According to a recent report, the average state tax revenue from oil and gas production is about $34 billion annually. One study predicts that to fall by two-thirds by 2050 if the U.S. sticks to its decarbonization plans.
“Oil and gas money is so embedded in many local budgets, it’s difficult to imagine a future without it,” a recent New York Times article said.
States and municipalities utilize oil and gas revenue to fund everything from infrastructure to schools and even parks. Oil-rich states such as California and Texas must look to other funding avenues as oil and gas revenue decreases and clean energy initiatives increase.
The job landscape is changing too. According to The New York Times, oil and gas has been one of the few industries in California’s Kern County where workers can find good-paying jobs that don’t require college degrees. The average salary in Kern County is $80,000.
To make the transition from oil and gas reliance to clean energy easier, the NY Times article states that California Gov. Gavin Newsom has “proposed $65 million to support and retrain displaced oil and gas workers, $200 million to clean up abandoned wells and $450 million to help communities diversify their economies.”
“A lot of oil companies have already stated that they support a greener economy,” said Danny Gomez, managing director of financial and emerging markets at FreightWaves. “They have a large tie to jobs and the environment. A lot of [oil companies] have taken advantage of the fact that we haven’t had the ability to regulate clean air. In taking the initiative to do better, they also need to look at the community that has been there for them during their evolution [as a company]. This is their chance to take initiative and bring people along.”