A US$300m (£183.3m, €231.7m) museum for the Oscars has come up against problems, with Los Angeles City Planning department expressing concern over potentially explosive gas pockets under the proposed site.

The department has released a draft environmental impact report on the project, which highlights deposits of methane and hydrogen sulphide gas that could potentially harm construction workers and ultimately visitors.

The planned Academy Museum of Motion Pictures – which will be dedicated to exploring and curating the history and future of the moving image – is scheduled to open in 2017 and will contain more than 290,000sq ft (26,941sq m) of galleries, exhibition spaces, movie theatres, educational areas and special event spaces.

To be located next to the Los Angeles County Museum of Art (LACMA), which is currently undergoing an expansion, the Academy museum has been designed by Pritzker Prize-winning architect and designer of London’s Shard, Renzo Piano, working with contemporary architect Zoltan Pali.

Geo-engineering firm Geosyntec Consultants discovered on assessment that underground gases and groundwater will both affect the museum’s build-out and operation, with the danger of hydrogen sulphide – a toxic, flammable and colourless gas that’s immediately combustible when mixed with air at certain concentrations – accumulating in low-lying trenches.

Because of the nearby active La Brea Tar Pits, accumulated gas has been an ongoing concern for developments in the area for the past half-century since the development of LACMA. The deposits in the area have caused problems in the past, the most prevalent coming in 1985 when accumulated gas caused an explosion in a shop, blowing out the windows and collapsing the roof, hospitalising 23.

While it’s not thought the gas problem will halt construction, it will make the site more expensive to build on. Bill Kramer, the Academy museum’s managing director, noted the problems but said to the Hollywood Reporter that “none of the existing conditions on this site were extreme enough to warrant not saying yes.”