Santa Barbara- S County

Study Says Fracking Ban Ballot Initiative Bad for Jobs, Economy

Energy industry-backed study targets petition drive in SB County

SANTA BARBARA COUNTY, Calif. - A new energy industry-backed study says a ballot initiative that would ban future "high-intenstiy" oil and gas extraction in Santa Barbara County would kill jobs and harm the economy.

The study by the Los Angeles Economic Development Corporation for the Western States Petroleum Association says the Central Coast oil and gas industry provides hundreds of thousands of jobs which as an economic multiplier that creates more that a billion dollars in labor income every year and pays more than a billion dollars a year in tax revenue.

A November ballot initiative is underway in Santa Barbara County that would ban all future fracking, steam injection and other so-called high intensity extraction methods in the county.

"The reason that I am doing it is because I have a well, I live here, and I drink my water", says petition circulator Rebecca August who volunteers for the ballot initiative, "I depend on my water, my land is worthless without clean water, my family is in farming, my husband is a physician and the Clean Water Act doesn't protect my water from fracking, it was exempted in 2005."

"I feel like if the industry comes in here they can do whatever they want, there's no protection, we have no protection of our groundwater", August says, "no one has studied the risks of what will happen if there is an earthquake, no one has studied the risks of these chemicals in our drinking water, so we don't know, and since we're not protected it makes since to make a ban in our county against this kind of fracturing."

"Point A, we don't frack here, so fracking isn't an issue", says Andy Caldwell with the Coalition for Labor, Agriculture and Business or COLAB, "they are trying to take a campaign of hysteria and apply it to Santa Barbara County when we don't have fracking here."

Caldwell says the oil and gas industry not only powers the county's economy with energy and good-paying jobs but pumps tens of millions of dollars in tax revenue into county government every year.

"They (ballot initiative supporters) are trying to employ a classic divide and conquer mentality and whip people into hysteria and claiming that water is threatened when what this is all about is this organization that doesn't want us using fossil fuels anymore", Caldwell says, "so they are trying to kill the oil and gas industry simply because they believe in global warming, not because oil and gas is a threat."

Initiative supporters like Rebecca August argue high-intensity oil extraction is a threat to the overall economy.

"Fracking uses a tremendous amount of water, and we're in a drought and the industry that we have that is already thriving in this county is dependent on water", August says, "agriculture and tourism, we all depend on water and we have a limited amount of water."

"There are thousands of proposed wells in Santa Barbara County", August says, "this (ballot initiative) does not affect anyone who has a job right now, this doesn't affect current employment at all, this is all about future things, the intitiatve actually protects current employment because it protects farming and it protects tourism and it protects our current industry."

"Nobody is using fresh water supplies, for instance Santa Maria Energy is using wastewater from Laguna Sanitation to make steam", Caldwell replies, "they are mixing fracking with steam injection, they are totally different and the steam injection projects that we know of are going to use wastewater or water from the production zone which isn't drinking water anyway."

"The bottom line here is its not just the jobs dealing with oil and gas, of getting it out of the ground and getting it refined, it's the cost to all of society if our local supplies diminish and we're dependent on bringing that supply here the cost just goes up", Caldwell says, "anytime someone is paying at the pump or to run manufacturing and industrial concerns, everything with the price is going to go up, everytime the price of gas goes up like ten cents in america it costs the economy billions of dollars so there is a huge multiplier efffect from the loss of jobs."

"We will not be able to shift to alternatives for decades until they can become a significant part or our energy portfolio, for instance solar and wind only produce a certain number of hours per day",  Caldwell says "solar and wind is less than five percent of our portfolio."

Here is the press release with the link to the full LAEDC study:

California's oil and gas industry provides hundreds of thousands of jobs and pays billions in tax revenue each year, according to a new study by the Los Angeles Economic Development Corporation (LAEDC) released this week by the Western States Petroleum Association.  In contrast, local proposals to limit oil extraction could threaten these significant economic contributions and increase the state's dependence on foreign oil sources.

