Southern California Bans on Oil Production Would Harm Workers, Hurt Southern California Economy

Southern California Bans on Oil Production Would Harm Workers, Hurt Southern California Economy

April 22, 2014

California’s oil industry provides hundreds of thousands of jobs and pays billions in tax revenue each year, according to a new study by the Los Angeles Economic Development Corporation (LAEDC) released this week by the Western States Petroleum Association. In contrast, local proposals to limit oil extraction could threaten these significant economic contributions and increase the state’s dependence on foreign oil sources.

The LAEDC study demonstrates the petroleum industry in Southern California is a huge source of jobs and economic activity.  Highlights from the report include:

  • In 2012, the petroleum industry contributed to 212,220 total jobs in Southern California and generated almost $17 billion in labor income.
  • In Southern California, the state and local taxes paid by companies and individuals involved in the petroleum industry total $10.6 billion.
  • In Los Angeles County, the petroleum industry contributed to 48,715 total jobs and generated more than $5.7 billion in labor income.
  • Jobs created or supported by the petroleum industry statewide generate $40 billion in labor income, which is 3.1% of California’s total labor income.
  • Statewide, the petroleum industry’s total economic value is $113 billion, which is 5.4% of California’s total gross domestic product and is larger than the economies of 17 U.S. states.

“According to the report, more than 103,000 jobs in Los Angeles County come from the petroleum industry, which is more jobs than anywhere else in the state.  This statistic demonstrates how critical the industry is in creating quality local jobs and how those wages support our local economy,” said Tracy Rafter, Founding CEO, Los Angeles County Business Federation.

Several Southern California municipalities including Beverly Hills, Carson, Compton, Culver City and Los Angeles are considering bans on safe, proven oil extraction technologies.  Earlier this month, the California Chamber of Commerce designated two proposed state laws to limit oil production as “Job Killers”.

California currently produces slightly more than a third of the crude oil it needs every day to meet the demand for gasoline, diesel and jet fuel and 12 percent of that oil comes from production in Los Angeles County.  The rest of the oil we need every day is imported, almost all of it in ships and much of it from foreign governments like Saudi Arabia, Iraq and Ecuador, which do not have the same environmental standards as California.

“Any reduction in domestic oil production here means more dependence on foreign oil,” said Catherine Reheis-Boyd, President of the Western States Petroleum Association.  “We should be looking for ways to encourage more domestic production of oil and jobs that go with it rather than passing laws that reduce our domestic energy production.”

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Californians for Energy Independence is a coalition that supports state and local policies that allow for continued domestic energy production and opposes those policies – such as oil taxes and energy bans—that would hinder production and increase reliance on foreign oil.

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