California Oil and Gas Industry Decline to Reach Negligible Levels by 2045

California's oil and gas industry has been in decline for over two decades, according to a new report from the UC Merced Community and Labor Center. The report, titled Fueling Transitions, highlights the dramatic decrease in oil production across the state, with projections showing that it will reach negligible levels by 2045, when California aims to achieve carbon neutrality.

The decline of the oil and gas industry has significant implications for employment, property taxes, and county budgets. In 2021, oil and gas workers earned an average of $26,500 more than their counterparts in other industries with similar education levels. However, these workers are projected to lose an average of $35 million per year in pay premiums as the industry declines.

The report also found that oil and gas property tax revenues make up a small percentage of total property taxes for Kern (11%), Contra Costa (2%), Solano (1%), and Los Angeles (0.4%) counties. Interestingly, despite the steady decline of the oil and gas industry, Kern, Los Angeles, and Contra Costa County's general fund balances have increased nearly every year since 2000.

The report outlines several recommendations for supporting displaced oil and gas workers and creating a stabilization fund to protect public budgets, services, and jobs. These recommendations were identified by the study's Community Advisory Board.