COUNCIL SETTLES PORT FUELS DISPUTE.

Byline: RICK ORLOV Staff Writer

After a more than 10-year dispute over a controversial operation at the Port of Los Angeles, the City Council agreed Wednesday to a $27.7 million settlement that ends an experiment to tap into the alternative-fuel market.

After a lengthy closed-door session, the council agreed to have the port make the payments to Oxbow Carbon and Minerals Inc. and its partners to end plans to try to convert coke residue into petroleum for sale to other countries at the Los Angeles Export Terminal.

Councilwoman Janice Hahn, who represents the area and has been fighting the operation since her election, praised the settlement as a victory for residents.

``What this means is that in 90 days, we will be rid of a dirty, polluting business,'' Hahn said. ``It was an eyesore, and the community has wanted to be rid of this for years.''

Hahn said the deal will allow the city to proceed with plans to generate up to $20 million a year by using the land as a container facility.

Under terms of the settlement, Oxbow will drop a $400 million action against the city in return for the payment and the company will turn over the 117-acre site to the Port of Los Angeles within 90 days.

All of the money for the settlement will come from port revenue.

The settlement ends years of controversy in the San Pedro community over piles of coal and coke residue and pollution on the site. Port officials said plans are being developed to review the entire Terminal Island complex.

``As for what we want to do with the land, the immediate purposes will be to utilize the rail that exists on the site,'' spokeswoman Theresa Adams Lopez said.

The original alternative-fuels program -- developed first under former Mayors Tom Bradley and Richard Riordan -- was designed to find a use for manufacturing byproducts in the region. But that market collapsed, and the city has since been left with piles of debris in the harbor.

rick.orlov(at)dailynews.com

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