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State study on phasing out oil production finds Kern will see greatest costs, benefits

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A silhouetted oilfield worker concentrates on his work on top of this oil rig on a small oil lease in this 2015 file photo.

Phasing out California oil and gas production in service of Sacramento's goal of statewide carbon neutrality by 2045 will require difficult health and economic tradeoffs impacting Kern more than anywhere else in the state, according to a new report intended to help policymakers navigate the transition.

A team of researchers at the University of California, Santa Barbara determined cutting in-state petroleum production by even 90 percent will cost the county an average of 1,700 jobs annually, by one modeled scenario, and $27 million in property-tax revenues per year through 2045 — but that it will also improve Kern's mortality rate a total of 25 percent because of local reductions in particulate air pollution.

The report, little noticed since its release two days before Gov. Gavin Newsom on Friday ordered state air-quality officials to map out an end to in-state oil and gas production within 24 years, does not make specific recommendations on how to proceed. Rather, it informs the California Air Resources Board's climate planning work by offering scenarios for how the transition could play out.

One of the study's lead authors said in an interview the report shows Kern is "where the rubber hits the road" on California's efforts to address climate change by focusing on the transportation sector, deemed responsible for about half the state's greenhouse gas emissions.

"There are some very, very hard tradeoffs," said economist Kyle Meng of UCSB's Bren School of Environmental Science & Management. California has ambitious climate goals, he added, "but let's not be rose-tinted about how hard this is going to be."

MORE FINDINGS

Among the researchers' findings was that a standard buffer zone around oil and gas operations, proposed by environmental justice advocates and now under consideration by state regulators, would have more significant health and employment impacts in Los Angeles County than in Kern because of differences in population density.

As a strategy for helping economically disadvantaged communities, the study found that buffer zones — also known as setbacks — hold less potential for reducing oil production than auctioning off drilling permits. Researchers attributed the difference to the two options' distinct ways of reordering which oilfields are left in production.

The report also found that 38 percent of Kern's air pollution comes from local oil and gas production, and that county residents would reap almost a third of the state's total health benefits from phasing out petroleum production by 2045.

Additionally, the team of 17 researchers with specialties spanning economics, energy and climate science determined oil production accounted for no more than 9,400 jobs countywide in 2019, and that no more than 74 percent of that total is direct industry employment.

A senior representative of California's oil industry questioned some of the report's conclusions as others in the business said they were still reviewing the findings.

"This report uses false assumptions and fuzzy math to push a false narrative that phasing out oil production will not destroy Kern County's economy," Rock Zierman, CEO of the California Independent Petroleum Association trade group, said in an emailed statement. He added that CARB has reported in-state oil production contributes only about 4 percent of California's greenhouse gas emissions.

BETTER WAY?

Kern County refinery executive Jennifer Haley took issue with the report's focus on phasing out oil and gas production, saying there's consensus on the need to meet climate goals but not the best methods for doing so. She said cutting in-state supply only shifts production overseas.

"It's almost like hitting the fly with a hammer," she said. "There's a better way."

The Center for Race, Poverty & the Environment, a locally prominent environmental-justice group actively calling for a phase-out of local petroleum production, said it was unprepared to comment on the report.

The study is one of two commissioned by the state Legislature in 2019 pursuant to California's carbon neutrality goal. The other report focuses on how to slash demand for petroleum by promoting measures such as greater use of zero-emission transportation.

CARB officials emphasized much planning work remains to be done before the agency takes steps to carry out the governor's orders based in part on the UCSB report's findings. They noted the work will reflect public input and be updated every five years.

The agency's deputy executive officer of climate change and research, Rajinder Sahota, said in an interview CARB will explore other ways to achieve carbon neutrality beyond just cutting oil production, and that even as oilfield employment declines it is expected there will be other jobs to take their place.

"I think there will be creation of jobs and they will be different jobs," she said, adding that CARB's climate strategies will be considered on a statewide basis, not county by county.

FINDING BALANCE

Separately from that activity, the Governor's Office of Planning and Research expects to release a report in July showing how state government can transition to a cleaner-energy future without sacrificing economic growth, including in areas such as Kern.

The UCSB researchers noted California's oil production volume has been falling since the mid-1980s and that, without state intervention, the industry could be expected to decline by 38 percent on its own, leading to a 44 percent reduction in statewide greenhouse gas emissions.

They also determined that as air pollution related to petroleum production declines across California, the benefits will go primarily to economically disadvantaged communities.

Meng said another implication of the report's findings is that the state needs to begin planning a switch to greater production of biodiesel or renewable energy as officials in Sacramento "think about how to offset" expected job losses in Kern.

A online version of the report, at 108 pages an abbreviation of the 500 pages sent to the state, can be viewed at https://zenodo.org/record/4707966#.YIh8RulKiL_.