KERN Journal Business
Vol. 3, No. 3
Kern is nation’s energy capital
Navy glow stick everyday device
The Energy and Mining Issue
he petroleum industry is a major employer and leading economic driver in California and Kern County, according to a report recently released by the Western States Petroleum Association. Researchers found that the petroleum industry was responsible for 468,000 jobs in 2012, or 2.3 percent of California’s employment, and more than $220 billion in direct economic activity, contributing 5.4 percent of California’s state GDP. The report comes on the heels of a U.S. Energy Information Administration announcement that the U.S. net imports of energy, measured in terms of energy content, declined in 2013 to their lowest level in more than two decades. Increased domestic oil and natural gas production displaced imports. And the growth of “alternative,” or renewable energy sources also helped reduce U.S. dependence on foreign oil. Kern County is the state’s energy capital. Although the oil industry dominates the local energy landscape, wind, solar, biomass, hydroelectric, stored energy and geothermal are also driving the local economy. The June issue of the Kern Business Journal showcases all the ways Kern County is working to make the U.S. energy independent. — Kern Business Journal
Understand your risk to protect your heart.
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Photo courtesy of Martin Varga
Kern County sits atop the Monterey Shale formation, which is estimated to hold more oil than all other shale formations produced in the U.S. Page 4.
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The City of Bakersfield’s building inspection department has led the way in creating nationwide industry standards and safety rules for the installation of rooftop solar systems. Page 26
Rio Tinto Minerals’ borax mine and mill in Boron is Kern County’s largest mine and California’s largest open pit mine. It employs more than 700 people. Page 36 Westbound train traffic along the already congested Tehachapi corridor and into the valley is expected to spike with the construction of two oil terminals in Bakersfield. Page 8
KERN BUSINESS JOURNAL
eing able to have trust in my bank’s leadership has given me a strong sense of security.”
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June / July 2014
June / July 2014
Journal KERN Business Showcasing Kern County business and industry Vol. 3, No.3 June/July 2014 Kern Business Journal is published by The Bakersfield Californian. Copies of the bi-monthly journal are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Senior Vice President Revenue and Marketing John Wells Editor Dianne Hardisty Art Director Glenn Hammett To submit a story firstname.lastname@example.org To advertise email@example.com Mira Patel 661-395-7586 To subscribe 661-392-5777
KERN BUSINESS JOURNAL
Energy, mining creating economic boom
nergy fuels Kern County’s economy. While the oil industry has long been the area’s major economic driver, some “newcomers” now are helping make Kern County the nation’s energy capital. If you name an energy source, Kern County seems to have it. “Kern County has been the center of California’s energy production since 1899, when oil was discovered in the Kern River Oil Field,” Kern County Planning and Community Development director writes in the June issue of the Kern Business Journal. “Today with over 8000 MW of permitted renewable energy, in addiDianne Hardisty tion to producing about 80 percent of the state’s oil, Kern County continues to provide electricity, fuel and job creation for California.” Ashley Richmond, director of siting policy for the California Wind Energy Association, notes “Kern County has played an especially significant role in contributing to the advancement of the wind energy industry and achievement of the state’s renewable energy and greenhouse gas reduction goals. The Tehachapi Pass currently hosts 3,134 mega-
Californian file photo
Alta Wind Energy Center on the Tehachapi Pass, is the largest wind energy facility in the world.
watts of installed capacity, including the largest wind energy facility in the world, the Alta Wind Energy Center.” But it’s not just the big energy companies that are helping push Kern County to the
Business at-a-glance Photo Courtesy of NBBJ
The U.S. Courthouse in downtown Bakersfield has received a 2014 GSA Design Award. The following companies were U.S. Courthouse in recognized for their work on the Bakersfield recognized U.S. Courthouse in downtown for ‘design excellence’ Bakersfield: NBBJ, Gilbane Building Company, Hinman Consulting EnThe U.S. Courthouse in Bagineers, IBE Consulting Engineers, kersfield is one of 20 buildings MIA Lehrer + Associates, Psomas nationwide to be named a 2014 Inc., Smith Electric, TB Penick and GSA Design Award winner. The Sons, Thom Electric, Thornton U.S. General Services AdministraTomasetti, Tower Glass, and Wavetion (GSA) and its private-sector guide Consulting. The courthouse partners bestow the awards as the opened in September 2012. hallmark of the agency’s Design — U.S. General Services AdminExcellence program. istration The awards are given every two years to honor the accomplishments of federal employees, China Lake innovation architects, engineers, landscape saves time, money architects, urban designers, interior The Maverick Missile team at designers, artists, conservationNaval Air Warfare Center Weapons ists, and preservationists who Division China Lake teamed with create and preserve the nation’s Naval Air Systems Command to crelandmarks. More than 80 projects ate two new processes to preserve competed in this award cycle.
the Maverick Air-to-Ground Missile 65-E and save money by keeping it operational in the fleet. Scientists and engineers with the Weapons Division have re-engineered the seeker dome grey-seal repair procedures and the dome cover for Maverick to save the Navy time and money when the missile is in need of repair. Until now, decommissioning the missile, repairing the seal and returning it to the fleet could take up to three years. The Weapons Division developed a technique for sailors to inspect and repair the seal in the fleet, allowing for the missile to return active after it hardens in just a few days. — U.S. Navy
forefront of energy development. According to California Solar Statistics, Bakersfield is one of the state’s top four “solar cities” in terms of total distributed solar-power generating capacity. This achievement is credited to area residents and businesses investing in rooftop solar systems. The June issue showcases the many ways Kern County is increasing domestic energy resources and helping make the nation a bit more independent of foreign energy suppliers. And the looming increase in oil production as companies drill into the Monterey Shale formation, which runs under Kern County, has landed the area on the top of numerous economic charts. But oil production is not the only “mining” industry booming in Kern County. According to the U.S. Geological Survey’s preliminary data for 2012, the market value of non-fuel mineral production for California was $3.27 billion, with much of this activity centered in Kern County. The June issue showcases many of Kern County’s mining operations, including Rio Tinto Minerals’ open pit mine in Boron, which provides one-third of the world’s borates, and the soon-to-open Golden Queen gold mine in Mojave. Dianne Hardisty is the editor of the Kern Business Journal.
John Guinn named Roll Global vice president John Guinn, who retired April 2 after serving for 31 years as the city manager of Shafter, has been named a vice president of Roll Global, a $3 billion Los Angeles-based private corporation that functions as a holding company for Stewart and Lynda Resnick. The company’s holdings include such agricultural giants as Paramount Farms, POM Wonderful, and the Wonderful brands of John Guinn almonds and Halos, as well as Fiji Water, Teleflora, Justin and Landmark Wines, and Suterra pest control. A registered engineer, Guinn will focus on the company’s industrial projects, which include the Paramount Logistics Park in Shafter, and the Crossroads and North Meadows projects in Bakersfield. — Kern Business Journal
Governor Brown signs pro-aerospace bill Photo courtesy of the U.S. Navy
The Maverick Missile team at Naval Air Warfare Center Weapons Division China Lake has developed a money-saving system.
