Before the county board OK’d placing Measure J on the ballot, supervisors had the option of delaying the process to conduct an economic analysis but chose to bypass that choice and send the proposal to voters. Without a county economic report to precede the November ballot decision – whether to ban hydraulic fracturing, cyclic steaming and acidizing as extraction techniques along with all petroleum activities in rural residential zones near the two cities – the local farm bureau went ahead and conducted a study of its own.
Note: This is part three in a four-part series.
Before the county board OK’d placing Measure J on the ballot, supervisors had the option of delaying the process to conduct an economic analysis but chose to bypass that choice and send the proposal to voters.
Without a county economic report to precede the November ballot decision – whether to ban hydraulic fracturing, cyclic steaming and acidizing as extraction techniques along with all petroleum activities in rural residential zones near the two cities – the local farm bureau went ahead and conducted a study of its own.
The farm bureau commissioned the work as a countermeasure to the November ballot initiative. That study, released last week by the farm bureau and other members of the organized opposition against Measure J, offered projections related to local employment and general economic activity in the petroleum industry. It is focused on numbers relating to two oil companies operating here, Patriot Resources and Citadel Exploration. Citadel Exploration is pursuing development of the oil field near Bitterwater where the company believes it can extract 20 percent to 60 percent of an estimated 100 million barrels of oil in place.
That farm bureau document put together by Applied Development Economics breaks down potential job gains and economic activity under three scenarios – low, mid and high – and concludes the local oil industry could add more than $4 billion in market value over the next three decades and nearly 15,000 jobs under the high scenario. Those numbers, as stated in the report, take into account a maximum-potential outcome and up to 1,000 wells from Citadel alone in its Bitterwater-area field near Pinnacles National Park. Measure opponents also point out that many of the jobs would be high-paying positions at an estimated range of $95,000 to $112,000. The low scenario in the report, meanwhile, estimated generating 162 jobs and $47 million in output.
“This thing could produce thousands of jobs,” said John Eade, a fifth-generation rancher who has been active in the campaign against the initiative.
Figures presented in the farm bureau report, however, also would be quite a jump from the current activity – which generated just $1,162 in county tax revenue this past year. The report, meanwhile, acknowledged challenges to accomplishing those maximum figures such as the fact that the county’s workforce barely eclipses 20,000 people now.
Plus, Measure J supporters such as Andy Hsia-Coron, a skeptic of the economic potential as it pertains to oil extraction locally, have said other geographic areas would absorb much of the economic gain if the oil companies were allowed to move ahead on their wells. Additionally, opponents have pointed to a recent nosedive in the projected amount of recoverable oil from those heavy, hard-to-reach deposits in the Monterey Shale – down from 15.4 billion barrels to 600 million barrels.
“Our position is that it’s very close to King City,” Hsia-Coron said. “Most workers would come from there.”
Supporters of the measure also have argued fracking and other enhanced recovery practices would pose risks to the groundwater, a vital resource for the county’s number one industry, agriculture, which brought in a record $330 million of production last year.
“Is it worth fracking in the San Juan Valley and risking contamination of the aquifer?” said Supervisor Anthony Botelho, an apple farmer who represents the San Juan area and supports Measure J. “You’ve got to weigh your risks.”
Hsia-Coron said agriculture “depends on clean water.”
“Tourism depends on natural beauty,” he said. “Livable communities depend on people wanting to live here. All those things could be put at risk with the kinds of activities happening in other parts of the country.”
Those activities aren’t happening too far from San Benito County as things stand. As underscored by Eade, the San Ardo oil field in southern Monterey County produces thousands of barrels per day, and he said there is never cross-contamination there despite row crops and the Salinas River being nearby. Kristina Chavez Wyatt, the San Benito County Business Council’s executive director and a consultant working for the organized opposition, has often pointed out during the campaign that Monterey County’s largest contributor to the property tax base, with 7.5 percent of the total, are the oil companies at San Ardo. She said it is now the eighth-largest oil field in the nation and uses steam injections.
Farther south, however, is an even more extreme example of potential economic impacts from the oil and gas industry.
Kern County in Southern California, home to Bakersfield, is the largest oil-producing county in the nation. It is also producing about 10 times more renewable energy than the next county in California, Imperial, said Richard Chapman, president and CEO of the Kern Economic Development Corporation.
In Kern, where a vast majority of the state’s fracking is happening, about 40 percent of the $35 billion economy is from the oil industry, Chapman said.
“Agriculture has more employment but per capita, income is less,” Chapman said.
He said there were 25,900 oil industry jobs in 2012, the latest figures he had readily available. The total, which included “indirect” jobs from ancillary businesses, such as suppliers, was 47,000, he said.
It has been one of the fastest-growing counties in the nation with about 840,000 people, but he also pointed out it has been number one in upward mobility in terms of residents moving up the economic ladder.
“There are various career paths,” he said. “This is a good, solid career path where you can afford to raise a family, have a home.”
In much smaller San Benito County, though, where water is in high demand for the $330 million agriculture industry – particularly a booming organic sector anchored by Earthbound Farm – the opposition has stressed the need to weigh environmental risks versus economic benefits. Hsia-Coron, with Protect San Benito, also discounted the opposition’s argument over the nation gaining energy independence from foreign countries – and called it a bait and switch because oil will “go wherever the market” pays the most.
“This area has been kind of a pioneer in organic agriculture,” Hsia-Coron said.
Another measure supporter, retired Gavilan College professor and current Gavilan Trustee Tony Ruiz, believes there are other ways to build sustainable communities than through oil and gas. He called this area the “last frontier” of Silicon Valley.
“It’s finally our turn,” he said. “And this is a wonderful place for people to live. It’s not going to be a wonderful place if you have oil wells sticking up all over the place.”
