seeking government approval.

PXP agreed last month to set a date to prematurely end drilling off the coast at Santa Barbara in exchange for approval to drill new undersea reserves with sophisticated slanted drilling operations farther offshore. The company is donating nearly 4,000 acres of coastal property for public parkland in a deal with environmentalists who agreed to drop opposition to the company's exploration.

"We've been able to double our production in the last 15 years," Rusch says. "As prices go higher, we drill deeper. The play over Culver City becomes accessible. I think we're all hopeful there's potential. And there's more out there we don't know about today."