Mar 19, 2024

Kern County’s Green Transition Is A Model For Rural Communities

Kern County is not only a top carbon emitter but now also the state’s largest renewable energy producer. As it tries to become a leader in carbon removal, it faces a debate over who benefits from and who pays for this new economic model.

California is a story of booms and busts — of ongoing transitions. Disruption is Silicon Valley’s most overused word. Austrian political economist Joseph Schumpeter described the “gales of creative destruction” that California is now famous for as a “process of industrial mutation … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”

So it is that Kern County — in the heart of California’s historically agricultural Central Valley — has been riding these gales for more than a century.

This past April, Lorelei Oviatt, the longtime director of Kern County’s Planning and Natural Resources Department, which permits land use and development, laid out a vision for weathering the next gale. In a Bakersfield university gymnasium, she unveiled the plan: a globally ambitious and locally controversial “Carbon Management Business Park.”

Oviatt is central to leading the county’s next transition. She has done more to reshape the landscape of Kern County and its energy systems over the last 20 years than probably any other individual. Even the session’s moderator quipped to listeners, “unless you are a kit fox living in a hole, you know who Lorelei Oviatt is.”

The vision, Oviatt said, is to build a massive solar farm that would power machines to suck carbon dioxide from the air, concentrating it for industrial uses and long-term underground storage. The plan — which would help address the climate crisis, create jobs and generate needed tax revenue — was actually motivated by declining groundwater that was rapidly starving 500,000 acres of land of the water needed to grow the crops Kern is famous for.

As the agricultural land is forced fallow, Oviatt warned, the assessed values of those half-million acres would plunge on the county’s property tax rolls; libraries would close, county services would shut down. But an alternative path exists where Kern could become a leader in an emerging carbon management industry that’s estimated to grow to $100 billion by 2030 and $250 billion by 2050. For Kern alone “at the top end this could produce $68 million a year in county property tax revenue to the county, $25 million to surrounding cities, and 23,000 jobs,” Oviatt noted. “That is hope!”

Key for Oviatt is that the county move fast. This is of course critical to responding to climate change. The most recent report by the UN’s Intergovernmental Panel on Climate Change argues that the world will need to rapidly decarbonize power systems, transportation, buildings, materials and agriculture, and then remove roughly 10 gigatons of carbon dioxide emissions annually by 2050.

This is needed to keep the world below the tipping point of 1.5°C warming, the point climate scientists predict will take us past natural ecosystem thresholds and potentially into irreversible climatic feedback loops. This means 10,000,000,000 metric tons of carbon dioxide removed. The largest direct air capture plant in the world today is in Iceland, and it can remove 4,000 metric tons from the atmosphere per year.

For Kern, speed and scale have been key to its energy transitions — streamlining planning and permitting processes in order to unlock new technologies and welcome new industries.

The residents of Kern County, however, are divided on a few things. First, whether climate change is a top concern; second, who they think will benefit from solutions like carbon removal; and third, how fast they really want to change. The Republican House Speaker Kevin McCarthy, Kern’s representative in Congress, has worked to cut funding and slow several key aspects of federal climate policy. But county officials don’t have the luxury of political point-scoring. And whether they “believe” in the science or not, they are being forced to deal with very real impacts of climate change: increasingly frequent droughts, floods, wildfires and extreme heat events.

County officials also know that the oil is drying up — due both to depleting wells and California’s commitment to become carbon neutral by 2045. The county’s job now is to manage a transition through the decline of existing industries, the rise of new threats and a potential green industrial revolution on the other side. This is the existential challenge of governance today.

As Oviatt explained earlier this year to reporters, without new jobs and revenues from carbon removal, “Kern County will be the next Gary, Indiana.” She told me that her fear is “people will leave to Texas if the oil goes away. Then housing will go down. Then we have a Mad Max scenario.”

The environmental justice community fears a different scenario: that carbon removal will be used to keep oil and gas — a zombie industry — alive, and continuing to pollute poor, over-burdened communities long into the future. They view carbon removal as a false solution — creating both moral and health hazards. As Beverly Wright, a national environmental justice leader has argued, “In the real world, this is an experiment,” she told The Washington Post in June, “And this experiment is going to be conducted on the same communities that have suffered from the oil and gas industry.”

Almost everyone agrees that Kern faces mounting challenges, and that change is coming. But there is wide disagreement over what that path forward looks like and the speed of any transition.

It’s important to note that carbon “capture” and carbon “removal” can mean quite different things. Carbon dioxide capture primarily involves capturing emissions from the top of a power plant’s smokestack or an industrial facility. Carbon dioxide removal mainly means removing it from the atmosphere through processes like “direct air capture,” mineralization, enhanced weathering and others that can be done almost anywhere. The U.S. government is particularly interested in spurring carbon removal, and recently awarded over $17 million to three pilot projects in Kern County.

Carbon dioxide removal, like solar and wind now, has also become politicized. To many people, questions around who decides, participates and determines the trade-offs of a green transition are even more critical than simply who benefits or bears the risks. Despite the global scale of these issues, politics are still local.

Even among Californians, Kern County is not well known. The county is usually seen through glass at 75 miles per hour on a straight shot up the Interstate 5 freeway from Los Angeles to San Francisco. Bakersfield, its most well-known city, is slightly more famous now as the home to McCarthy, who plays an often remote, but critical role in whether Kern benefits or is excluded from federal funds.

Kern County can use all the help it can get. In 2021, the county had a lower labor force participation rate than the California average (58% vs. 63%), a higher unemployment rate (10% vs. 8.3%) and higher poverty rates (18.5% vs. 12.3%). Well-paying oil and gas jobs continue to decline. Agriculture jobs are seasonal and climate change has made work in the fields more dangerous. The topography of the Central Valley, combined with its dairy farms and oil operations, makes Kern County home to some of the worst air quality in the country.

Over the last century, Kern’s economy has been highly dependent on not just energy generation, but the daily price of oil. In 2008, 36% of its economic activity was connected to oil and gas extraction and mining. In 2014, following a collapse of crude oil prices, Kern saw extraction activity fall by half, leading to an 11% drop in GDP, almost as large an economic drop as the county experienced during the “Great Recession” of 2008.

With stubbornly high unemployment and poverty rates, Kern’s working poor need jobs and its unemployed need services. This won’t be achieved by simply protecting the remaining oil and gas jobs, which have mostly benefited a small pool of legacy oil and gas workers. Kern’s vision for the future is a more diverse economy, with quality entry-level positions, job ladders and skill-building that creates a more resilient economy that’s not dependent solely on oil or agriculture.

Over the last decade, Kern has transitioned — in fits and starts and through multiple economic crises — from the number one producer of oil and gas to also the number one producer of wind and solar energy in California. Kern County produces 71% of California’s crude oil and 78% of its natural gas. Despite recent declines, as of 2019, Kern is still the seventh highest oil-producing county in the United States.

At the same time, Kern has moved from producing nearly no renewable energy in the aughts, to being by far the largest producer of renewable energy in California. Kern County now hosts the largest wind farm in the U.S. and the third largest solar farm. The county, Oviatt said in April, has attracted $69 billion in private investment, which has funded 18,000 MW of renewable energy.

Economic output from electricity generation has grown steadily, more than doubling its share of Kern’s GDP from 4% in 2001 to 10% in 2021. By 2021, over 50% of the electricity generated in Kern County was from renewable sources.

While its notorious oil pumpjacks have by no means gone away, Kern’s landscape has slowly transformed to include thousands of acres of wind turbines and solar panels.

This transition has cost Kern County millions in lost revenue. California’s solar tax exemption — which incentivizes solar development by exempting solar farms from property taxes — has cost Kern nearly $20 million annually in lost taxes. Wind, on the other hand, has no such exemption and has become the number one source of county taxes, recently surpassing oil.

In many other fossil-dependent regions, renewables have been blocked or delayed. But Kern’s residents seem to generally support renewable energy, as it has helped bring economic stability during recent booms and busts of oil markets.

But this is not just a story about the lack of opposition. Kern’s story is about intentional, government-led policy guiding aggressive private sector investment in renewables. As the costs of solar, wind and batteries have decreased, Kern County has worked to incentivize additional private sector investments to scale and further drive down the costs of renewables.

Environmental activists have pressured the governor and state Legislature to hold strong on phasing out oil and gas, while local activists have continued to raise the costs of business-as-usual oil production.

Kern has overcome initial inertia and built momentum for their energy transition.

California has its own version of a “green industrial policy” that supplements the recent Inflation Reduction Act. The state has committed to remaking its power systems, transportation and buildings with the goal of net zero carbon by 2045. However, while the destination is clear, the path is contested.

Some of these battles are being fought in windowless conference rooms where bureaucrats review environmental impact assessments, which are crucial to the approval of development permits. These rooms are where many projects go to die in California. But Kern County has tried to create a more routine, and therefore stable, process for corporations to develop wind and solar power. The result? A comparatively predictable and relatively fast planning and permitting process.

Although Oviatt sells this green transition within Kern by talking about jobs, taxes and the services they pay for, she knows she also must sell it externally to attract private capital. She noted at the carbon conference in the Bakersfield gymnasium, “My number one goal in doing this interactive [carbon management] website was to send a message to Wall Street and send a message to all this green money back East. If you want to come to California, come to Kern County.”

Governments establishing market signals to incentivize and “de-risk” corporate investments is now a core strategy for energy transitions around the world. Kern’s creation of a predictable market for wind and solar follows similar strategies used in Denmark, the UK and Uruguay. The city of Los Angeles plays a cameo role here, having signed an agreement to buy Kern’s wind power, which created the certainty investors needed.

Days after the April announcement of the Carbon Management Business Park, the California Resources Corporation (a spinoff of Occidental Petroleum) announced its second major carbon dioxide storage deal in the county; it was only a couple months after yet another announcement of the creation of a carbon removal consortium, which would bring together industry, tech, academia, national labs, government, labor and community members to work on carbon removal and storage solutions.

Mac McFarland, CRC’s then-CEO gushed that “Governor Newsom has set the most ambitious targets for California of any state in the nation — and in the world — to rapidly and permanently remove carbon from the atmosphere, and California DAC [Direct Air Capture] Hubs will be essential to helping achieve the governor’s goals.” More carbon removal hubs and startups are on the way to Kern.

But of course, not all carbon capture plans are equal. Or equitable for that matter. Several people I spoke to sniped that the solar and wind power produced in Kern County should not just power the Teslas and induction stoves of Santa Monica. Transitions need to be designed to not only benefit L.A., Sacramento, or Wall Street, but also Main Street, Bakersfield and even the unpaved sidewalks of unincorporated Kern.

The “Surf Ranch” in Leemore, California, a human-made wave pool for surfing near-perfect rights, lefts and barrels year-round, is closer to the oil wells and farmland of Kern, roughly 60 miles to the south, than the actual ocean. But surfing in the desert doesn’t seem to shock anyone any more than the idea of reversing carbon flows in Kern — flipping the county from a top carbon producer to a center for carbon removal.

Kern County seems almost ideal for carbon removal and storage. Growing acreage that’s going fallow can be used to host solar farms that power direct air capture facilities that then pump carbon dioxide underground, into a geology naturally ready for 1,000-year storage.

George Peridas, an energy and carbon management expert from Lawrence Livermore National Laboratory, recently noted that California’s geology is “a gift from God that the state received.” California is estimated to have enough geologic storage for 17 billion metric tons of carbon dioxide; meanwhile, Peridas said, the state emits roughly 400 million metric tons of carbon dioxide equivalents annually. And as Peridas noted, Kern has the workforce and expertise for this exact job. “You have people who have been pulling out the carbon. They’re also going to be pretty good at putting the carbon back in.”

The Drillers, the mascot of Bakersfield High School, could take on new meaning in a carbon management economy.

Oviatt’s bosses on the county Board of Supervisors are officially nonpartisan, but they lean conservative like the county. Their focus on jobs and taxes has enabled Kern to move aggressively and build an unlikely coalition to support its goals of renewable energy, carbon removal, green hydrogen and more.

This coalition makes some community members and environmental activists nervous. While Peridas may be right that oil companies have the expertise to build pipes and pump carbon, they have also been extracting and polluting Kern for 100 years. Climate justice activists want oil companies shut down, not enhanced. They see carbon capture and sequestration, or piping and storing carbon dioxide, as just the latest risk for their communities.