California’s burgeoning private space industry is being supported by a bill Gov. Jerry Brown signed this spring providing tax incentives. Assembly Bill 777, authored by Assemblyman Al Muratsuchi, D-Torrance, provides a 10-year property tax break to private space
Photo courtesy of the U.S. Navy
Sir Richard Branson reaches for the sky with test flights at Mojave Air and Space Port. firms, such as Virgin Galactic, XCOR Aerospace and Masten Space Systems, each of which have facilities at Mojave Air and Space Port, located 60 miles east of Bakersfield. Several Southern California firms, such as Hawthorne-based SpaceX and Boeing’s California operations, are also expected to benefit from the measure. The bill comes on the heels of AB 2243, the Spaceflight Liability and Immunity Act. Signed by Brown in September 2012 — against the wishes of trial lawyers — the law provides liability protections for companies in the state, should any spaceflight participant who has acknowledged the risks be injured during spaceflight activities. Stu Witt, general manager of the space port in Mojave, which boasts 17 space companies and 19 test sites, said passage of the two bills shows California is serious about supporting and retaining private space industries throughout the state. — The Bakersfield Californian
KERN BUSINESS JOURNAL
June / July 2014
Oil and Gas Energy
Coaxing oil, gas from Monterey Shale is ‘tricky job’ By Janice Gillespie
been producing them in Kern County for over 100 years. he silica-rich mudstones However, not all of the oil escaped from (shales) of the Monterey Forthe Monterey into the sandstones. Many scimation are the source of most entists believe there is more oil remaining in of the oil produced in the San the Monterey than the amount that migrated Joaquin Valley. These rocks out. Unfortunately, the Monterey is not a formed about 10 million years ago when very good reservoir rock. clay and dead plankton settled slowly onto Our conventional reservoirs are very the stagnant, oxygen-poor deep ocean permeable and fluids flow through them easbottom. This was mainly diatoms, or tiny ily, like water through sand. The Monterey is organisms that lived inside a shell made made of very small clay-sized particles. Its of silica. permeability is less than that of concrete and The layers of mud and dead plankton fluids cannot flow through it easily unless eventually built up to a thickness of well it is “fractured.” Therefore it is called an over 1,000 feet in some areas of the valley. “unconventional” reservoir. As they were buried, the heat and pressure Nature fractured the Monterey in the increased; literally cooking the tiny diatoms past to release the oil and continues to do into oil and gas, in much the same way as so today; however this is a slow process cooking raw hamburger releases a slick of and does not release the oil as rapidly as we grease on a pan. burn through it. So, we assist the process by As the oil and gas heated and expanded, fracking the shale. the pressure cracked the Monterey into a Unlike many other shale reservoirs in the network of tiny fractures releasing the oil and U.S., the Monterey is extremely thick—thougas into deep sandstone salt water-filled aqui- sands of feet in some places. It also consists fers. This process continues today. The oil of hundreds of thin layers of many different migrated to the top of the aquifers and waited types of rock—chert, diatomite, limestone, for geologists to find it. These oil fields are dolomite, mudstone, siltstone. In comparicalled “conventional” oil fields and we have son, the producing zone of the Bakken Shale of North Dakota is usually less than 100 feet thick and is formed primarily of a dense limestone. The variety of rock types in the Monterey is a bit bewildering. Some of the layers will fracture more easily than others, causing the fracture to bypass other rock layers in the Monterey. Think of the difference between fracturing a glass plate and a layer of Play-Doh. The layers that concentrate the fractures may not be the layers that contain the most oil. As a result, some of the layers containing oil will be bypassed by the fractures. It has been hard to determine exactly which part of the Monterey will be the best oil producer and, once that is determined, to develop the ability to focus the fractures on just those layers. California is also very tectonically active. This has caused the Monterey ForPhoto courtesy of Ed Kreiser mation to be tightly folded, Oil is being produced near Bakersfield. faulted and fractured so that
Monterey and Santos shale oil
Technically recoverable reserves: 15.4 billion barrels, which is 78 times California's total 2011 oil production, enough to supply the state for about 21 years at the current rate of oil refining
The nation’s largest shale oil play, or extension of existing production activity, is actually a combination of two shale formations: the Lower Sacramento Monterey and the Santos. Average depth: 11,250 feet San Francisco Together they are estimated (more than 2 miles) to contain more than three Average thickness of times as much recoverable productive shale: 1,875 feet Lower oil as the second-largest Monterey shale formation in the United States, the Bakken, which underlies much of North Bakersfield Dakota and Montana. Last year, activity in the Monterey/Santos was Los Angeles Source: U.S. Energy estimated to cover 1,752 Information Shale Administration, square miles in the San California Division of production Santos Joaquin and Los Angeles Oil, Gas and areas basins. Geothermal Resource JOHN COX and KENT KUEHL / THE CALIFORNIAN
its properties are different from one area to the next. Western North Dakota, home of the Bakken Shale, has been little affected by tectonics and there is very little faulting and folding. Therefore, the properties of the Bakken Shale are more uniform and predictable than those in the Monterey Shale. There are significant differences between the Monterey and the Bakken shales, including tectonics, variety of rock types and thick-
nesses. That makes the Monterey a much more difficult target for oil production. However, the vast potential size of the resource base in the Monterey Shale dwarfs that of the Bakken. If we come to understand how to deal with the Monterey, the potential rewards may be that much sweeter. Dr. Janice Gillespie is a geology professor at California State University, Bakersfield.
June / July 2014
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
June / July 2014
State names top regulator over local oilfields
geologist with experience overseeing underground injection work in Bakersfield oilfields has been appointed Kern County’s top oil regulator. Dan Wermiel, 61, is the third man since 2011 to lead the district that produces more than 70 percent of the state’s oil. Oil industry representatives applauded announcement that Wermiel has been appointed district deputy of the state Division of Oil, Gas and Geothermal Resources’s District 4, which consists mostly of Kern County. “Our focus is getting permits, and I think it takes an experienced person. He’s an experienced person, so we feel confident there will be continuity there,” said Rock Zierman, CEO of the California Independent Petroleum Association. The district deputy position has been vacant since Burt Ellison left the job in late October. Ellison took over after his predecessor, Randy Adams, was put on paid suspenDan Wermiel sion in April 2011 and ordered back to work three months later. The reason for Adams’ suspension was never disclosed publicly, and he left the division in October 2011. Ellison, who called Wermiel a good motivator and geologist, and “an extremely nice man,” noted the critical nature of the position and the importance of the Bakersfield district office. Ellison now works as a senior geologist for Bakersfield oil producer E&B Natural Resources Management Corp. Before talking over the District 4 post, Wermiel served as DOGGR’s technical program manager, a supervisorial position covering numerous duties, including engineering and research, administrative services, monitoring and compliance with state laws, and underground injection work such as waste disposal. After graduating from the University of Miami, Wermiel earned a master’s degree in geology at Arizona State University. He worked in oil and gas exploration and development in Colorado, before going to work in 1986 as a petroleum geologist at the Oregon Department of Geology and Mineral Industries. In 2009, he joined DOGGR as a field engineer in the Sacramento District. He moved to Bakersfield to manage District 4’s underground injection program in 2011, before returning to Sacramento to work in the division’s headquarters. — The Bakersfield Californian
Photo courtesy of Martin Varga
Oil is being pumped in a field near Allen Road, west of Bakersfield.
Kern revising zoning ordinance to address oil concerns By Lorelei Oviatt
ern County has been the center of California’s energy production since 1899, when oil was discovered in the Kern River Oil Field. Today with over 8000 MW of permitted renewable energy, in addition to producing nearly 80 percent of the state’s oil, Kern County continues to provide electricity, fuel and job creation for California. But California’s reputation for being a special place to live, work and play has also created a difficult place for business development. The oil business is no exception. And recent national stories about hydraulic fracturing in Pennsylvania, Ohio and North Dakota have raised concerns by Sacramento legislators and coastal communities about the practices used here. While the practice of well stimulation (hydraulic fracturing) at 10,000 feet has been used for over 60 years in the Kern County oilfields, questions now being raised need to be answered to reassure a concerned community and interested surface owners. Kern County has a recognized track record of being able to streamline permitting for a wide range of industries, including agriculture, wind and solar PV, and industrial complexes, such as the Tejon Commerce Center. But the county permitting process
also maintains thoughtful consideration of environmental protection. As a result, representatives of the oil and gas industry and the State of California asked that a partnership be formed to find solutions that would address concerns, and help avoid wasteful and delaying litigation. In January 2013, the Kern County Board of Supervisors directed the Planning and Community Development Department to work with state agencies and the oil industry to find a way to streamline oilfield permitting and associated review, as required by the California Environmental Quality Act (CEQA) in Kern County. Staff began discussions with industry representatives, including Western States Petroleum Association, California Independent Petroleum Association, Independent Oil Producers Association, and representatives of individual oil companies. The State Division of Oil, Gas & Geothermal Resources (DOGGR) also was included in the discussions to develop a program to amend the county’s zoning ordinance and prepare a project level environmental impact report. Kern County served as the lead agency. Based on the discussions and commitment of funding from the industry, the Board of Supervisors in April 2013 directed staff to begin the comprehensive project level review of the entire valley portion of Kern County for oil exploration and extraction activities.
The review will result in amendments to Chapter 19.98 Oil and Gas Production of the Kern County Zoning Ordinance to address requirements for environmental protection and surface impacts. County staff is working with DOGGR to provide a CEQA document that can also be used in well permitting by state regulatory agencies and other agencies, as needed. In July 2013, workshops were conducted for the Notice of Preparation for the Environmental Impact Report. Work is now ongoing for the necessary studies and preparation of the Draft EIR, which is expected to be released for public review by the end of the year. It will then be considered by the Kern County Planning Commission and Board of Supervisors in the first quarter of 2015. A full, transparent and constructive dialogue with the public, the industry and interested outside groups will provide a streamlined permitting process that will ensure reasonable environmental protection, while ensuring economic growth in energy production and exploration will continue over the next 30 years. Streamlining permitting, while protecting our important natural resources and quality of life, is possible in California. We are doing it here in Kern County. Lorelei Oviatt is the director of Kern County’s Planning and Community Development Department.
June / July 2014
KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
June / July 2014
Congestion, safety, concerns riding oil trains
n the wake of recent catastrophic oil train derailments and explosions, the U.S. Department of Transportation issued an emergency order in May requiring railroads hauling large amounts of Bakken crude oil to notify states’ emergency response commissions. The order applies to trains that carry more than 1 million gallons of Bakken crude, which is the equivalent of about 35 tank cars. Typically, oil trains pull 100 or more oil cars. Railroads are required to disclose the number of trains each week, specific routes and the counties that will be crossed. In addition, federal transportation officials are recommending that oil shippers stop using older cars to transport the heavy crude. They are recommending the use of “the highest level of integrity in their fleet when transporting Bakken crude oil.” Bakken crude oil already is arriving by rail car in Kern County. But proposals for two oil terminals in Bakersfield are expected to vastly increase the volume and the number of trains. In addition to causing safety concerns, the proposals have transportation officials eyeing the already congested east-west rail lines over the Tehachapi Mountains. A scaled back Tehachapi Rail Improvement Project will increase the amount of “double tracking” along the Union Pacific Railroad tracks, which are shared by Burlington Northern Santa Fe. But the capacity along the line will remain stretched. The two proposed rail terminals in Bakersfield would offload 220,000 barrels per day of oil from North Dakota and other midcontinent oil producers, and then redirect most of that into pipelines leading to refineries in the Bay Area and Los Angeles County. With the Tehachapi Pass rail corridor now experiencing congestion and delays, state officials have classified the rail upgrade as “critical.” — Kern Business Journal
Californian file photo
Oil being produced from shale fields in North Dakota is arriving in Bakersfield by train. Two oil terminals planned for Bakersfield are expected to increase the train traffic.