The LAEDC study demonstrates the petroleum industry on the Central Coast is a huge source of jobs and economic activity.  Highlights from the report include:

  • In 2012, the petroleum industry contributed to 24,210 total jobs on the Central Coast and generated more than $1.6 billion in labor income. 
  • On the Central Coast, the state and local taxes paid by companies and individuals involved in the petroleum industry total $1.1 billion.
  • In Santa Barbara County, the petroleum industry contributed to 3,414 total jobs and generated more than $349 million in labor income. 
  • In Monterey County, the petroleum industry contributed to 1,087 total jobs and generated more than $109 million in labor income. 
  • Jobs created or supported by the petroleum industry statewide generate $40 billion in labor income, which is 3.1% of California's total labor income.
  • Statewide, the petroleum industry's total economic value is $113 billion, which is 5.4% of California's total gross domestic product and is larger than the economies of 17 U.S. states.

Santa Barbara, San Benito and Monterey Counties are considering measures to restrict safe, proven oil extraction technologies. 

Earlier this month, the California Chamber of Commerce designated two proposed state laws to limit oil production as "Job Killers".  

California currently produces slightly more than a third of the crude oil it needs every day to meet the demand for gasoline, diesel and jet fuel and seven percent of that oil comes from production on the Central Coast.  The rest of the oil we need every day is imported, almost all of it in ships and much of it from foreign governments like Saudi Arabia, Iraq and Ecuador, which do not have the same environmental standards as California.

"Any reduction in domestic oil production here means more dependence on foreign oil," said Catherine Reheis-Boyd, President of the Western States Petroleum Association.  "We should be looking for ways to encourage more domestic production of oil and jobs that go with it rather than passing laws that reduce our domestic energy production."

Here is a response from Santa Barbara County Water Guardians, the group organizing the Santa Barbara County November ballot initiative:

The oil industry is funding a number of front organizations to spread misinformation regarding the importance of unconventional oil extraction to our local economy.

In reality, fracking and related techniques would likely be a net economic loss for our region. 

This Healthy Air and Water Initiative to Ban Fracking doesn't apply to existing projects or conventional oil production, and it doesn't put any existing jobs or revenue at risk.

It simply heads off the potential for future expansion of risky and polluting high-intensity techniques that are particularly problematic in our area because of their:

- High water use

- Toxic chemicals and potential for water contamination

- Proven link to Earthquakes in other places

The oil industry employs fewer than 0.2% of the County workforce and puts the rest of our economy (primarily ag, tourism, tech and services) at risk. Acording to the Santa Barbara County Industry Cluster Report only a few hundred people at most are employed by the oil industry in Santa Barbara out of a workforce of 250,000. Nor are these "safe" jobs. The oil and gas industry has a fatality rate seven times higher than for all other workers, according to data released by the Centers for Disease Control. Industrial oil production tends to crowd other things out. It competes with agriculture for land and water, which could drive up water and food prices. It creates blight that discourages tourism and technology. 

Oil accounts for only 2.5% of County property tax revenue. We're more concerned about the other 97.5% that could decrease in value. 

Fracking and related extraction negatively affect the value of adjacent properties and farms.

A study from the University of Alberta found that proximity to oil facilities, "have significant negative associations with property prices." Another study from the National Bureau of Economic Research found that, "groundwater risk reduces property values by up to 24 percent" in shale gas development areas in Pennsylvania. 

Oil property tax revenue in 2013 in SB County was only $16 million out of $651 million collected, but the net is much less than that as this is an costly industry in terms of County expenditures, which include having to maintain road impacted by heavy industry, public health, full-time staff, air quality reviews and environmental oversight, etc.

We have Chinese companies coming here to drill for oil to sell on the global market -- and risking everything that makes this a beautiful and desirable place to live an work. 

Chinese Goldleaf Jewelry Company  invested $665 million in Santa Barbara County oil fields.

Freeport-McMoran is best known for operating the largest gold mine in the world in Indonesia, with a problematic environmental and human rights record. Greka/Green Dragon is another Chinese oil company with a history of spills in Santa Barbara County. 

In Kern County, which has 30 times more oil production than Santa Barbara County and accounts for most of the State economic value cited by the oil industry, unemployment and asthma rates are higher, and wages and property values are lower than in Santa Barbara County

Studies confirm the downsides of oil production economies:

"Prolonged oil and natural gas specialization leads to lower per capita income, more crime, and less educational attainment."

-- Long-term effects of income specialization in oil and gas extraction: the U.S. West, 1980-2011, Headwater Economics, December 2013


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