Carbon business park planned in western Kern could bring 22K jobs, $88M in tax revenue
A new analysis has found a giant carbon management business park envisioned in western Kern could go a long way toward replacing local jobs and tax revenues expected to be lost as state and federal climate action continues to erode the county’s oil and gas industry.
If the proposal is able attract the estimated $1.3 to $2.5 billion in private investment needed for construction, and assuming it clears environmental hurdles, the proposal would be expected to create at least 13,540 jobs and more than $41 million per year for local cities and county government.
A less conservative estimate suggests the potential benefit could be much higher: as many as 22,014 new jobs and up to $88 million in local tax revenues, according to the county-ordered report by Yorba Linda economic consulting firm Natelson Dale.
“The CMBP promises to be a significant economic driver that will further enhance and complement our region’s incredibly diverse and dynamic energy portfolio,” President and CEO Richard Chapman of Kern Economic Development Corp. said in an email Friday. He serves on the park’s executive steering committee along with representatives of local industry, higher education, government and environmental justice groups.
Kern County’s chief administrative officer, Ryan J. Alsop, explained the county’s intentions in an email:
“The development of a Carbon Management Business Park, and the board’s consideration of this agenda item, is in line with our adopted five-year strategic plan to prioritize the development and continued growth of a thriving, resilient regional economy, which means promoting and supporting our county’s position as a national energy leader, and further strengthening our position as the alternative energy technologies and solutions leader among all other counties in the state of California.”
Planning of the business park has been spearheaded by Director Lorelei Oviatt of the Kern County Planning and Natural Resources Department and largely funded by a technical assistance grant last year from the U.S. Department of Energy. Its conceptual development has run concurrently with progress by local oil and gas producers on related proposals for capturing and burying carbon dioxide.
Permanent burial of greenhouse gases is the various projects’ common link. Incentivized by state and federal tax credits and driven in part by potential revenue from the market for private carbon credits, carbon capture and sequestration, or CCS, would deploy a set of advantages unique to Kern. These include vast underground reservoirs in areas suitably far from residential development, existing energy infrastructure, business-friendly permitting and local industrial and underground injection expertise.
Another factor seen as critical to continued state and federal support is the damage that climate action does to Kern’s employment and tax base. Policymakers have acknowledged weaning California off internal combustion engines will eliminate thousands of good local jobs and cost county government many tens of millions of dollars per year in property tax revenue.
Natelson Dale’s assessment, released Thursday as part of a county staff report previewing a presentation scheduled for Tuesday to the county Board of Supervisors, provides the clearest picture yet of how much the local economy may stand to gain if the carbon management business park proceeds as planned.
The report contained the caveat that the CMBP proposes to include new types of industries that, so far, have not built installations of the scale the county envisions. It noted property valuations the tax revenue projections are based on assume industrial zoning will be applied across 4,000 acres, with an additional 30,000 acres set aside for commercial-scale photovoltaic solar arrays to power the business park. Also, extensive environmental reviews subject to scrutiny by skeptical advocacy groups would have to be approved before development could begin.
That said, the consultancy’s most conservative guess was that the county would receive almost $24.2 million in property tax revenue per year as a direct result of the business park’s development, plus $4.3 million in sales tax income. Local cities, it said, would annually get more than $4.5 million from property tax and $8.4 million from sales tax.
The more optimistic view was that county’s annual property tax revenue would grow by more than $56 million if the CMBP comes to fruition, while sales tax receipts would rise by almost $8 million per year. For cities, the figures were $8.4 million and $15.6 million, respectively. The report’s new-employment projections included wage estimates of between $1 million and $1.8 million, led by jobs in a steel micro mill with between 500 and 1,501 positions, green hydrogen (368 to 1,228) and a research-and-development incubator site (325 to 876).
A broad jobs category called ancillary clean energy industries was expected to add a total of between 11,682 and 15,575 new positions.
Suzanne Noble, senior director of production operations at the Western States Petroleum Association, who serves on the CMBP executive steering committee, said in a statement that the trade group is proud to be part of the effort. “These types of partnerships show the importance of the oil industry today and for the future,” she wrote. “The county, with the support of the Department of Energy, is taking the lead in energy innovation.”