A leading economic developer reminds us of our region’s economic strengths and opportunities
Optimism comes easily to Richard Chapman, president and CEO of Kern Economic Development Corporation. The organization represents a coalition of business and government leaders dedicated to ensuring a diverse and strong economic climate for Kern County. Here, Chapman shares the market research that drives his positive outlook.
As we reel from the COVID-10 pandemic, a shaken economy and oil’s sharp price drop, what’s important for Kern County and its neighbors to keep in mind?
The Bakersfield Metropolitan Statistical Area (MSA), which encompasses Kern County, ranked as the 13th most resilient economy out of 384 metros in the U.S., according to a March 2020 study by Chmura Economics, which measured the anticipated impact of the COVID-19 crisis. This is largely due to the fact that our region is rated the third-most diversified economy in the nation (WalletHub). Our proximity to the Los Angeles Basin and its $1 trillion economy is paying dividends as companies leave the heavily urbanized and coastal parts of the state for more business-friendly and cost-competitive areas like Kern County.
You regularly communicate with people and businesses all over California and the nation. What are the biggest misconceptions about the state’s oil and gas industry?
Most people don’t realize that California’s oil producers operate under the most stringent regulatory requirements in the world. Also, the industry is considered the seventh-safest sector (out of 86 sectors) in the U.S. in terms of worker safety, according to the Bureau of Labor Statistics. Moreover, petroleum is not just used to power vehicles but also in every-day items such as smartphones, plastics, cosmetics and pharmaceuticals.
In addition, according to Los Angeles Economic Development Corporation’s annual report for 2019, the industry provides a significant fiscal contribution to the state and local government’s coffers:
- $22 billion in state and local tax revenues
- $11 billion in sales tax
- $7 billion in property taxes
- $1 billion in income taxes
Energy independence should be a priority for any region or nation that strives for economic security and stability. Currently, California imports almost 60% of its oil from foreign sources—compared to an average of 8% in the 1980s and 1990s. Unfortunately, most of these countries have appalling environmental and human rights records. Furthermore, international oil tankers produce over 120 million tons of CO2 emissions per year.
What does Kern County’s oil and gas sector bring to Kern County’s economy?
The oil and gas industry accounts for approximately 25% of Kern County’s GDP, which represents an annual $9.1 billion economic contribution and 24,000 jobs ($1.6 billion in labor income). This critical sector also provides almost $1 billion in state and local tax revenues, which pay for our roads, health care, public safety and schools. These represent one-third of all the public services in Kern County. In 2018, 17 out of 20 of the largest taxpayers in the county were energy companies.
In addition, the industry creates STEM-related employment opportunities that provide an unparalleled opportunity for financial security for our region’s residents. The average salary is $76,000 or 67% more than the annual county average for all industries. The Bakersfield MSA was ranked in the top five in the nation for upward mobility by Harvard University and the National Bureau of Economic Research, due in large part to the jobs generated by the petroleum sector.