Driving from the northern tip of Kern County south and then east, from Delano through Bakersfield, to Arvin, then around Tehachapi Pass to Rosamond, you get to experience the green transition in action: from acres of oil rigs; to farms bursting with carrots, potatoes, grapes, peaches and plums; to wind farms sprawling down mountainsides; to industrial-scale solar that produces the mirage of a lake glimmering across the desert.

Along the way, you also see oil pumpjacks feet away from homes, schools and farms. These are the clearest reminders of past versions of “streamlined permitting” and “environmental protections” that failed to protect low-income and communities of color.

One of the ironic outcomes of the passage of the Inflation Reduction Act, given that zero Republicans voted for it, has been the rapid growth — and billions of dollars — that have flowed to “red states” to fund renewable energy, electric vehicle batteries, green minerals and carbon removal. Red states are now seeing green.

Is this positive? Yes. Maybe. Sometimes. Some transitions are clearly being captured by incumbent actors and serving to reinforce existing power structures. Oil companies are becoming “energy companies” and making money pumping carbon emissions up and then down. Occidental Petroleum just bought a leading startup in direct air capture, a company called Carbon Engineering. Incumbent automakers are now offering up an electric Hummer — so heavy it overwhelms most carbon reductions, but an arguable transition nonetheless.

So far, most carbon capture and storage has been led by the fossil fuel industry and likely falls somewhere between a failure and outright scam, according to environmental activists. It turns out, there has been a long history of expensive carbon capture and storage (CCS) projects on fossil fuel power plants.

As Greenpeace argues: “That means that after 50 years of CCS development; after billions of dollars in subsidies; after all the hype, deceits, tax breaks and guarantees; the oil industry captures about 0.1% of annual CO2 emissions. The other 99.9% pollutes the atmosphere and heats Earth. Meanwhile, most of this captured CO2 is used to produce more oil.… Carbon capture was a scam from the beginning and remains so today.”

The Sierra Club calls carbon capture a “‘moral hazard,’ the danger that the prospect of a get-out-of-jail-free card will lessen the urgency to accomplish the most important task, which is to stop burning fossil fuels. The hazard is not theoretical.” Occidental Petroleum’s purchase of Carbon Engineering, and their statement that this will allow them to produce “net zero carbon” oil, only confirms activist suspicions.

The environmental justice movement worries further that carbon capture and storage will be done in a way that puts low-income communities at risk. For example, they cite a case in 2021 where “a pipeline carrying compressed carbon dioxide mixed with hydrogen sulfide ruptured, engulfing the small town of Satartia, Mississippi, in a green haze, leaving many residents convulsing, confused, or unconscious.”

Earlier this summer, “citing threats to the environment and public health,” more than 80 environmental justice and conservation groups urged the U.S. Environmental Protection Agency to stop carbon capture, use and storage (CCUS) project applications in California’s Central Valley.

Carbon removal through direct air capture in remote locations powered by renewable energy seeks to respond to these environmental justice and equity concerns. The U.S. Department of Energy’s investment in direct air capture pilot projects shows they believe in the need to test and learn. However, few people seem to trust the carbon removal industry.

It is becoming harder to argue that the climate crisis is not an existential threat for billions of people around the world. This should be enough to motivate urgent transformation of the systems causing climate change. First and foremost, rapidly phasing out fossil fuels. But then also, simultaneously, building a low-carbon economy based on renewable energy, long-duration energy storage, zero-carbon transportation, low-carbon materials, regenerative agriculture, etc., all with a focus on first helping the communities most impacted and vulnerable to climate disruptions.

If we take this threat seriously, it does seem like we need something akin to a “wartime mobilization” to build a new economy. But this mobilization should not subvert democratic processes. And it should include guardrails to prevent inequitable distribution of risks in the transition. California’s ban on using captured carbon for enhanced oil recovery, which Occidental does in Texas, is critical to making sure carbon removal is not used to extend the life of fossil fuels. Requiring projects to mitigate any emissions down to zero and situate them away from communities, is also key.