Bakersfield set to become rail-to-pipeline ‘oil hub’
pair of rail terminals planned near Bakersfield may soon give Kern County a central role in California’s shift from heavy reliance on foreign oil to greater use of domestic sources. Separate projects by Plains All American Pipeline LP and Alon USA Energy Inc. would offload a combined 220,000 barrels per day — providing 13 percent of the state’s current oil consumption, compared with the less than 1 percent California now gets by rail — and redirect most of that into pipelines leading to Los Angeles County and Bay Area refineries. Industry observers say the plans would create California’s first train-to-pipeline facilities and among the West Coast’s largest terminals for receiving crude by rail. California and Bakersfield have been bringing in crude by train from North Dakota and mid-continent oil producers for the past several years. That pace would greatly increase if Plains and Alon get plan approval. The Bakersfield area is considered a good location for rail-to-pipeline terminals. It has an existing oil infrastructure. And getting permits to begin construction is seen as easier here than in large, densely populated cities that are less accustomed to the energy business. The rail projects would help address a bottleneck that, starting in 2011, created an unprecedented price disparity between Kern’s heavy oil producers and the nation’s lighter benchmark, West Texas Intermediate. The logistical problem developed when
oil produced by hydraulic fracturing, or “fracking,” in North Dakota’s Bakken Shale formation created a bonanza that overwhelmed the Midwest’s pipeline network. The resulting glut lowered prices in the midcontinent, but not on the West Coast. The Bakersfield projects would be unique on the West Coast in that they would accept oil shipments by rail for processing nearby, as well as for transfer to pipelines for delivery to refineries far away. Shipping crude through pipelines is considerably cheaper, and less polluting, than sending it by rail. But no pipelines connect California with oil fields east of the Rockies. One such pipeline idea was floated by Kinder Morgan, a Houston-based pipeline company. But the company announced in last year that it was “shelving” the project because West Coast refineries “weren’t interested enough.” Observers attributed the lack of interest to rail terminals’ relatively low price tag, their short construction time and the flexibility they give refiners to bring in oil by rail from almost anywhere in the country. That could prove useful in coming years as Canada prepares to increase its oil exports and additional drilling is done in shale formations in Colorado, New Mexico, Utah and elsewhere. Kern County officials are evaluating the environmental impacts of Dallas-based Alon’s proposal to build a 150,000-barrel-aday, double-loop rail terminal at its Rosedale Highway plant in northwest Bakersfield that would handle an average of two “unit trains”
per day, each more than a mile long. The company says it would refine about half the incoming oil, about 3 million gallons a day, on site, then store and ship the rest through existing, on-site pipeline access points to refineries in Northern and Southern California. Lorelei Oviatt, director of the Kern County Planning and Community Development Department, said she expects the project to be considered by the Board of Supervisors in August. The precise development plan for the site must to amended to accommodate the proposed terminal. The terminal would be accompanied by a plant reconfiguration so it can return to processing oil. Since Alon bought it in 2010, the plant has refined only byproduct trucked and hauled by train from its sister facilities in southern L.A. County. The Bakersfield refinery has been idled for about a year. Kern County’s Planning and Community Development Department is preparing an environmental review of the project. Alon’s CEO told analysts in November that he hopes to receive full approval and have the terminal built in 2015. Houston-based Plains bought its project south of Bakersfield late last year from U.S. Development Group, a Pasadena rail facility builder. Though designed to transfer 140,000 barrels a day to refineries in L.A. County, it would initially take only half that amount, or one unit train. The project is under construction. — Excerpted from The Bakersfield Californian and the Kern Business Journal
June / July 2014
KERN BUSINESS JOURNAL
Study: Petroleum industry drives state’s economy By Tupper Hull
he petroleum industry is a major employer and leading economic driver in California, according to the recently released findings of an economic study produced by the Los Angeles County Economic Development Corp. “Oil and Gas in California: The industry and its Economic Contribution in 2012,” which was released by the Western States Petroleum Association, details the industry’s sizable economic and fiscal impacts on California’s economy. Researchers found that the petroleum industry was responsible for 468,000 jobs in 2012, or 2.3 percent of California’s employment, and more than $220 billion in direct economic activity, contributing 5.4 percent of California’s state GDP. Additionally, the petroleum industry makes significant fiscal contributions to California’s state and local governments, with more than $21.6 billion in state and local tax revenues and $14.7 billion in sales and excise taxes. Its total economic value is larger than 17 U.S. state’s economies. “The men and women of the petroleum industry have always been extremely proud of the role they play in California as energy providers,” said WSPA President Catherine Reheis-Boyd. “This study shows just how central of a role the industry plays in California’s statewide and local economies. “I know I speak for the hundreds of thousands of
Californians working in and around the petroleum industry when I say our pride also comes with a commitment to continue driving California’s economic recovery and energy future.” The LAEDC’s analysis also highlighted the industry’s impact on regional economies throughout California, including valuable tax revenues in all counties. “The oil and gas industry supports 104,000 jobs in Los Angeles County alone,” said Christine Cooper of the LAEDC, “and its activities here generate more than $5 billion in state and local tax revenues.” “California’s oil and gas industry has been an engine of California¹s growth for more than 100 years,” stated Allan Zaremberg, president and CEO of the California Chamber of Commerce. “The industry sustains tens of thousands of well-paid, middle class jobs, provides billions of tax dollars for the support of state and local government, and provides the energy and much of the innovation that powers our economy. “Our state’s manufacturing community depends on a robust and efficient energy industry,” said California Manufacturers & Technology Association President Jack Stewart. “The state’s 1.2 million manufacturing employees salute the petroleum sector and its workers for being such an important cog in California’s economy.” The entire study can be downloaded at www.wspa.org. Tupper Hull is the vice president of strategic communications for Western States Petroleum Association.
Direct Activity of Oil and Gas Industry Kern County 2012 Employment 211 213111 213112
32411 324191 32511 333132 4247 447 45431 486
Labor Income ($ millions) Oil and gas extraction Drilling oil and gas wells Support activities for oil and gas operations Natural gas distribution Oil and gas pipeline construction Petroleum refineries Petroleum lubricating oil and grease mfg Petrochemical manufacturing Oil and gas field machinery and eqmt mfg Petroleum and petroleum prods wholesalers Gasoline stations Fuel dealers Pipeline transportation
TOTAL DIRECT ACTIVITY Source: Los Angeles
County Economic Development Corporation
2,427 104 363
187.5 1.6 309.9
KERN BUSINESS JOURNAL
Bakersfield firm making oil chemicals ‘green’
TS Stimulation Services Inc. has gone “green” with the introduction of a hydrochloric acid replacement (Oil Safe AR) that biodegrades in 10 days or less. Oil Safe AR is approved by the U.S. Environmental Protection Agency as a “designed for the environment” product. For 30 years, Bakersfield-based MTS has offered traditional chemicals for oilfield production, disposal and injection wells, well maintenance, and hydrogen sulfide removal. The company recently introduced alternative products to be “environmentally responsible and conscious about the world in which we live,” explained Monda Byrd, MTS’s vice president. Other green products offered by MTS include mutual solvents, iron sequestering agents, corrosion inhibitors, surfactants, cleaners, demulsifiers, caustic and a replacement for xylene. “All of these products carry a triple zero hazardous rating score and are non-regulated by DOT,” Byrd said. “You can handle these products with your bare hands.” Since introducing the chemicals last year, MTS has successfully used them on more than 100 wells. MTS is in the process of developing and testing a mud acid replacement product. Although the product the company now provides will safely contain hydrogen and fluoride fumes, Byrd said MTS is working “to develop a completely 100 percent safe, sustainable, green mud acid replacement product.” Other innovations introduced by MTS include: A treater-truck service, which allows green-product batch treatments to assist with routine scale and paraffin removal maintenance projects. Frequent maintenance, which includes keeping well bore and rod pumps free of deposits, prolong the life of pumps, maintain consistent production, and lengthen durations between rig work and acid jobs. Technology and products to address hydrogen sulfide problems. The company’s modified towers, along with a liquid scavenger, will remove 1.5 to 1.7 pounds of hydrogen sulfide from natural gas, depending on the scrubber modifications and scrubber configurations. By-products generated by this process can be disposed of on-site in water injection wells. — MTS Stimulation Services Inc.
June / July 2014
Oil camp ‘native’ helping West Kern Oil Museum By Dennis McCall
aft’s most popular tourist attraction is scheduled for some major improvement projects, thanks, in part, to help from a man who grew up in an oil camp outside town. Directors and volunteers of the West Kern Oil Museum have begun sprucing up the buildings, grounds and exhibits, and are rolling out a plan for major improvements that include new structures and exhibits and getting their signature 106-foot-tall wooden derrick operating. “We are prioritizing a list of projects and improvements to the museum, both long-term and short-term,” said Rick Woodson, chairman of the board of directors. “None of these projects would be possible without the continued support and donations from our members and many others throughout the community.” Don Maxwell, director of the museum’s corps of volunteers, is excited about the coming improvements. “It’s been a long time coming,” he said. “We’re finally getting everything lined up. It’s not on paper, but our goal is to get it all done by next Oildorado,” referring to the town’s once-every-fiveyear, two-week birthday bash known as Taft Oildorado Days. The next one is 18 months away. Providing a needed financial boost is a man who grew up on an oil camp in nearby Fellows and attended local schools through Taft College. G. Barton Heuler and his family are providing both short- and long-term financial assistance to jump-start the expansion program and provide ongoing support. “Dr. Heuler and his wife, Margaret, have become involved both financially and with ideas to ensure the financial stability of the museum and to see projects come to fruition,” Woodson said. “We are extremely grateful for their generosity and for their many suggestions.” Heuler began his professional life as a dentist before turning his interest to farming and investing. He is serving as an adviser to the museum board of directors in developing a business plan that includes attracting partners from the oil industry. The museum gets most of its operating revenue from its members, an annual yard sale, donations and gift shop sales. Major projects on the drawing board include construction of an 80-by-200foot building to showcase the museum’s
Photo courtesy of the West Kern Oil Museum
Students view the 106-foot-tall wooden derrick at the West Kern Oil Museum in Taft.
fleet of antique autos, trucks and vintage equipment, building pole barns to protect outdoor equipment displays, and adding a perimeter wall anchored by an appealing entryway. Also underway is refurbishing of the museum’s 1937 ladder fire truck, restoring a 1919 Model T pickup truck and erecting a 1950s era Bender drilling rig. Volunteers already have embarked on a list of smaller projects that include interior and exterior painting, replacing ceiling tiles, patching roofs, upgrad-
ing signage, replacing the cooler in the kitchen (known as the Cookhouse), leveling walkways, graveling roadways and upgrading public restrooms. The museum is open free to the public Thursday through Saturday from 10 a.m. to 4 p.m. and on Sundays from 1 p.m. to 4 p.m. It is located at the intersection of Highway 33 and Wood Street. Look for the big wooden derrick. Dennis McCall is a volunteer with the West Kern Oil Museum.
