Local oil's value not worth risks

By Janet Blevins, SB CAN Board Member

for the Lompoc Record

May 29, 2014

Boosters and speculators have been heralding the potential of shale oil in California, and the jobs and tax revenues it could bring.

While federal energy authorities have just drastically reduced their estimates of recoverable oil here, there's no doubt production has been ramping up in our area, with Santa Maria Energy's 136 wells approved last fall, PetroRock's 56 wells approved in March, and investments pouring in, such as the $665 million from Beijing-based Chinese Goldleaf Jewelry Co. Thousands of potential new wells have been identified.

The downside is that this unconventional oil can only be extracted through water-intensive, high-emissions processes like fracking and steam injection.

In North Dakota, where a shale oil boom is in full swing, wells dominate the landscape, and there have been thousands of reported leaks of fracking fluid and oil. Unconventional oil production has been linked to air pollution, water contamination, health problems, livestock deaths and even earthquakes.

Are the economic benefits of increased oil production worth the risks? One surprise is how few jobs the oil industry actually creates. According to the Santa Barbara County Industry Cluster report, the oil industry employs fewer than 0.2 percent of our workforce — a mere few hundred jobs — compared to 36,000 jobs in agriculture and tourism, and 11,000 people in the highest-paying sector, technology.

Oil companies like to tout property tax revenue, but they contributed just 2.5 percent of property tax revenue collected in Santa Barbara County last year.

Meanwhile, increased oil production puts the rest of our property tax revenue at risk by decreasing the value of surrounding farms, homes and businesses. The University of Alberta found that oil facilities, "have significant negative associations with property prices," while a study from the National Bureau of Economic Research found that, "groundwater risk reduces property values by up to 24 percent" in fracking areas in Pennsylvania.

Who wants to move in, launch a startup, or promote a tourist destination next to an unsightly, possibly hazardous oil operation? And what happens when agriculture and vineyards have to compete with oil production for limited water reserves, particularly in a drought?

Studies show that too much reliance on oil has negative long-term economic impacts. According to a 21-year study released by Headwater Economics in December, "Prolonged oil and natural gas specialization leads to lower per-capita income, more crime, and less educational attainment."

This may be why Kern County, which produces 81 percent of California oil, is still one of the poorest counties in the state. It ranks 49th lowest out of 58 counties in the state in per-capita income. Bakersfield elementary schools rank at the bottom in per-pupil spending.

Perhaps it would still be worth the risk, if we had to have the oil. But fuel use in the United States has been declining for the past decade, due to changing driving patterns and greater fuel efficiency. According to the White House, new fuel-efficiency standards alone will save 12 billion barrels of oil.

Santa Barbara County's 30 million barrels of oil a year is a drop in the bucket, and it's of no use locally, since it must be transported elsewhere to be refined. There's little reason to put our local environment and economy at risk in order to let Chinese and other companies use extreme and risky techniques to extract oil and sell it on the global market.

A better choice would be to ban fracking and other extreme extraction, as vintners did in France, and as tourism centers such as Santa Cruz and Beverly Hills have already done in California, and to embrace renewable energy and public transportation instead.

California is rich in sun and wind, and investing in renewable energy creates more and better jobs than fossil fuel per dollar invested, and is more compatible with other economic sectors like agriculture.

Janet Blevins is a Lompoc resident and board member of Santa Barbara County Action Network (SB CAN). She can be reached at [email protected]. The Forward View is a progressive look at local issues that runs on Thursday.

Published in the Lompoc Record: