Mar. 13—Economists say the recent jump in fuel prices, if sustained, may lead to big changes in Kern County, but they disagree on how much that might hurt or eventually help the local economy.
The conventional view is that higher transportation costs will raise the cost of many goods and that to cover their gasoline bill consumers will have to cut back elsewhere, as happened on a large scale when gasoline spiked between 2007 and 2014.
But things have since changed to a degree, with more people working remotely and greater use of delivery services. There's hope that could cushion the impact of higher gas prices on people's budgets.
Another question is what elevated oil prices will mean to Kern job creation and county tax revenues. Prior to the big plunge in barrel prices in mid-2014, strength in the local oil industry helped the county recover from the Great Recession faster than many other regions.
This time, though, tighter state regulation has crimped California oil production, leaving mostly foreign imports to cover the widening gap between in-state supply and demand. Whether Kern oilfields will be allowed to respond may become a key question for the county's economic future.
Mark Evans, professor emeritus of economics at Cal State Bakersfield, said in an email he expects higher barrel prices to increase Kern oilfield valuations, leading to greater county revenues to support local services.
He said by email the situation exposes Gov. Gavin Newsom's "feel-good, smoke-and-mirrors policy of substituting imports for local production."
Evans predicted the overall effect of high fuel prices on Kern County will depend greatly on politics, and whether the state's gradually declining production can be timed to cover California's transition to green energy while also continuing to supply West Coast manufacturing.
In the meantime, expect lower household income, relative to inflation, especially for households with high energy use, he added.
"World events will continue for some time to dig a noticeable hole in the pocketbooks of Californians," Evans wrote.
Southern California economist Christopher Thornberg takes a somewhat different view in two respects.
First, he said people can avoid the gas pump more easily than they could before because of the greater use of e-commerce and meal delivery services. He noted people now have the option to buy vehicles that are more fuel-efficient.
"I'm absolutely just astonished in our inability to move beyond this assertion that somehow the gasoline prices are somehow an enormous driver of the health of the national economy," Thornberg said. "And all in all, this is great for Bakersfield."