June / July 2014
KERN BUSINESS JOURNAL
Taft College strengthens energy industry partnerships By Sheri Horn Bunk
ocated in the heart of the Midland-Sunset Oil Field, Taft College is continuing to strengthen its partnerships with the energy industry, particularly in the petroleum and natural gas sector. In 2010, the college launched its Energy Technology program, developing a strong advisory committee to help plan curriculum. This advisory group, made up of oil producers and related industry providers, has been instrumental in guiding the college in establishing a strong internship program, as well as expanding its energy technology certificate options. Students can choose from five certificates within the program, each designed to lead to employment in the dynamic and growing energy industry. As part of the college’s overall strategy for student success, Dr. Dena Maloney, president/ superintendent of the West Kern Community College District, has sought ways to raise the college’s profile within the industry and keep the college’s mission in the minds of donors, students and the community. As an example, the College Foundation struck “oil” with its West Kern Petroleum Summit, which was held last October. The summit brought together national and regional petroleum leaders with government officials, academic leaders and industry trail-
blazers. Held at Taft College, the summit’s goal was to ignite a dialogue to better prepare and train the future workforce. The summit exceeded all expectations. The college’s goal now is to host a summit every two years. In the intervening months, we are offering the West Kern Petroleum Roundtable program, which will keep the momentum going and strengthen Taft College’s connection to the industry. The first West Kern Petroleum Roundtable was held on March 20, with guest speaker Omar Garcia, president of the South Texas Energy and Economic Roundtable (STEER). Garcia facilitates communication, education and public advocacy surrounding the production of energy resources in south Texas. An experienced industry leader, Garcia is an expert on business opportunities associated with the Eagle Ford Shale, which he indicates is transforming the south Texas economy. The roundtable is a local sounding board to further conversations about how to best align academic preparation with industry needs and standards. One key focus is how Taft College can align its Energy Technology and Engineering programs with the industry’s current needs. The March 20 Roundtable included an overview of the college’s new engineering program, which is articulated with the engineering program at California State University, Bakersfield, and includes guest speakers
Taft College is continuing to strengthen its partnerships with the energy industry, particularly in the petroleum and natural gas sector.
from industry, field trips, and potentially job shadowing/internship opportunities for students. Additionally, the college’s existing Energy Technology program is based on state-of-theart equipment that mirrors industry standards, and incorporates applied learning experiences through internships, field observations and guided career counseling. “The topic of the Monterey Shale was
discussed at the 2013 summit and sparked a lot of interest from the audience,” said Maloney. “The roundtable on March 20 provided an additional forum for conversation about the direction of local industry and the career opportunities for students with advanced education beyond the high school level. Whether a student chooses a two-year associate degree or certificate, or goes on to transfer to a four year institution, we want to be sure our curriculum will prepare students for their future.” The next roundtable will be held on Nov. 17, and will feature a presentation by Jim Tague, senior vice president of finance and corporate planning at E&B Natural Resources. The roundtable will focus on global resources impacting local economic development. The Taft College Foundation Petroleum Partners group also provides support for the college’s curriculum, programs and overall commitment to workforce development for the oil and energy industry. By joining the Petroleum Partners, companies help support the college’s investment in industry events designed around energy topics and workforce training. Sheri Horn Bunk is the executive director of the Taft College Foundation. For more information about the Petroleum Partners Program or the upcoming roundtable, contact Sheri Horn Bunk at shorn-bunk@ taftcollege.edu or (661) 763.7936.
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KERN BUSINESS JOURNAL
Recycling group opens plant in Bakersfield Bakersfield city, Kern County and state officials in April heralded the official opening of a $12 million recycling plant designed to keep up to 4 million pounds of recyclables a year out of the county’s Bena Landfill. The largely automated 50,000-square-foot facility, on South Mount Vernon Avenue in southeast Bakersfield, is a joint venture by five trash haulers — Price Disposal, Varner & Son Inc./Lamont Sanitation, Howard’s Garbage, Superior Sanitation, and Varner Brothers Inc. — working together as Metropolitan Recycling LLC. The separator will isolate up to 20 tons of commercial and residential recyclables an hour — much collected from blue recyclable carts in metropolitan Bakersfield, from single-family homes on city and county land. As often as every 2 1/2 minutes, a series of green-and-yellow machines sifts, crushes, shatters and binds six different types of recyclables into bales weighing between 600 and 1,800 pounds. That’s four times as many recyclables as could previously be sorted — an increase aimed at diverting 75 percent of all recyclables from landfills by 2020.
— The Bakersfield Californian
June / July 2014
Companies should help media do its job By Larry Pickett
ave you ever thought of helping the news media do its job? Whether you are a company, government organization, or a non-profit, you can do just that and at the same time have a greater chance of getting your story out. Below are 10 recommendations to help achieve what could be a dual benefit. • Be clear on your media strategy. What do you want to achieve with news coverage? Greater visibility; distribution of service and product information; attract new customers; public outreach? Pinpoint information or activities that have real news value for you, the media and — ultimately — your target audiences. • Develop, maintain and update your facts and figures. This should include preparing fact sheets, background information, and question and answers about your organization. Such information is especially critical during crises situations. In a crisis, the news media will want fast and accurate information. When you are dealing with a crisis and related stress, you will have little time to put information together that should be available on such venues as your company’s website
and in hard copy “handouts.” Consider using social media applications. Target audiences, as well as the news media, are increasingly turning to Twitter and Facebook for information. In Larry Pickett addition, you should be monitoring social media to determine what is being said about your organization and quickly respond with the right information or to correct misinformation. • Focus on media outlets. These outlets often connect to your target audiences. Find out what those audiences read, watch or listen to. Hopefully, this is driving your advertising strategies. It should do the same for your news media strategies. • Complement your publicity efforts with your advertising. While your advertising may be informative, graphically appealing and even humorous, many in your audience will consider publicity, especially third party articles about your organization, to be much more credible. • Build relationships with the news media. This can build your company’s reputation as a credible news source. Know how reporters want to receive information -emails, social media, phone calls, or faxes.
Respond to media inquiries. Reporters are always working on deadline. If you say you will call them back, call them back. • Schedule “news worthy” media events. Interviews, tours and news conferences can benefit your company if they are justified from a news standpoint. They can provide opportunities for you to distribute information and for the news media to ask questions. • Never say “no comment.” It has become conventional wisdom that if an organization utters those words they are probably hiding something. An energetic reporter will get information they want from somewhere (i.e. so-called eye witnesses) and it may not be the type of information that accurately frames the story. • Avoid asking that something be considered “off the record.” If you do not want something you say to be on the record, don’t say it. • Never lie to the news media. Enough said. • Measure your news coverage. Evaluate your news coverage in terms of “story pickup” with the hope that the resulting coverage achieves for the media the same goals that you have established. Larry Pickett is a public relations consultant in Bakersfield.
