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    California’s Attack On Energy, Agriculture Threatens Region’s Economy

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    By Joel Kotkin-Real Clear Energy

    Located over the mountains from Los Angeles, Kern County has always been a different kind of place. Settled largely by “Okies and Arkies” from the Depression-era South, the area has a culture more southern than northern, more Ozarks than Sierra. Home to just under 1 million people at the southern end of the state’s Central Valley, Kern is noted for producing the “Bakersfield sound,” epitomized by the late country star Merle Haggard, and is sometimes even referred to as “little Texas.”

    Its economy rested on two natural resource industries that once powered California – agriculture and oil. The region leads California in energy production and is fourth in agriculture, mainly yielding lettuce, strawberries, and grapes. Its concentration of agricultural jobs is 22 times the national average and its oil industry jobs are 6 times the national average.

    Although these may seem like “old economy” jobs, the Kern area has easily outperformed zippy “new economy” places  in total job growth; outside of the Silicon Valley, notes Chapman analyst Marshall Toplansky, Kern is one of few California areas producing mid-wage jobs above the national average – far more than San Francisco, Los Angeles, and Orange Counties, which have fallen behind the national pace.

    In recent years, the area – which even Kern Economic Development CEO Richard Chapman admits has a “Rodney Dangerfield problem” – also has emerged as a magnet for new migrants, even as California continues to lose people at an accelerating rate. Much of this has to do with lower housing prices. Kern is the only California region named by the National Association of Realtors among the ten most popular destinations for millennials.

    In a state suffering from high housing prices and a lack of middle-wage jobs, one would think boosting Kern County and its largest city, Bakersfield (population: 700,000) would be a priority. Governor Gavin Newsom boasts that he wants to look for ways of “unlocking the enormous potential” of the Central Valley, but he seems more interested in flattening the area’s aspirations.

    Climate policy sits at the core of this assault. Reflecting the prejudicial neuroses of his Bay Area and oligarchic base, Governor Newsom – who Dan Walters describes as “California’s champion virtue signaler” – has announced plans to shut down the state’s oil industry. Newsom’s latest unlegislated decree directed state regulators to ban all forms of oil and gas well stimulation technologies, including steam injection, essential for oil and gas extraction in the state. The draft rules, issued last month, would effectively sharply limit California’s oil and gas industry as well as future exploration and development. According to a study by the Los Angeles Economic Development Corporation, these dictates threaten over 366,000 high-paying, largely blue-collar jobs, about half held by people of color. Another 3.9 million jobs, 16.5% of total state employment, are at risk from these policies.

    People in Bakersfield may depend on these jobs, but rigid Ecotopians – backed by investment bankers, social media magnates, and urban real estate interests, the funders of “progressive” politics – want them eliminated. The green push also threatens to destroy the area’s ability to fund local services. Renewable firms thrive in the area – producing 25 percent of all California’s renewable energy, according to the Kern EDC, and serving as home to the nation’s largest solar plant, wind farm, and geothermal facility. But these facilities tend to pay little or no property tax, while oil represents the largest source of local revenue. Green energy won’t do much for the county when faced with the demand for more welfare and other services that would accompany increased joblessness stemming from the demise of oil.

    Nor is energy the only area Newsom is seeking to undermine the local economy, particularly now that California is about to have another of its regular droughts. The last one ended in 2017. Since then, first under Jerry Brown and now Newsom, the state has done little to increase reservoir storage capacity during wetter years. Captured water is increasingly released into San Francisco Bay, rather than used for homes and farms, in a quixotic attempt to “save” species in decline despite decades of “scientific” protection.

    Like the energy sector, agriculture finds itself in the crosshairs of the greens, who link dry weather to climate but oppose the construction of new reservoirs, preferring to use runoff for natural areas like San Francisco Bay and the adjoining delta. The preferred solution to droughts today is not de-salinization or boosting water storage, but wiping out farmland, creating a dystopic landscape of abandoned fields in some of the world’s richest agricultural areas.

