The good news is that six of Kern County's 10 largest property taxpayers are having a banner year. The bad news is, it's probably not going to last.

The fiscal year starting July 1 is shaping up to be the second-largest property tax assessment in county history, owing to relatively high oil prices on Jan. 1, which is the date Kern uses every year to help establish the value of petroleum property.

Unless something big changes soon, Kern's oil properties as a whole look to be more valuable in the upcoming fiscal year than in any year other than 2014, County Assessor-Recorder Jon Lifquist predicted Wednesday.

That's saying something. In the current fiscal year, six oil companies landed in the top 10 taxpayers by real estate value. Together they contributed 15 percent of the county's tax property revenues.

To be clear, revenue from that source of tax income funds law enforcement, fire protection, the criminal justice system and a variety of social services.

Oil production looks pretty good from that perspective.

"The locals definitely share the benefit of Kern County being so rich in energy resources,” said Rock Zierman, CEO of the trade group California Independent Petroleum Association.

Farming, for the record, hardly compares. There were two utilities in this year's top 10 property taxpayers, as well as a mining operation and, at the bottom of that list, a single farming company: Paramount Farms International LLC, part of Wonderful, the largest agricultural grower in California.

Question is, how long will Kern's cash cow hold up?

Oil is a declining resource: We take it out and never put it back in. At some point, no matter how much a barrel sells for, the property tax income it generates won't amount to much locally.

Kern County reached peak production in 1987. Even when oil hit $100 per barrel in 2014, producers in Kern pumped the equivalent of less than 175 million barrels — a lot less than 1987's roughly 280 million. And it continues to drop.

To look at the trajectory of local oil production is to invite a host of worries.

If the current rate of production decline continues, Kern County will run out of oil — economically recoverable oil, that is — in about nine years. At a slower, more favorable rate, the oil lasts until 2057 or so.

What then?

"That's a good question," Lifquist said. "How do you make that up?"

Clearly, economic diversification would help. The county could eventually draw in enough new businesses and industries to support itself on the current level of property tax revenues.

But maybe there's another way, like new technology.

There will probably always be oil under Kern County. But not all of it is economically recoverable, which is the portion the county's property tax revenues are based on.

Consider what happened when directional drilling and the fracking revolution were brought to bear in the Midwest. An overlooked asset known as the Bakken Shale suddenly became one of the world's most productive oil regions.

This could possibly happen here. The Bakken, for all its massive reserves and investment, is dwarfed by the Monterey Shale underlying much of Kern County and other parts of California.

Problem is, petroleum engineers are still trying to figure out how to tap the Monterey. Success on their part would probably turn California into the nation's biggest oil region.

"Certainly, I think we’re all cheering for the oil companies to crack that, to figure out a way to get that Monterey Shale," Lifquist said. "That would be a huge economic boon to us.”

Meanwhile, Kern's dependence on oil for its property tax income is a giant benefit. It's also, over the long term, a huge liability.

(1) comment


State regulations may play a larger role in the future of Kern County oil production than diminishing reserves. View Gavin Newsom's views at

If Newsom is elected governor and his policies are enacted Kern County's tax revenues from oil properties will decline. This will only exacerbate local government's already dire financial condition. If oil property tax revenue decline how will the county pay for the billions in unfunded pension debt?

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.