June / July 2014
KERN BUSINESS JOURNAL
Valley Air District watching increased oil production By Janelle Schneider
ith recent discoveries relating to the Monterey Shale formation, there may be a significant increase in oil production, along with associated hydraulic fracturing activities in the valley. The Valley Air District will be maintaining a strong presence in new regulatory and industry efforts associated with increased oil production activities, and in efforts to mitigate potential air quality impacts. While hydraulic fracturing, or “fracking,” has received the bulk of the public’s attention, fracking is only a small part of the expected expansion in oil production in the coming years. From an air quality perspective, growth in oil drilling, extraction, handling and transportation all have the potential to result in increased emissions. The district has initiated discussions with government agencies, the Western States Petroleum Association and other entities about mitigating the impacts of these increased activities through implementing one or more Voluntary Emissions Reduction Agreements (VERAs). VERAs are agreements between the district and another party that requires payment of mitigation fees that are then used by the district to fund air pollution reduction projects to offset a project’s air quality impacts, on a pound-for-pound basis. The district has a successful track record of managing such agreements, investing the funds through its award-winning grants program to replace old, highly polluting tractors, trucks, school buses, irrigation pumps or other equipment with new, cleaner versions. The district then tracks the emissions and the use of the new equipment, and reports on the success of the mitigation efforts. Industry representatives have expressed strong interest in partnering with the district to implement the VERA concept. Not only are VERAs feasible mitigation measures that address obligations under the California Environmental Protection Act (CEQA), but they also allow the industry to demonstrate its sense of stewardship and responsibility to the valley’s residents. Fracking has been the subject of considerable public concern. However, it has been occurring in oil production operations of the south valley for at least three decades, with about 500 wells hydraulically fractured per year, without known negative environmental impacts. In California, fracking is principally a means of ensuring that individual, conventional wells attain maximum production and, according to the California Department. of Conservation’s Division of Oil, Gas and Geothermal Resources (DOGGR), it is often a preferable alternative to drilling additional wells to produce the same resources. However, widely reported environmental problems with fracking associated with natural gas production on the East Coast and in the Midwest continue to grab the public’s attention. Water contamination has been the most vocal public concern, but a number of other environmental concerns have been raised, including potential climate change and air quality impacts. While these other potential environmental impacts may deserve attention, the district’s focus has been on air quality impacts and potential emission sources of various pollutants, including diesel engine emissions associated with oil well drilling and fracturing operations; storage and handling of fluids used in the fracking process; and fugitive dust emissions from sand handling, travel on unpaved roads and work areas. Although fracking fluids contain small amounts of chemicals, some of which are known volatile organic compounds and air toxic compounds, they make up less than 1 percent of the fluids used in hydraulic fracturing, with water and sand comprising more than 99 percent of the total materials injected. Until recently, there were no specific regulations in California pertaining to the process of hydraulically fracturing wells. But at the urging of DOGGR, Senate Bill 4 — Oil and Gas Well Stimulation — was signed into law in September 2013. SB4 required DOGGR to establish interim regulations by Jan. 1 of this year and study the en-
Greater Bakersfield Chamber of Commerce June 2, 9, 16, 23, 30 – Strictly Business – Chamber’s live business broadcast from 10 to 11 a.m. on Bakersfield. com. June 6, 20, 27 – Government Review Council, 7:30 to 8:30 a.m., Greater Bakersfield Chamber of Commerce, 1725 Eye St. June 12 – Small Business Networking Breakfast --“How to do Business with Union Cemetery and Price Disposal;” check-in and networking 7:30 a.m.; program and breakfast 8 a.m. to 9:30 a.m.; $25 for members, $50 for nonmembers; Greater Bakersfield Chamber of Commerce. June 13 – Chamber Palooza – One Night of Pure Fun! Fundraiser and mega mixer, with food, auction, music and networking; 6 to 10 p.m.; Kern County Museum, 3801 Chester Ave.; tickets $45. June 20 – Leadership Bakersfield Graduation; 6:30 p.m.; Stockdale Country Club; $45 per person. June 25 – Leadership Bakersfield applications due. To download the application visit www.bakersfieldchamber.org. July 7, 14, 21, 28 – Strictly Business – Chamber’s live business broadcast from 10 to 11 a.m. on Bakersfield.com. July 11, 18, 25 – Government Review Council; 7:30 to 8:30 a.m.; Greater Bakersfield Chamber of Commerce.
The San Joaquin Valley Air Pollution Control District will be working with oil producers as they drill into the Monterey Shale.
vironmental impacts of well stimulation, including air quality impacts. The bill also required final regulations be approved by Jan 1, 2015. The district agrees that fracking regulations would be most effectively developed by DOGGR on a statewide basis, and believes that redundant regulations are examples of bad government. The district is committed to working cooperatively with DOGGR, the oil production industry and other interested parties to provide technical support during studies of fracking’s air quality impacts. We will strongly advocate that DOGGR’s new regulations provide the appropriate protection of air quality and, only where warranted and necessary, step in and develop appropriate and necessary regulations. Janelle Schneider is a public information representative for the San Joaquin Valley Air Pollution Control District.
July 10 – Labor and Employment Law Update; check-in and networking 7:30 a.m.; forum 8 to 10 a.m.; cost is free for Chamber members, $40 for nonmembers; complimentary light breakfast will be provided; Greater Bakersfield Chamber of Commerce. July 15 – State of the City Luncheon; check-in and networking 11:30 a.m.; luncheon and program noon to 1:30 p.m.; Bakersfield Marriott at the Convention Center, 801 Truxtun Ave.; $40 Chamber Members; $75 non-members. Please visit www.bakersfieldchamber.org or call (661) 327-4421 for more information, or to register for any of these events.
KERN BUSINESS JOURNAL
June / July 2014
Biomass, Alternative Energy
Navy’s Weapons Division focuses on renewable energy By Margo Allen
cientists and engineers at the Naval Air Warfare Center Weapons Division produce and develop products in renewable energy technologies, including renewable fuels and composites, energy storage and remote power generation. “Due to the continued investment in research and engineering, NAWCWD remains on the forefront of alternative energy technology development that not only benefits the environment, but provides a distinct advantage to our warfighters,” said Mallory Boyd, deputy director of the research and engineering directorate. Boyd also noted the research is providing “some very interesting and relevant work for our civilian workforce.” According to Boyd, Weapons Division innovation is encouraged by its unique work environment, which gives civilian scientists and engineers the ability to work with military operators, test squadrons and rapid prototyping facilities on expansive land and sea test ranges at both China Lake and Point Mugu. The Weapons Division’s biofuel patents enable the processing of readily available bio-n-butanol into a number of chemicals that can serve as jet and diesel fuels, lubricants and basic components of industrial chemical processes. Additionally, the Weapons Division has engineered renewable high density fuels that have energy densities up to 20 percent higher than conventional military jet fuels. These fuels have the potential to improve the performance of military jets, ground vehicles, missiles and unmanned air systems. Geothermal power plants typically
U.S. Navy photo
The Naval Air Warfare Center Weapons Division in eastern Kern County has developed a chemical process that converts the CO2 emitted from its geothermal power plant into military and commercial jet and diesel fuels.
emit considerable amounts of waste carbon dioxide (CO2). The Weapons Division has a patent-pending chemical process that converts CO2 waste into certified military and commercial jet and diesel fuels that can be produced and consumed locally. It is estimated that enough CO2 is released each year at the Naval Air Weapons Station China Lake geothermal plant to generate 9 million gallons of jet fuel. According to Boyd, the Weapons Division’s range operations currently rely on diesel generators that are expensive to fuel and maintain. A partnership with industry has been formed to develop generators
Delano wood-burning plant can power 45,000 homes
t’s hard to miss Covanta Energy’s 50 megawatt renewable power plant, which is located on the east side of Highway 99, near Delano. Just off Pond Road are the plant’s mountains of wood waste that await being turned into energy. In operation since 1990, the plant produces enough renewable energy to power more than 45,000 homes for a year, according to Matt Barnes, Covanta’s client business manager. The biomass feedstocks used at the plant to produce electricity include wood residues from local sources, such as orchard removals and prunings, shells
and hulls from nut crops, and a variety of urban wood sources, including material from right-of-way clearings and non-recyclable pallets. The City of Bakersfield is a primary fuel supplier. “The air pollution control technology used by the plant reduces emissions by as much as 95 percent, compared to open field burning,” explained Barnes. “This is why the San Joaquin Air Pollution Control District certifies the plant as a ‘clean unit’ and a stationary, sustainable ‘solution to pollution’ in the valley.” With 50 full-time employees, the company estimates its annual payroll exceed $5 million. The plant’s fuel sup-
that provide continuous clean power from sunlight. The NAWCWD Xstorra generator uses conventional photo-voltaic technology, an electrolyzer and a high pressure hydrogen fuel cell to generate 5 kW of continuous power. “A cooperative research and development agreement with Planetary Power Inc. was established to collaborate on the SUNSparq, a portable solar thermal generator that generates 6.5 kW of power and stores energy in a compact li-ion battery array. The SUNSparq and Xstorra provide potential alternatives for forward-deployed forces reliant on diesel generators to fulfill power requirements,”
ply chain accounts for more than 100 indirect jobs. Combined with the plant’s annual property and sales taxes, which exceed $500,000, Barnes estimates Covanta contributes more than $20 million annually to the local economy. Covanta Energy is a subsidiary of Covanta Holding Corp., an owner and operator of large-scale, energy-fromwaste and renewable energy projects, including eight biomass facilities. In 2007, AES Corp. of Arlington, Va., sold two of its wood-burning power plants – the 50-megawatt Delano facility and a 25-megawatt plant in Mendota – to Covanta Holding Corp. of Fairfield, N.J., for $51 million. At the time, Covanta operated 31 waste-to-energy power plants, including one at Crows Landing in Stanislaus County. — Kern Business Journal
said Marc Stockbaur, alternative energy lead in the research and engineering directorate. Basic and applied energy research at NAWCWD is focused on the development of super-capacitors, as well as flexible and super lightweight photo-voltaic cells. Supercapacitors provide higher power densities than traditional batteries, while photo-voltaic devices offer alternatives in aviation and other high altitude energy applications. Advances in these areas are related to the Weapon Division’s expertise and innovation in electrochemistry and nano-material, polymer and micro-fabrication technologies. The Naval Air Warfare Weapons Division at China Lake is a part of California’s i-HUB for Defense, Energy, and Aerospace (iDEA), creating an opportunity for Weapons Division scientists and engineers to partner with other government organizations, small businesses and academic associations aimed at advancing renewable energy technologies. The purpose is to provide collaboration and knowledge sharing across industry and academic partners as they advance technology, allowing joint development and early-stage testing of technologies with NAWCWD technical experts. According to Boyd, active participation in the iDEA hub will allow the Weapons Division to expand academic and industry partnerships working toward renewable energy solutions that will advance capabilities. The Weapons Division plans to use available internal, public, and private funding to pursue cooperative research that leverages current expertise with that of industrial and academic knowledge, Boyd said. Margo Allen works in the public affairs office at the Naval Air Warfare Weapons Division at China Lake in eastern Kern County.
