Community Voices: Kern’s energy industry continues to fuel region’s economic growth | Voice of the community
Kern County is home to the largest economy in the San Joaquin Valley, according to just-released data from the Bureau of Economic Analysis. Indeed, the region’s gross metropolitan product of $48 billion is nearly 20% larger than Fresno County’s economy.
What sets Kern County apart is the fact that our region produces almost 20 times more oil than our northern neighbor. The oil and gas industry is the region’s largest sector in terms of GMP and tax contributions (local education and public safety departments) and provides approximately $10 billion in direct annual revenue to the region’s economy . O&G jobs pay significantly more ($80,800) than the county average salary ($53,300) and the sector is one of the most “impactful” industries in terms of job multipliers. (One O&G extraction job supports 5.3 other local suppliers and induced jobs.) Additionally, the industry is incredibly diverse with the majority of local employees representing people of color, according to the Bureau of Labor Statistics.
The perfect is the enemy of the good
Californians consume more than 20 trillion British thermal units of energy per day, 73% of which comes from fossil fuels. Coincidentally, this figure is close to the percentage of “demand” for state oil imported into California. The state now faces an extreme supply shortfall and must depend on countries on the other side of the world (e.g. Saudi Arabia and Iraq) for fuel.
Indeed, there are significant environmental consequences to favoring foreign sources over local ones. A 2016 Bureau of Ocean Management report found that hampering the production of energy leases in the United States actually increases global greenhouse gas emissions due to dependence on production. and foreign transport. (International tankers are responsible for more than 120 million tons of CO2 emissions per year.) This problem captured the world’s attention in the spring of 2020, when dozens of tankers, carrying 20 million barrels of oil, lay idle off the California coast for several weeks.
Despite Kern County having the strictest O&G permit regulations in the world, many state policymakers continue to pursue and champion energy policies that favor and (indirectly) encourage foreign production over local production. Since 2020, the time it takes to receive well stimulation approval has gone from an average of less than 200 days to now more than 600 days, according to the California Geologic Energy Management Division.
Kern County: The Benchmark for Energy Innovation and Deployment
Kern County has been declared the Energy Capital of California. The region is one of the top oil-producing counties in the United States and generates more than 50% of the state’s renewable energy. The largest wind and geothermal installations in the country, as well as the second largest solar field, call Kern County home.
At the November 2021 Kern County Energy Summit, which showcased our region’s incredibly diverse energy portfolio, Taft Mayor Dave Noerr aptly and succinctly stated that a just transformation is actually a integration and that the appropriate and responsible integration of emerging technology opportunities, as well as legacy opportunities, will propel us into the future.
Indeed, California oil and gas companies are taking the lead in funding innovation and energy integration efforts. Chevron has significant investments in green hydrogen and RNG technologies and California Resources Corporation has applied for permits for the first two permanent carbon capture and storage projects in Kern County. Erik Bartsch, President and CEO of Aera Energy and Energy Summit keynote speaker, recently proclaimed that “Creating legislative and regulatory pathways to encourage this industry to develop a CCS center in the Valley center is a win-win situation for the state and its people.” Bartsch added that the oil and gas industry has the “engineering and project management skills necessary to develop competitive CCS projects – assuming the state provides appropriate regulatory and legislative support.”
Kern County should sit at the “head of the table” as state and local officials deliberate and shape California’s energy future. It is of paramount importance that the tried and tested voices of our region be heard, as Kern County will undoubtedly remain the primary energy provider for California residents and businesses for decades to come.
Richard Chapman is President and CEO of the Kern Economic Development Corporation.