    The losers here are not just the “corporate” farms long disdained by California’s progressives. In the last drought, which ended in 2017, thousands of poor and predominantly Latino workers lost their jobs. The most recent drought is hitting just as Central Valley farmers struggle with new groundwater regulations that dramatically cut their ability to cope with reduced runoff from rain and snowmelt. According to the Public Policy Institute of California, groundwater limits will eliminate between 535,000 and 750,000 acres of Valley farmland. Small farmers, who won’t be able to pay for or even secure ever-scarcer water, likely would be the worst hit.

    If Kern’s political leadership seems a bit upset by these policies, it’s understandable. “Imagine that the state dictated that the entertainment industry be eliminated from Los Angeles, or the tech industry be eliminated from Silicon Valley,” says Rob Ball of the Kern County Council of Governments. “That is what removing the oil and agriculture industries from Bakersfield is like. It is an existential threat to the entire area.”

    The conflict here is between hardscrabble types working with their hands and a small, insulated, post-industrial urban elite that prefers to import its energy, food, and labor from outside the state. It’s a class struggle largely about how people should make their livings. If it’s digits and images, no matter how dubious the endeavor, that’s fine; if it’s producing the basics of modern life, not so much. After all, what burdens ordinary people often turns out to be a great opportunity for the politically connected individuals or corporations buying “carbon credits” or investing largely tax-free, guaranteed-profit “renewable” projects.

    In the end, the largely working-class residents of the interior mean little to the coastal politicians who dominate California’s politics. The elimination of factory-, energy-, and food-related jobs does not have much impact on Palo Alto, Marin, or Malibu. It’s generally wealthy people who install solar panels or drive electric vehicles, while many people in the interior, living in a less temperate climate, find themselves far less able to pay the electricity rates that are highest in the continental U.S. Many have already fallen into energy poverty or are dependent on state subsidies that raise electricity prices for business and the middle class.

    Central Valley residents, not surprisingly, are the most pessimistic in the state. In California, their resistance could provide somewhat futile, given the lock on the state’s politics by progressives. But what is happening to Bakersfield also suggests a cautionary tale for vast sections of America – from the coastal ranges to the Appalachians – that depend on blue-collar labor, affordable electricity, and fossil fuels. Certainly, House Minority Leader Kevin McCarthy, who represents Bakersfield, could raise these points on the national stage, particularly if he, as seems possible, becomes speaker after the 2022 elections.

    The imposition of California-style energy policies would be far more devastating to states like Texas, which could lose as many as 1.1 million jobs. The impact also will be felt in key states like Ohio and Pennsylvania, both dependent on energy production and related manufacturing. Overall, according to a Chamber of Commerce report, a full national fracking ban would cost 14 million jobs, far more than the 8 million lost in the Great Recession, with the potential of turning some now-vital smaller towns into slums.

    Following the lead of its California role models, the Biden administration suggests that these losses will be made up by the appearance of “green jobs,” a claim widely ridiculed in a report by the Building Trades Unions. A green job, the report found, is more often than not non-union, of shorter duration, and pays less than work in conventional energy or construction. “It’s pie in the sky bulls— about these green jobs being good middle-class jobs, because they’re not,” Terry O’Sullivan, general president of the Laborers’ International Union of North America told Politico. “I’m concerned about union members and union families being left behind … and I think they’ve already been left behind.”

    Perhaps worst of all, California’s first decade under climate austerity has proven mediocre at best in reducing emissions more than its less climate obsessed (and less temperate) rivals. By sending companies and people to places with harsher climates that demand more energy use, California may be generating as many emissions as cutting.

    If America were a small, resource-poor pygmy, like many European or East Asian states, the assault on the tangible economy might be more tolerable, even strategic. But America is not Europe. Its power comes not just from tech but also from its vast resource base and still-formidable industrial power.

    The progressive effort to destroy a place like Kern County in California may not be easily replicated elsewhere in the U.S. Most of America is more like Kern than like San Francisco. The battle waged in Kern may sound the opening salvos of a greater conflict that could define the future of the United States for decades.

    Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is now out from Encounter. You can follow him on Twitter @joelkotkin

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    George Pattone
    George Pattone
    1 year ago

    Thank you for sharing this important article that foretells the impending economic failure of the California economy, thanks to progressive myopia and emotion-driven virtue-signaling policies that are devoid of any economic logic

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