Photo courtesy of Covanta Energy
Covanta Energy’s 50 megawatt power plant near Delano produces enough renewable energy to power more than 45,000 homes for a year.
June / July 2014
KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
June / July 2014
Homeless shelter gets energy efficient upgrades By Tracy Correa
he Mission at Kern County houses 300 to 400 people a night and provides 200,000 meals a year to those who have nowhere else to turn to for help. So, it should come as no surprise that utility costs — with nine buildings occupied by employees and shelter residents 24/7 — can get pretty expensive. “There’s just a lot of power being used,” said Carlos Baldovinos, executive director of The Mission. When Baldovinos and The Mission’s board of directors started looking at ways to cut the shelter’s overall expenses, they zeroed in on utility costs. “As a nonprofit organization, we knew we had to look at this,” he said, noting that it is one of the larger budget items. This set off a series of calls to PG&E for assistance. In short order, PG&E’s Robert Flores, a customer relationship manager in Bakersfield, and contractor Staples Energy showed up at the shelter to help. “I was on a mission for the mission,” said Flores, who headed an energy audit of the buildings. The result is thousands of dollars of energy efficiency upgrades that are certain to save the shelter money in utility costs for years to come. The work is all made possible through PG&E’s Local Government Partnership program, funded by California utility customers and administered by PG&E and participating agencies through the California Public Utilities Commission. The goal is to make homes and businesses more energy efficient because it benefits everyone. “This is one of the great ways to help those that don’t have a lot of funding,” said PG&E’s Dave Christensen, Bakersfield-based senior program manager for local government partnerships.
Photo courtesy of Pacific Gas & Electric Co.
Pacific Gas & Electric Co. helped The Mission with retrofits that reduced power use.
Among some of the changes: Staples Energy, working with PG&E, installed new overhead lighting in a 5,000-square-foot building that serves as the main sleeping area. The old metal halide lights were dusty and about 20
years old and required the use of a lift to remove. They were replaced with new fluorescent T-5 lights that cast a brighter light and use far less energy. Across the campus in the administrative building, Randy Godkin, facilities director at The Mission, watched as Staples technicians replaced lighting in the upstairs conference room, where important decisions are made for the benefit of residents. Even with all the lights turned on, the room had always been dim before, said Godkin. Now, 13-watt CFL (compact fluorescent light) reflector bulbs – equivalent to 50-watt bulbs – brighten the room and will cost much less to operate. The beverage machines also are now more energy efficient. The lighted machines have been equipped with a device called a Vending Miser. The device powers down the machine, while maintaining a cool temperature, when the surrounding area is vacant for a period of time. It is similar to a motion sensor. And outdoors, there is new energy-efficient and brighter lighting that makes the shelter safer at night. “I’m very surprised,” said Baldovinos about how all the upgrades came together in a few weeks. He called the project a perfect gift. In some instances, businesses may have to pay a co-payment for the upgrades. However, in The Mission’s case, everyone worked together to ensure the organization didn’t have to come up with any out of pocket costs. “It’s a great feeling to help a nonprofit that wouldn’t be able to pay for the changes on its own… especially in these tough economic times,” said Christensen. Baldovinos couldn’t agree more. “As a nonprofit, we rely on the generosity of others,” he said. “And any money we can save goes right back into our programs so that we can serve more people.” Tracy Correa is a writer for P.G.&E.’s Currents. This article originally appeared on www.pgecurrents.com.
Mt. Poso Cogeneration converts from coal to wood
ntil about a year ago, nearly 2 million pounds a day of agricultural waste and urban tree trimmings would go up in smoke or get trucked to a landfill, and nobody really benefited from it. Not anymore. Now it fuels a power plant north of Bakersfield that generates enough electricity to power 30,000 homes -- and it helps produce steam that doubles production in nearby oil fields. The 38-employee Mt. Poso Cogeneration Co. LLC underwent a roughly $50 million, 15-month conversion from being coal-fired to running only on wood pulp from Central Valley farms and urban sources as far away as Los Angeles. Air regulators say biomass plants emit roughly the same total amount of pollution as coal. But they say plants that run on wood pulp are much more beneficial because they spew less sulphur oxide and certain other pollutants, and the carbon they release into the air is captured in plant growth Biomass plants also help California
meet its renewable energy goals. Mt. Poso has a 15-year contract with Pacific Gas and Electric Co., which like other investor-owned utilities is under regulatory orders to secure a third of its power from renewable sources by 2020. Despite their emissions, biomass plants are considered better than wind turbines and solar plants in one way: They can provide juice to the grid 24 hours a day. The tricky part is finding enough feedstock. Covanta Delano, a larger biomass plant in Delano that does not produce steam for oil production, competes with Mt. Poso for sources of wood pulp. “You can’t just open the gate up and hope (truckloads of biomass) come,” said David Mittelstadt, who as Mt. Poso’s manager of resource recovery has to make sure feedstock deliveries arrive consistently year-round. This year, Mt. Poso signed an exclusive contract with the County of Kern to take all its tree trimmings. It also accepts biomass from Tulare County and other sources. In another innovative recycling twist,
The Bakersfield Californian
Stuart Welch, environmental health and safety manager, gives a tour of Mt. Poso Cogeneration Co.
the water Mt. Poso uses for steam and other purposes comes from nearby oil fields, noted Don Macpherson, president and CEO of Macpherson Oil, California’s eighth largest oil producer. The Santa Monica-based company is a 50-50 partner on the plant with Ann Arbor, Mich.-based DTE Energy Services. “We’re quite proud of this plant,” Macpherson said during a tour of the facility
last fall. The plant was built 25 years ago near Famoso Road. About 39 percent of the recent conversion from coal-firing was paid for by the New Markets Tax Credit program, established in 2000 to encourage equity investment in poor communities. A version of this article appeared in The Bakersfield Californian.
June / July 2014
KERN BUSINESS JOURNAL
• Located about 7 miles west of Bakersfield, near the western Kern County town of Tupman. • An integrated gasification combined cycle power plant that plans to manufacture hydrogen to generate 300 megawatts of electricity and to produce low-carbon nitrogenbased products, such as fertilizer. • A gasification technology would be used to convert coal and petroleum coke to produce hydrogen. The hydrogenrich syngas fuel would be used to generate electricity and produce urea in liquid and pellet form, and other products for agricultural and manufacturing uses. • The proposed plant would capture about 90 percent of the carbon dioxide produced from the gasification process and transport it for use at the adjacent Elk Hills oil field for enhanced oil recovery and sequestration.
Proposed Hydrogen Energy California project
for dealing with a hazardous emergency at the proposed N PG&E Midway plant. Vi Substation sta ni aA 33 Nancy L. Ewert, senior W qu 58 edu ct engineering manager of Kern’s St Buttonwillow ora 5 ge 58 Waste Management DepartDi st STOCKDALE HWY ric t ment, said HECA would ADOHR RD 43 produce 857 tons of waste per Tule Elk Proposed Reserve day -- double the amount now State Park project site er Riv n created in the county’s entire Tupman er Elk Hills Oil Field unincorporated area. CO2 injection Meanwhile, she said, PG&E/ location Detail So Cal Gas Bakersfield California regulators are presarea 119 2 MILES suring the county to reduce the Kern County amount of waste Kern already THE CALIFORNIAN Source: Hydrogen Energy California (HECA) diverts to landfills. Meeting the state’s goal with HECA up and operating, she said, would Supervisor David Couch and County Planning be “physically and mathematiDirector Lorelei Oviatt said there have not been cally impossible to do.” enough measures incorporated into the plan A similar version of this update article by that would lessen the project’s potential negative staff writer John Cox appeared in The Bakersimpacts. Among these would be contingencies field Californian. Brackish Water Source
7TH STANDARD RD
Source: Excerpted from information provided by Hydrogen Energy California (HECA) and the California Energy Commission.
Hydrogen Energy California clean coal project proposed for construction near Tupman is expected to create jobs, boost tax revenue and provide a test of carbon-burying technology that would help local oil production. But first the project must obtain state approval and secure millions of dollars in federal Energy Department start-up help. The proposal has been delayed by economics and by years-long opposition from nearby property owners, as well as concerns from county officials over potential impacts on air quality, the dangers of stored chemicals and the volume of waste expected to be generated at the plant. With the California Energy Commission serving as the lead agency, federal, state and county officials are reviewing plans for the $4 billion Hydrogen Energy California plant, which will produce chemicals and power. The proponent, Massachusetts-based SCS Energy LLC, is responding to agencies’ questions and concerns as the proposal makes its way through the permitting process. Documents, including CEC staff reports, company updates and correspondence can be found at www.energy. ca.gov. Click on “Power Plants,” where an alphabetical listing of pending projects can be found. HECA, as the project is known, would turn coal and petroleum coke into fertilizer and, during times of peak demand, electricity for sale to the state’s power grid. Some 90 percent of the carbon dioxide generated is proposed to be buried in nearby oil fields, helping oil production, since it would make the petroleum less viscous. The federal government has pledged $408 million in subsidies to an approved project, largely because it represents a novel and relatively clean use of the nation’s coal. The economic benefits would be substantial: more than 2,400 construction jobs, some 200 permanent jobs and an estimated $52 million a year in annual labor income from direct, indirect and induced employment. But as the project moves through the approval process, environmentalists have raised concerns about its impacts on public health and safety. They worry that its emissions would worsen the region’s already poor air quality. Opponents also question the safety of storing anhydrous ammonia at the site, contending a chemical mishap might endanger nearby residents. Project supporters, which include the Kern Economic Development Corp., note the positive impact HECA will have on the region’s economy, including the creation of jobs. Richard Chapman, president and CEO of the Kern Economic Development Corp., noted that his agency’s mission is to support enterprises that attract capital investment to the county, create jobs and increase tax revenue -- and the HECA project “hits it out of the ballpark in all three metrics.” But at a public hearing last fall, Kern County
• With the California Energy Commission serving as the lead agency, federal, state and county regulators are reviewing the proposal and requesting additional information from the company to address concerns about potential impacts on air quality, emergency response, and waste generation.
