New study paints rosy economic picture for oil exploration in San Benito County

A new study says that in a ‘high end’ estimate over the next 30 years, oil well production in San Benito County could add $4.3 billion to the county economy in the form of jobs and commerce. That would essentially double the total county industry output over that time.

It’s no secret that a battle is being waged this election year in San Benito County over the future of oil well production. This new study from Applied Development Economics was commissioned by the San Benito County Farm Bureau, a supporter of the ‘No on Measure J’ effort in the county. The measure seeks to ban the controversial practice of hydraulic fracturing in San Benito County, but supporters of Measure J say the measure does allow for conventional oil well drilling on farm and ranch lands and not residential areas.

The ADE study looked at 3 scenarios with a low, mid and high production of oil exploration and production by two firms in the county, Patriot Resources and Citadel Exploration.

In the ‘high’ production scenario, the study assumed large scale production and projects $4.3 billion in market value for oil well production in a best case scenario. This estimated market value would result in 14,700 direct jobs at the oil well sites, with a total of 22,551 after accounting for the multiplier effects.

The high production scenario essentially doubles the county’s total industry output.

The San Benito County economy currently supports just over 20,000 jobs and about $3.7 billion in total industry output according to the study.

The reality of this scenario playing out is not without significant infrastructure and social challenges for the county according to ADE. Also, any market disruptions could derail this scenario.

A midlevel scenario in the study paints a more conservative $214 million dollar market value and 732 jobs over the 30 year growth of the oil exploration and production in the county by the two firms.

ADE’s methodology used the annual production volumes, market value per barrel, number of wells, and capital expenditure comparison in the three scenarios and they play an important role in determining the analysis for the overall tax revenues and employment and labor income in the County.

Andy Hsia-Coron with the Coalition to Protect San Benito County has told News Channel Five, “Our County depends 100 percent on ground water at this point. And if that gets contaminated or too much of it is used, than the things that really do support our county–agriculture, tourism will all be put at risk.”

But the “No on Measure J” supporters say Measure J is about fear mongering. Kristina Chavez says fracking is not planned for San Benito County, “People fear what they don’t know and what they don’t understand. And the fact is hydraulic fracturing is not being used here, it’s not planned here and it’s not being proposed here.”