Some of 2015’s biggest local business news goes without saying.
It was hard to miss the widespread economic havoc caused by plunging oil prices, for example, not to mention the hardship farmers suffered because of the drought. (We covered those stories in our top 5 headlines of the year package published Christmas Day.)
No less compelling were unrelated developments in Kern’s oil, ag and other industries.
Some were clearly good news, like improvement in the county’s unemployment rate. Some, like a fatal gas line explosion near Bakersfield, were undisputably bad. Others were not so easily categorized.
Here are our picks for the five biggest local business stories of the year:
COUNTY OKS NEW OIL, GAS PERMITTING PROCESS
After almost three years of work, the county amended its zoning ordinance in ways that give petroleum producers unprecedented regulatory certainty — at significant expense.
When three oil trade groups proposed the change in late 2012, offering to cover all related costs, the main idea was to supplement state-level environmental reviews that had come under legal challenge.
The result was a massive environmental document examining virtually all aspects of local oil production. It outlined a system whereby petroleum companies could get streamlined ministerial permits in exchange for new fees and payments to a fund offsetting impacts to air quality.
Controversies that rocked the plan from the start have continued past the Board of Supervisors’ unanimous approval of the ordinance amendment Nov. 9. Almost the moment the ordinance took effect a month later, environmental activist organizations, a local farming company and a local oil producer sued to halt the process.
While environmental opposition was seen as unavoidable, less certain was the conflict involving farmers and oil producers. Both sides have objected to the county’s efforts incentivizing agreements between “split estate” growers who own the surface and oil companies that control the underlying mineral rights.
WEST KERN COAL PROJECT FACES HEAD WINDS
A proposed coal-fired power and fertilizer plant dogged by problems throughout its history had its worst-ever year in 2015.
Hydrogen Energy California, a $4 billion project by Massachusetts-based SCS Energy LLC, lost its $408 million federal subsidy in January after a neighboring oil company walked away from a tentative agreement to put the project’s byproduct carbon dioxide to use in local oil production.
Neighbors and environmental groups, long opposed to the 200-employee project near Tupman because of its heavy emissions, storage of dangerous chemicals and use of local groundwater, asked the California Energy Commission to kill HECA last summer for lack of progress.
The agency decided instead to put the project on a six-month regulatory timeout starting in early July. In the interim, HECA announced a plan to inject the carbon dioxide deep below its own site, thereby avoiding the need to find a new partner in oil production.
Commission staff were unimpressed, saying in December HECA had failed to show sufficient progress to justify keeping its regulatory application alive. A decision is expected in early January on whether to give the project more time or dismiss its application altogether.
CITRUS PEST ADVANCES DEEP INTO KERN
An existential threat to Kern County’s $900 million-a-year citrus industry worsened significantly in 2015.
The Asian citrus psyllid, a tiny bug that can carry an incurable tree disease called Huanglongbing, spread throughout residential Bakersfield, forcing state officials to expand a quarantine that now blankets the city.
Although the disease itself has not been found in Kern, agriculture officials are taking no chances. They are entering residential backyards and spraying in an effort to stave off the pest while researchers try to come up with a cure to the disease that all but wiped out Brazil’s citrus industry.
Besides spraying, officials are introducing a tiny parasitic wasp in some areas infested by the psyllid. Other measures proposed to fight the pest are considered more controversial: the use of heavy-duty insecticides and wholesale removal of backyard citrus trees.
So much for locally grown organic oranges.
LOCAL JOBLESS RATE POSTS BEST MARK SINCE 2007
In a somewhat deceiving bit of excellent news, state data from September suggested unemployment in Kern hit its lowest level since 2007.
The county’s jobless rate was estimated at a seasonally unadjusted 8.4 percent, the best on record since the recession took hold in 2007.
There’s a caveat, naturally: September’s encouraging unemployment rate belied the fact that some 3,000 “discouraged job-seekers” dropped out of the county’s economy, at least temporarily, according to the state Employment Development Department, which released the job data. Had these people kept up their job hunts, the numbers would have looked noticeably less rosy.
Still, the total number of jobs in education, agriculture and health-care employment were all up that month, following a gradually rising tide that during 2015 has included hiring in services, construction and hospitality.
If oil prices recover, there may be a good chance the local economy will be on good footing in 2016.
PIPELINE SAFETY RESURFACES AS LOCAL CONCERN
Kern County got a stark reminder of the need to call 8-1-1 before digging when a heavy equipment operator was killed and two other people were badly burned Nov. 13 during preparations for a new almond orchard south of Bakersfield.
An employee of McFarland-based Big N Deep Ag Development Co., 44-year-old Earlimart resident Joseph Michael "Mike" Ojeda, struck a high-pressure, 3-foot-diameter gas line while excavating with what’s called a dozer and ripper near Wible and Houghton roads.
As is often the case in such accidents, the explosion set off finger-pointing between the excavation contractor and the pipeline’s owner, San Francisco-based utility Pacific Gas and Electric Co. Contending Big N Deep should not have been excavating because its dig permit had expired, PG&E won a temporary restraining order requiring the contractor to have a representative of the utility present for all digs. A court hearing that could extend the injunction is set for mid-January.
The incident brought to mind a similar accident at the same site one year earlier, when a Big N Deep employee struck the same gas transmission pipeline. That time, escaping gas did not ignite, and no one was hurt. PG&E was initially faulted for that accident, and it has appealed the tentative finding by Cal-OSHA.
The utility recently faced criticism by contractors who say PG&E has regularly failed to mark pipelines in a timely and accurate way. In an accord announced in October, the company agreed to increase its hiring and training of workers assigned to such tasks.