HECA power plant proposal draws praise, criticism
• The Hydrogen Energy California Project (HECA) originally was proposed in 2008 by Hydrogen Energy International LLC. In 2011, SCS Energy California LLC acquired 100 percent ownership of HECA, redesigned some aspects of the project and submitted an amended application for certification in May 2012.
June / July 2014
KERN BUSINESS JOURNAL
June / July 2014
KERN BUSINESS JOURNAL
Demonstration projects pave way to energy storage
n a move being watched by utility companies and the clean technology industry, California last fall adopted the nation’s first energy storage mandate. The California Public Utilities Commission adopted a ground-breaking mandate that requires the state’s major utility companies – PG&E, Southern California Edison and San Diego Gas & Electric -- to expand their capacity to store electricity, including renewable energy generated from solar and wind. Collectively, the three investor-owned utility companies must buy 1.3 gigawatts of energy storage capacity by the end of 2020. That is roughly the energy needed to supply 1 million homes. California’s earlier-adopted energy initiative requires utilities to acquire 33 percent of their electricity from renewable sources, such as wind and solar, by the year 2020. The storage mandate will stabilize the ebbs and flows of this power generation. At peak times, energy will be “storage” for use when it is not being generated. Several storage methods can be used, including pumped storage, such as what PG&E has been doing for decades, as it moves water between hydroelectric dams that are located at different elevations in the Sierra Nevada Mountains; flywheel energy storage, which creates a kinetic battery when a rotor is accelerated at high speeds; and stationary batteries, such as lithium-ion and sodium-sulfur batteries. Industry observers believe the California mandate will speed storage research, which has so far been sluggish. Kern County, where utility-size solar plants and wind energy projects feed the state’s electricity grid, is home to storage demonstration projects. One is Southern California Edison’s Tehachapi Wind Energy Storage Project. “The intermittent, or variable, nature of most renewable resources creates a challenge for Southern California Edison’s (SCE) grid operators who must continuously and instantaneously manage both supply and
demand for electricity,” a company spokesman explain. “SCE’s Tehachapi Wind Energy Storage Project (TSP) is a demonstration project aimed at determining how cuttingedge technologies can improve the integration of renewable energy sources. “Its purpose is to demonstrate to what degree lithium-ion battery and smart inverter technologies can improve grid performance and assist in the integration of variable energy resources. These technologies have the potential, in a way, to help ‘smooth out’ the electricity production of renewable resources, and in turn, help grid operators to better manage the electric grid.” With its Tehachapi project, SCE will evaluate a wider range of applications for lithium-ion batteries, which may spur broader demand for the technology. TSP is funded by SCE and federal stimulus funding awarded by the American Recovery and Reinvestment Act of 2009. The project, based at the company’s Monolith Substation in Tehachapi, is located within the Tehachapi Wind Resource Area. Another demonstration project underway near Tehachapi is Advanced Rail Energy Storage’s combination of century-old railroad technology with green-style innovation. The Santa Barbara-based company has begun running a specially designed locomotive up and down quarter-scale railroad tracks in a project that uses gravity, instead of rechargeable batteries, to store energy. The concept is for a train powered by wind turbines and photovoltaic solar plants to pull heavy loads up a hill. When an electric utility gives the signal that it needs power, the train will be released to roll back down the hill, generating a steady supply of electricity, much the way a hybrid electric car recharges its batteries. Key measures of ARES’ success will be how quickly its design responds to demand and how much energy is lost in the process. If successful, the system could make renewable energy more reliable and less prone to spikes in output. — Kern Business Journal
Photo courtesy of ARES
A demonstration project underway near Tehachapi is Advanced Rail Energy Storage’s combination of century-old railroad technology with green-style innovation.
KERN BUSINESS JOURNAL
June / July 2014
Crimson’s Bakersfield biodiesel plant expands
rimson Renewable Energy LP of Denver has been awarded a $5 million grant from the California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program to expand its bio–refinery in Bakersfield. The California Energy Commission’s award is designed to provide funding for the development of commercial–scale biofuels production facilities that can sustainably produce at least 15 million gallons per year of low carbon transportation fuels. “As the landmark Low Carbon Fuel Standard continues to foster the adoption of lower carbon, more environmentallyfriendly alternative fuels, such as biodiesel, at California’s major fuel terminals, we have sought to expand our production of ultra-low carbon renewable transportation fuel to meet that demand,” said Harry Simpson, president of Crimson Renewable Energy, in a company news release. “The funding and vote of confidence provided by the California Energy Commission will facilitate more rapid expansion of plant capacity at Crimson’s Bakersfield biodiesel plant – dramatically increasing production of ultra–low carbon biodiesel and enhancing the company’s sustainability.” Crimson has completed portions of its engineering and design work, and is in the
Photo courtesy of Crimson Renewable Energy
Crimson Renewable Energy LP of Denver has been awarded a $5 million grant from the California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program to expand its bio–refinery in Bakersfield.
process of obtaining necessary permits and procuring equipment. Crimson expects to realize initial production increases in the second half of 2014. The expansion project will also allow Crimson to increase the use of ultra-low carbon materials, such as corn-oil byproduct from ethanol plants, and utilize a broader range of raw
materials, including newly emerging sustainable materials, such as algae oil. “The Energy Commission’s Alternative and Renewable Fuels and Vehicle Technology Program invests up to $100 million a year in innovative projects such as these, which are transforming our fuels markets and helping to meet California’s clean air and
climate goals,” said Randy Roesser, deputy director of the Energy Commission’s Fuels and Transportation Division. “With the expansion of its Bakersfield biorefinery, Crimson is poised to become the state’s largest producer of sustainably produced, low–carbon biodiesel, which will have 85 percent lower greenhouse gas emissions than conventionally produced diesel.” Crimson estimates that upon completion of the expansion in spring 2015, the annual economic activity at its Bakersfield plant will increase by $40 million. The expanded Crimson facility also will boost California’s production capacity to approximately 50 million gallons per year. Crimson’s Bakersfield plant was established in 2007 at the sight of a mothballed natural gas terminal owned and operated by sister company Delta Trading. It initially produced biodiesel from virgin vegetable oils, such as soybean. But Simpson told Biodiesel Magazine that the plant did not produce enough biodiesel to satisfy local demand and production was suspended during the 2009 economic slump. After the plant sat idle for two years, Crimson restarted production in 2011. The plant was reconfigured to process a variety of low-grade raw materials, including cooking oil, yellow grease and inedible animal fats. — Kern Business Journal
June / July 2014
KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
June / July 2014
Business Profile: ARCpoint Labs
ARCpoint Labs helping keep workplaces safe
eslie Elliot is the owner of ARCpoint Labs in Bakersfield. Elliott recently answered questions posed by the Kern Business Journal about her business and the need for companies to maintain a safe workplace free of substance abuse. For more information about ARCpoint Labs, which is located at 7737 Meany Ave., Suite B9, in Bakersfield, go to http://bakersfield-ca.arLeslie Elliot cpointlabs.com or call (661) 246-4267. What services does ARCpoint Labs provide? ARCpoint Labs provides drug and alcohol screening solutions to meet customers’ needs. They include policy development, implementation, random program management, testing and result reporting, supervisor training and background screening, including the TSA fingerprinting program. Services range from simple collection for most national third-party administrators to managing drug and alcohol programs for local companies, and third-party administration for companies who would like local Kern County representation, but need national testing solutions. What factor determines which test to run? This depends on the organization’s needs and reasons for the test. Instant results are available, as are lab results that require tighter screening levels from both urine and saliva collection. If a wider window of detection is called for, a hair follicle or nail test might be implemented. If a wide window of current use is required, we might utilize a sweat patch that is worn for up to two weeks. The substances tested, as well as screening and confirmation levels, are matched to employer needs.
A company’s testing needs may require sophisticated laboratory analysis, which is available through ARCpoint Labs.
How is ARCpoint Labs innovative? ARCpoint prides itself on staying abreast of the newest testing technologies. Some of these technologies include the e-screen device, which performs an instant drug screen utilizing patented, instrumented drug screening technology. Another innovation is the TruTouch Blood Alcohol Detection Unit, which performs a non-invasive blood-alcohol test by shining a near-infrared light into a person’s knuckle and reading the alcohol level in that person’s bloodstream. The TruTouch also confirms identity via bio-identification markers to ensure against “buddy” punching.
