What would the impact be of Gov. Gavin Newsom’s executive action to halt all oil extraction by 2045?
Considerable and costly, especially for Kern County, a report released days ahead of Newsom’s announcement last week finds.
The key finding? That an 80 percent cut in oil extraction would lead to a seismic fall-off in tax revenues for local counties.
Researchers evaluated two different scenarios: one with an 80 percent decrease in oil extraction and another with the same decrease along with a 2,500-foot setback for extraction sites (a policy championed by environmentalists).
Under the two scenarios, Kern County would see a fall-off in annual tax revenue of between $24.4 and $27 million by 2045.
Fresno County, which as a vastly smaller oil production corridor, would see a county tax revenue hit of $1.37 to 1.42 million annually by 2045, researchers found.
The economic fallout of the move extends far beyond sheer tax revenues and into the job market, too.
UCSB researchers found that Kern County’s oil industry presently supports $1.26 billion in direct compensation and indirect compensation (via industries connected to the oil industry in the region) for workers.
Fresno’s production, on the other hand, currently generates a total of $234 million in direct and indirect compensation for workers.
Implementing so-called “decarbonization” efforts to cut oil extraction by 80 percent would eliminate $3.4 to 3.8 billion in direct and indirect compensation to workers in Kern County between 2019 and 2045.
For Fresno, the impacts would eliminate between $548 and $659 million in direct and indirect compensation during the same 26-year period.