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Santa Barbara County oil pipeline shutdown could mean years of economic losses

If you’ve taken a drive along the 101 through Santa Barbara or San Luis Obispo counties or spent any time on the Central Coast, you know oil is a way of life here. Oil operations have coexisted with our beaches and rolling hills for more than 100 years, and the industry has employed generations of workers. (Full disclosure: I have done work for energy industries along the Central Coast.)

This is perhaps why the pipeline rupture that occurred earlier this year was both devastating and a testament to the unity of our communities.

Although wildlife and the environment were impacted, response crews and volunteers who cleaned the beach and ocean were a model of how these types of disasters should be handled by first responders and volunteers.

By the hundreds, volunteers combed the beaches, cleaning up debris and helping animals. Supplies to aid in the recovery were donated from every corner of California.

The El Capitan and Refugio state beaches, which were most heavily impacted by the spill, reopened just over one month later. As a testament to the diligence of cleanup crews, most people didn’t even know the beach had ever been closed, according to Eric Hjelstrom, the California State Parks sector superintendent.

The pipeline from which the spill occurred, and several others associated with the pipeline, were obviously shut down. While all pipelines have since been repaired, official estimates say it will take 18 months to five years for all pipelines come back online.

Although these repairs and replacements should be thorough, meeting all state and federal regulations as well as the requirements set forth by the Pipeline and Hazardous Materials Safety Administration, they should be as expedited as much as possible. The number of communities affected by the closure is larger than most realize.

The network of pipelines associated with the spill carries crude all over the Central Coast from Santa Barbara, San Luis Obispo and Kern counties to locations around the state. While the environmental impact was quickly responded to and addressed, the economic disaster to local communities from the closure of the pipeline is just beginning to be felt.

Normally, the oil industry provides millions of dollars in tax revenue to counties along the Central Coast. With this halt in production, however, the tax revenue for our counties will be severely impacted.

At the recent Santa Maria Valley economic summit, UCSB economics professor and California Forecast economist Mark Schniepp projected significant losses for Santa Barbara County as a result of the pipeline shutdown.

An estimated $74 million in tax revenue will be lost over the next three years — including $37 million in property tax, $32 million in worker income and $5 million in federal royalties, according to Schniepp.

Santa Barbara public schools will be some of the hardest hit by the loss of revenue. He estimated around $24.1 million lost that otherwise would have been garnered in property tax revenue. County fire services will be impacted, too, with about $4.6 million in funding lost.

It’s common sense that mitigating the pipeline closure will be vital to reducing its impact.

With the best-case scenario sitting at 18 months before full pipeline operations resume, if we cannot approve a temporary alternative to keep energy producers operating at full capacity, approximately 1,500 head-of-household jobs in San Luis Obispo and Santa Barbara counties could be affected.

And considering that the energy industry provides roughly $3 million in tax revenue to San Luis Obispo County, a significant portion could be in jeopardy.

This revenue cannot come from other sources. It is irrelevant how you rearrange the budget. A portion of the county’s property tax revenue is earmarked for public schools, and if this funding isn’t there, the schools will take a cut.

The reopening of the pipeline should be as streamlined as possible. That means any work on Santa Barbara County’s end should be prioritized and expedited. They must realize that the economic impacts stretch far beyond their own county’s borders.

Should the reopening not move forward swiftly, it’s simply common sense that we must find safe, temporary alternatives to deliver this natural resource and protect jobs and funding for our schools and fire services.

The people of the Central Coast rallied and responded the initial disaster.

We must now take action to prevent an economic disaster to our communities.

John Allan Peschong served in President Ronald Reagan’s administration and as a senior strategist for the campaigns of President George W. Bush. He is a founding partner of Meridian Pacific Inc., a public relations and affairs company, and serves as chairman of the San Luis Obispo County Republican Party. His column appears twice a month in The Tribune, in rotation with liberal columnist Tom Fulks.