This is what the National Environmental Protection Act (NEPA) and the California Environmental Quality Act (CEQA), both of 1970, are meant to do — identify and then mitigate the impacts of new developments. But few people believe they are working well today. California has become something akin to what political scientist Frances Fukuyama calls a “Vetocracy,” where CEQA is regularly weaponized to block even the most sustainable of projects.

Despite Oviatt’s efforts to streamline the permitting process in Kern “without cutting corners … to accelerate these solutions,” as she explained in April, such efforts to streamline, reform and accelerate solutions are also being invoked by the fossil fuel industry, including, famously, U.S. Sen. Joe Manchin, D-West Virginia, to advance gas pipelines. The many bad versions of permitting reform and debates around how to move the green economy forward are tearing at the seams of the climate movement.

A central question in this movement revolves around how to increase meaningful local participation without paralyzing decision-making. Some national groups convened recently at a conference hosted by the Roosevelt Institute have proposed “progressive reforms” to NEPA that “strengthen, rather than cut, community engagement” and that help “build trust that could help ensure the long-term success of the renewable transition.” Their argument: better participation can actually speed and deepen transitions.

Roosevelt Institute analysts argue community engagement takes place too late in the permitting and review process, when site selection, designs and funding are already in place. “At that point, it is very difficult for communities to influence the shape of a project within the NEPA process, and they must often resort to litigation or organizing,” they wrote.

The analysts recommend reforms like starting community engagement much earlier in the process; making the comment system more accessible to community members; allowing the community to review potential projects, select the ones it wants and oppose harmful ones; considering the cumulative impacts of projects; and building in a feedback and learning process after a project has been launched. This final step is key for adjusting as projects play out on the ground.

The science now tells us that we will almost certainly need to build and scale carbon removal systems around the world, while also decarbonizing as fast as possible. The world needs both. Unfortunately, many of the early carbon capture systems were deeply flawed and used to protect carbon emitters.

We now also know that there are bad versions of solar, wind and electric vehicles. A key job for governance is to parse good from bad. And to decipher more quickly which is which. This is one of our core carbon dilemmas.

We will need to sunset industries. And we will need to rapidly grow others. This will necessitate improving decisions about what to block and what to build. It also requires learning from our mistakes. In almost every case we will have to contend with powerful incumbent actors fighting to protect their interests and to delay change.

Kern County is a living case of both the theory and the difficult politics of these dilemmas. And Kern shows why equity matters so much in these transitions. Incumbent actors will work to slow and capture transitions, and some will undoubtedly use carbon capture to extend the life of oil and gas in other states. At the same time, environmental groups will work to block carbon removal (and in some cases solar and wind power) if these systems put local communities at risk.

And if it is true, as Oviatt asserts, that carbon removal can be as much about jobs and taxes as fighting global warming, then these jobs, taxes and services need to benefit local communities.

With so many ways to block a fledgling program’s success in California, transitions need support. This means new broad-based coalitions, where participants have a real say in decisions and share in the risks and benefits. Strong local governments will need to partner with community activists to nurture new technologies and then support the small number of corporations willing to invest in scaling and driving down their costs.

The nonprofit Carbon180 has argued recently that carbon removal could be both environmentally and socially beneficial if it designs in core principles around procedural justice or fair decision-making; distributive justice, or equitable allocation of project risks, benefits and impacts; and reparative justice, which involves acknowledging and addressing past harms.

If we have any hope of achieving rapid and equitable transitions, we will need to start early, plan carefully, prioritize environmental justice principles, and test and learn quickly. We will need to move quickly, but we will also need to design in feedback loops and intentional adjustments.

Academics sometimes call this “experimental governance” or “adaptive management.” Stakeholders closest to problems come together to develop solutions, test, learn and then iterate until they get the balance right or need to adjust again.

There is unfortunately no guaranteed path to ensure Kern County benefits fully from the next carbon economy. But a commitment to collective experimentation and learning at the pace of innovation will be necessary for governing through the gale.

With thanks to Stephen Stack, a graduate student at the University of California, Berkeley, who worked with me on data analysis and visualization.

Carbon ValleyEnergy TransitionsState-led MarketsThe Carbon TransitionCarbon DilemmasPermitting ReformGoverning Transitions