Imagine a corporation, through its public relations firm, paying for a study of itself. Actually, this is not an uncommon practice. In this case the study purportedly estimates the economic impact on Santa Barbara County of Aera Energy’s proposed massive oil project in Cat Canyon, between Santa Maria and Los Alamos.
Consider further that the report admits, in its executive summary, that it relied primarily on information provided by Aera itself, the subject of the study. In the 2015 report by UCSB’s Economic Forecast Project (EFP), the limited set of self-reported and unverified data was simply entered into an economic model which then churned out results. Sounds like the old computer concept known as “GIGO” — Garbage In, Garbage Out.
Aera is also a paying advisory sponsor of the Economic Forecast Project. So, we have self-serving and unreliable input data that is used by a “research” organization that is biased by its financial ties to the very company it claims to study. You can’t make this stuff up.
If that is not enough to discount the report’s results, consider that it only looks at positive economic impacts. It simply chooses to ignore all the very significant negative effects and risks of hundreds of new oil wells drilled through the Santa Maria drinking water aquifer and employing extreme methods of extraction.
There will inevitably be well-casing breaches, spills and leaks from pipelines; often we taxpayers are left with huge cleanup bills. Contamination of agricultural and ranching lands can also be devastating and has been well documented.
Moreover, hundreds of additional daily oil tanker truck trips will increase the incidence of tragic accidents here and raise the cost of maintaining our roads. The county may already be losing money on this industry; how much of the $257 million backlog of road maintenance is due to the oil industry, for instance?
Lastly, oil company activity directly results in air pollution that leads to illness and loss of economic activity. Our wildfires could become more frequent and devastating due to the millions of tons of CO2 and methane poured into the atmosphere by this project. And there’s the catastrophic cost should the drinking water supply become polluted.
Oil is a boom-and-bust industry with unreliable property tax revenue. When they choose to pay it rather than disputing an assessment, revenue from oil property taxes still makes up less than one percent of the county budget.
Even if it’s credited with accuracy, Table 1 of the economic report states that the total economic impact of the Aera project would be under $36 million a year. When put in perspective, even if the impact were six times greater — or roughly $220 million per year — it would still contribute less than one percent to the county’s economic activity, which was $24 billion of real gross domestic product in 2015.
The costs we all pay if Aera’s proposed oil project is permitted should be part of any responsible study. Regrettably, this report by Professor Peter Rupert’s Economic Forecast Project totally ignores the negative economic consequences of the project.
The study injects distortions and half-truths into the public discourse for the profit of the client and not the benefit of our county or its residents. Aera and its boosters repeatedly use the deeply flawed EFP report as ammunition for their cause. And Dr. Rupert has chosen not to clarify this or to set the record straight.
Bottom line: whenever we’re told how oil company projects are good for us, consider the source. Is it based on honest scholarship and fact or just well-compensated flackery?
Seth Steiner is a member of the Advisory Committee of the San Antonio Basin Groundwater Sustainability Agency, a member of the Los Alamos Planning Advisory Committee, a founding board member of Safe Energy Now! North County, a board member of his homeowners association, and a resident of Los Alamos.