Did you feel the earth shift earlier this month?
In a vote that received inconsequential coverage compared to the massive political aftershocks it could trigger, the California Assembly voted 37 to 24 to reject a ban on oil and natural gas hydraulic fracking. A dozen Democrats joined 25 Republicans in essentially handing the Sierra Club something it isn’t used to in Sacramento — a defeat.
And to show that the next Peripheral Canal-style issue that could realign political interests may indeed by fracking, 18 Democrats abstained.
The reasons they abstained reads like a primer of the 1980 Peripheral Canal showdown but with oil replacing water as the main event. They didn’t want to undermine party leadership, long-term economic well being and jobs in poorer sections of the state were at stake, big labor had a lot to lose, it is a line-in-the-sand issue for environmentalists, and the highly urbanized sections of the state and poorer rural areas are at opposite ends of the spectrum.
And just like the Peripheral Canal 2.0 debate — the Twin Tunnels — the fracking fight is taking place in our own back yard here in the San Joaquin Valley.
One of the best kept secrets in the fracking debate in California is the fact it has been going on here for years. About a third of the producing oil wells in this state already use chemicals, sand and water — in other words fracking — to pull oil out of shale rock.
Slapping a moratorium on fracking would have thrown thousands of Californians out of work — especially in the poorer Southern San Joaquin Valley around Bakersfield. And these are not just $10 an hour jobs. They typically pay between $50,000 and $100,000 a year. Besides the fact they are union jobs, the money those paychecks inject into local economies has a major uplifting impact as oil workers spend on consumer goods.
The loss of those jobs would have a negative ripple effect just like the doubling of the jobs would have a major positive impact.
The United States Energy Information Administration estimates there are 15.4 billion barrels of oil within the 1,750-square-mile Monterey Shale that is primarily located beneath the San Joaquin Valley. That’s a third of the estimated shale oil reserves in the United States.
To put that in perspective it is twice the size of the Bakken Shale in booming North Dakota and five times the size of the highly productive Eagle Ford Shale in Texas.
The unemployment rate in Bakersfield is 12 percent. The jobless rate in Houston is 6.2 percent.
A better comparison, though, might by in shale oil boom USA — Williston, N.D. It’s at the heart of the Bakken Shale development. Unemployment there is 0.9 percent with annual job growth of 32 percent.
While it wouldn’t replicate the Williston experience due to the North Dakota community being rural, it would go a long way in changing the fortunes of one of the state’s poorest regions not to mention the state’s economy. University of Southern California researchers estimate more intense development of Monterey shale oil would generate 2.8 million new jobs by 2020 in this state as well as generate $24.6 billion in state and local taxes.
But just because it won’t create a true boom economy with near 100 percent employment isn’t a bad thing. Williston has been hit with hyper wage and housing inflation squeezing out poorer workers from the ability to rent housing, even those making $17 an hour filling jobs at Wal-Mart that pay roughly half that elsewhere. A shale oil boom would give the Bakersfield-South San Joaquin Valley an uplifting industry much like high tech has helped raise the standard of living of the entire Bay Area.
It is why it is ironic that the politicians voting in unison to put a moratorium on fracking are from areas such as San Jose and Los Angeles, two regions — by the way — that benefit immensely from taking the San Joaquin Valley’s water and existing oil production.
The Assembly vote is by no means a green light for expanding fracking. Coastal Democrats are committed to suffocating fracking through regulation while environmental groups are vowing to take the fight to court.
At any rate, the Assembly vote signaled it isn’t business as usual in Sacramento.
And that is good news for those struggling to survive and thrive in the region of California that a Congressional Research Service report has called the “New Appalachia” — the San Joaquin Valley.
This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209-249-3519.