In 2009, the Milken Institute issued a report on the impact California’s oil and gas industry had on California. The report stated the statewide impact was immense with a ripple effect of over 300,000 jobs and a $46 billion impact on the state’s economy. Now comes a second study from the Institute of Applied Economics of the Los Angeles County Economic Development Corporation, which looked at the effect proposed cutbacks of gasoline to reach newly proposed emission reduction goals would have on the economy. This study showed jobs are at risk and consumer costs on many products will rise.
“I’m amazed how many products include ingredients derived from petroleum,” said California Manufacturers & Technology Association President, Dorothy Rothrock in a statement. “California manufacturers depend on the petroleum industry to keep their operations up and running here. The study shows that regulations that reduce petroleum supplies make our manufacturers less competitive and threaten high wage, middle class jobs.”
Besides the potential for lost jobs, the cost of products that use petroleum would increase. Numerous products are petroleum based including diapers, band-aids, vitamins, solvents polyester, shoes and many more. Beyond products, industries as varied as agriculture and hospitals rely on refinery products.
Both businesses and consumers will see increased cost rise if the dramatic reduction program takes effect.
It should be noted that the new study from LACEDC was funded by the Western States Petroleum Association. The Milken study was funded by Chevron. More importantly, it should be noted that the gas and oil industry are essential to California’s economy and increasing regulations would probably cost jobs, add to consumer costs and slow economic growth.
Read the full report here.