What's at stake?
As California moves to phase out oil extraction by 2045, some labor and business representatives say they're worried about how the changes will impact Central Valley oil and gas workers.
As California pushes to phase out fossil fuel reliance, a Central Valley business group has launched a campaign to save oil jobs — a move critics called an oil industry publicity stunt.
On Thursday, the Central Valley Business Federation launched its “My Job Depends On Oil” public awareness campaign designed to fight for oil jobs in California, modeled off the federation’s “My Job Depends on Ag” campaign.
“What this is all about,” said Clint Olivier, chief executive officer of the business federation, in a news conference on Thursday, is “letting folks know, ‘hey, my job, my community, my family depends on oil.’”
Thursday’s announcement is the latest example of efforts by Central Valley groups to stall or prevent California’s goals to transition away from a reliance on fossil fuels.
Gov. Gavin Newsom’s administration has called for the end of the sale of new gas-powered cars by 2035, as well as to ban fracking by 2024 and to phase out oil extraction by 2045.
In March, the Fresno / Madera / Tulare / Kings Building Trades Council joined the Fresno County Board of Supervisors to call for increased domestic oil production in response to the rising oil prices.
In a news release, Olivier said that the state is moving away from oil and gas “without any realistic plan for a just transition” for workers.
“Just Transition” refers to a policy framework that provides protection, support, and compensation for displaced workers and communities in specific industries or regions.
The Bee/Fresnoland reached out to the Governor’s Office of Planning and Research for a response and details on their just transition planning but didn’t receive an immediate response.
California has invested $500 million to fund regional planning for climate-forward jobs through the Community Economic Resilience Fund. The state has also allocated $50 million for a displaced oil and gas worker fund pilot and $10 million in “high road” job training partnerships that “deliver equity, sustainability, and job quality” including in areas that have high concentrations of oil jobs, like Kern County.
But a February CalMatters report shows that the state’s just transition planning is off to a rocky start and has pitted unions against unions.
In an interview with The Bee/Fresnoland on Tuesday, Jeremy Martin, a senior scientist and director of fuels policy for the Union of Concerned Scientists, a national nonprofit science advocacy organization, said California’s transition to electric vehicles over the next couple of decades will be “challenging” – but that it’s also “inevitable.”
“The fact that California is switching to electric vehicles is the law of the land,” he said.
Martin said he does not think public awareness campaigns such as “My Job Depends on Oil” help workers in a meaningful way. The Central Valley Business Federation’s founding members include oil, gas, and energy businesses such as Chevron, SoCal Gas, Western States Petroleum Association, and Aera Energy LLC.
“When you see PR (public relations) exercises from the oil industry or others, we have to question: is this their old tactics of deception and delay?” Martin asked. “Because that’s not going to help the affected communities.”
How many California oil and gas jobs are at risk?
Tyson Bagley got his start in the oil industry as a “roughneck,” drilling for black oil in west Bakersfield and Ventura County. Today, he works in the health and safety department of the Phillips 66 Rodeo Refinery in the Bay Area and is president of United Steelworkers Local 326.
“We’re proud of the work that we do,” he said in an interview with The Bee/Fresnoland on Thursday. “There is a sense of pride to work in the energy industry.”
Bagley said he’s concerned that California’s policies will result in the loss of good-paying jobs. “That’s not OK because you’re affecting people in real-time.”
The Central Valley Business Federation estimates that 366,000 jobs in California are “supported by the oil and gas industry,” based on an analysis of American Community Survey data in a 2019 study conducted by the Los Angeles Economic Development Corporation on behalf of the Western States Petroleum Association.
The same study found that there are 115,000 directly employed in the oil and gas industry in California. In Fresno County, approximately 3,000 workers are employed by the oil and gas industry. In Kern County, there are 14,213 direct employees in oil and gas industry jobs, according to the LAEDC.
Others suggest the number of direct jobs in the industry is much lower. In January, the Food & Water Watch, a Washington D.C.-based nonprofit watchdog organization found that only 22,000 Californians were involved in oil production in 2020, from their analysis of data from the Bureau of Labor Statistics.
Bagley said he’s a “realist” and knows “the industry is changing” – but that he wants to make sure oil and gas workers are included in policy conversations around transitioning workers into other industries.
“The blue-collar workers of America need to be at that table in every discussion that’s made about the future of their lives,” he said. “We should not have other people making those decisions without our input.”
Despite complaints about the lack of transitional planning, research on California’s renewable energy jobs shows job gains.
A 2020 report prepared by the UC Berkeley Center for Research and Education suggests transitioning to a green future will bring hundreds of thousands of jobs to California.
The report found that between 2003-2014, about 52,000 direct jobs were created in California, due to the construction of renewable energy facilities.
Researchers project that between 2015-2030, increasing California’s renewable energy portfolio standard to 50% by 2030 would create about an additional 354,000 to 429,000 direct jobs.
Still, Bagley said he’s concerned that just transition and retraining programs will push oil and gas workers into other industries that don’t compensate “anywhere near the level” of what current oil workers make.
The LAEDC report found that the average annual wage for oil and gas industry employees is $80,500.
Concerns about the electric vehicle costs, infrastructure for trucking
Workers aren’t the only ones who are concerned with how the transition to electric energy will impact them: Central Valley trucking industry representatives also expressed concern about the transition.
Paul Sihota is the president and chief executive officer of Smartway Express, Inc., a Fresno-based trucking company that delivers produce and refrigerated meats and cheeses. He’s also the rural member at-large on the Fresno County Transportation Authority.
The business currently has a fleet of 80 trucks that run on diesel fuel. Sihota said that transitioning to electric trucks would cost him about $40 million for the trucks alone – not counting the costs to upgrade his facility with electric charging infrastructure.
Sihota said one of the challenges for his business switching to electric vehicles is the lack of infrastructure in states outside of California. “We also run cross country (deliveries) and the technology is not there,” he said.
Still, Sihota said he’ll eventually buy electric vehicles because it will be mandated. He added that beyond subsidies to buy electric vehicles, he’d like to see more support for electric infrastructure and the electricity grid.
“Think the state needs to focus more on that so it’s a smooth transition,” said Sihota.
Oil, gas industry under scrutiny this week
The “My Job Depends on Oil” campaign launch comes just days after the California Energy Commission held a public hearing to understand what’s driving California’s high gas prices.
Five of the state’s leading oil producers — Chevron, Marathon, PBF Energy, Phillips 66 and Valero — declined to participate in the hearing, a move Newsom described as “stonewalling” the public.
These companies have experienced record profits in the third quarter of 2022, the governor’s office pointed out in a statement.
Olivier, of the Business Federation, said “what we’re doing is not connected to Sacramento” and that the timing of this campaign launch is purely coincidental.