The U.S. Occupational Safety and Health Administration reported 823 gas extraction workers died on the job from 2003 to 2010. This rate is seven times higher than in other industries. What are contributing factors? Work in the oil and gas industry is dangerous and demanding. A great deal of time and energy goes into creating a workplace that is as safe as possible and where accidents are minimized. Ensuring a drug-free workplace is part of how we ensure worksites are safe. What are the statistics behind drugs and alcohol in the workplace? According to the Coalition for Drug Abuse, 60 percent of the world’s illegal drugs are consumed by American drug users. Two million Americans use heroin, 6 million use cocaine, 18 million have alcohol abuse problems and an estimated 23 million people use marijuana at least four times a week. Of all the drug users, 74.8 percent are employed and active in the workplace. This means that 12.9 million individuals actively use drugs in the workforce, according to the U.S. Occupational Safety & Health Administration. Using drugs impairs decision-making abilities, as well as physically impairs people. This is a deadly concoction when on the job. In fact, between 10- and 20 percent of American workers who die at work have positive results when they are tested for drugs or alcohol. An OSHA study revealed the most dangerous occupations, such as mining and construction, also have the highest rates of drug use by their employees. The National Highway Traffic Safety Administration reports that about 40 percent of all work-related accidents involve alcohol. And according to the Hazeldon Institute, over 60
The TruTouch Blood Alcohol Detection Unit performs a noninvasive blood-alcohol test by shining a near-infrared light into a person’s knuckle and reading the alcohol level in that person’s bloodstream.
percent of workers are aware of at least one other worker who has worked under the influence.
What substance is the biggest challenge to workplace safety? Alcohol poses unique challenges because it is the only legal substance we test for in the workplace. It has been managed fairly tightly, moving the workplace away from the twomartini lunch. However, the real challenge is how to control what someone does legally on his or her off-work time and how it affects a workplace. For instance, someone can have a few drinks, go to bed and wake up the next morning still impaired. Their perception may be that they have “slept off ” the residual effects of the alcohol. But in reality, that may not be the case. This challenge is why we are especially excited about having Trutouch technology available to help employers. The TruTouch is designed to be a “fit-for-duty” test to eliminate the effects of alcohol in the workplace. The TruTouch allows for frequent testing, which is the only way to get a true handle on the state of alcohol in a company’s workplace. “Fit-for-duty” testing allows an employer to make different decisions around non-negative results, and will help employees understand how quickly alcohol does, or does not clear their system. Frequent testing will help employers uncover problem drinkers earlier and allows them the opportunity to get workers the help they need to recover.
June / July 2014
KERN BUSINESS JOURNAL
Small Business Week
Importance of nation’s small businesses showcased By Melende Ward
ach year, the President of the United States proclaims National Small Business Week to recognize the importance of America’s small businesses. This year, May 12 to 16 was dedicated to honor the important contributions of America’s entrepreneurs and small business owners. The Fresno SBA District Office continues to promote the interests of American entrepreneurs in the 15-county jurisdiction of the San Joaquin Valley. The office’s collaborative efforts with its partners have helped thousands of entrepreneurs reach for the American Dream in small business ownership. Working with participating lenders and business development partners, the SBA continues to help entrepreneurs start, grow and expand their businesses. “Small businesses are the foundation of our economy. Half of America’s workers either own or work for a small business,” said Carlos G. Mendoza, Fresno SBA district director. “National Small Business Week is an opportunity to show our support for our friends and neighbors who throughout the year are growing our local economy, as well as supporting many local initiatives and organizations.” With the vast majority of businesses in Kern County considered to be “small businesses,” their importance to the local economy is significant. Entrepreneurs make huge personal sacrifices and work long-hour days to develop a successful business. One of the critical parts to a successful business is obtaining financing. The valley
continues to see improvement in access to capital for entrepreneurs. Loans made by local lenders and banks, and guaranteed by the SBA, to small businesses and entrepreneurs continued to rebound in fiscal year 2013, which ended Sept. 30, 2013. In Kern County, 105 loans for a value of $44.5 million were made during fiscal year 2013. Out of the 15 Central California counties, Kern County was the second highest county in the total number of SBA loans approved last fiscal year. “These loans demonstrate our continuing partnership with local lenders and collaboration with our business development network in meeting the unique financing needs of small businesses,” said Mendoza. “However, there is still work to do. Each SBA lender, business development partner and SBA itself knows the continuing challenges when it comes to getting loans in these difficult times, and that’s why it is important that SBA continues to work together with our lenders to facilitate lending to small businesses.” Kern County is fortunate to have several resource partners that can be called upon for assistance. Working under a SBA cooperative agreement with CSU Bakersfield and UC Merced, the Small Business Development Center and the Bakersfield SCORE chapter are valuable resources that provide services to build, sustain and grow small businesses. For more information about SBA programs, visit the website at www.sba.gov/ca/ fresno or contact the Fresno SBA District Office at (559) 487-5791. Melende Ward is the public information officer for the Fresno SBA District Office.
Once disputed development proposal becomes habitat The Metropolitan Bakersfield Habitat Conservation Plan Trust Group voted this spring to acquire a “crown jewel” of habitat ground — 847 acres of upland and bluffs above the Kern River. The land, once destined for more than 1,300 homes as part of the controversial The Canyons development, is now on its way to becoming a haven for endangered species and as an open air conservation classroom for Bakersfield. Conservation Plan Trust members said the land will be used as “habitat first.” “We’re not buying this land for a park,” said Kern County Planning Director Lorelei Oviatt. But representatives of
the city of Bakersfield, Kern County, and the California Department of Fish and Wildlife said the land is perfect for teaching the public about the plant and animal heritage of the Bakersfield area. “It’s just an excellent piece of property that is close to the community,” said trust group chairman Jim Eggert, the city of Bakersfield planning director, adding that giving the public limited access to the land gives people used to seeing species like the San Joaquin kit fox in an urban area a chance to see the animals in their natural environment. --The Bakersfield Californian
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KERN BUSINESS JOURNAL
June / July 2014
Business Profile: Soli-Bond
Soli-Bond helps producers recycle drilling wastes
illiam J. Solan is the executive vice president of SoliBond Inc. in Bakersfield. Solan recently responded to the Kern Business Journal’s questions about his unique energy waste processing business. William J. Solan What are Soli-Bond’s services? Soli-Bond Inc. is a California corporation specializing in innovative and comprehensive waste processing services for the energy industry. The patented Soli-Bond process generates a manufactured soil-like material from oilfield drilling and production operations. The goal is to create a material suitable for beneficial reuse as daily or intermediate cover at solid waste non-hazardous landfills, or for use as supplemental construction material at drilling locations. The Soli-Bond process utilizes a proprietary formulation of hydroscopic cementitious binders and highly absorbent materials mixed with drilling wastes. SoliBond reagents are mixed with the waste in mobile, self-contained processing mixers, when drilling waste pits are not acceptable, or with conventional earth moving equipment, when drilling pits are permitted.
Photos courtesy of Soli-Bond
Soli-Bond’s pioneering processing equipment, combined with its proven stabilization products, has allowed Soli-Bond to meet the challenge of “pitless” oil and gas drilling.
terials undergo an extensive analytical testing to assure their non-hazardous classification. As a result, the uses of the final processed material are numerous. For example, all trash at municipal solid waste landfills must be covered with 1 foot of compacted cover material before the close of each business day. The Soli-Bond process provides this cover material. The recycled product also can be used at the drilling location as fill material, construction base material and supplemental support material in road building.
Who are Soli-Bond’s primary Kern County customers? Soli-Bond clients are the companies that are developing oil properties -- either established, or exploratory. In Kern County, we have a diverse blend of large and small operators, who are continuing the region’s rich exploration history. During our 30-year history, we have been fortunate to have worked for nearly all of them. What is unique about Soli-Bond’s services? Anytime an oil or gas well is drilled, the drilling fluids are designed to transport the drilled cutting from the wellbore to the surface, creating a residual waste material. At Soli-Bond, we have adapted to the everchanging regulatory environment by providing a solution-driven option for our clients. We have turned a waste that was at once considered a nuisance and difficult to dispose of into a recycled material desired for its beneficial reuse. This “closing the loop” benefits our clients by reducing their environmental footprint on their drilling locations and by reducing their liability through recycling. How have regulations affected the industry? Wastes generated from oil and gas drilling and production were originally not a major regulatory focus. The drilling fluids and associated cuttings were considered “special exempt” wastes and placed into unlined pits
Soli-Bond turns waste that was at once considered a nuisance into useful recycled materia.
adjacent to drilling rigs. The containment pits varied from a few hundred barrels to several thousand barrels. Once the drilling operation was complete and the drilling rig moved to the next location, the waste pit would be mixed with the excess dirt generated from digging the pit. Intended to absorb the excess moisture from the waste, the mixing of dirt increased the volume by three to four times. As a result, overflow waste would be discharged to land in violation of the Water Quality Control Board’s exemption. The Soli-Bond process was created to stabilize the drilling waste in the pits with a maximum volume increase of 10 percent, while creating a compactable material that is resistant to the influx of water. Potential contaminants in the waste are rendered immobile and less available to groundwater. The Soli-Bond processed material creates a
semi-monolithic mass that can be mapped and buried at a depth out of reach of most plant roots. The stabilized material can be, if necessary, reexamined at a future time. As concern over groundwater safety has grown, so have government regulations. Drilling waste pits now are allowed in only a few areas of California. Soli-Bond’s pioneering processing equipment, combined with its proven stabilization products, has allowed Soli-Bond to meet the challenge of “pitless” oil and gas drilling. The result now equals or surpasses conventional drilling pits in California. How are the recycled products used? The components of this recycled material — from the residual drilling fluids and drill cuttings, to the Soli-Bond reagents — are all non-hazardous. In addition, all processed ma-
What future trends are you seeing? Fossil fuel development and exploration are in the news every day. Our nation’s energy dependency is linked to our industry’s efforts to adapt and adjust to the ever-changing regulatory environment and political climate. Instead of being fearful of the regulatory oversight, we must bring attention to the great strides we have made toward creating an environmentally-friendly exploration industry. Instead of hiding in the shadows and allowing uninformed opinions to demonize us, we must promote the positive changes we have adopted. Environmental policies will continuously change with political influences and populous perception. Soli-Bond Inc. would rather take part in the efforts to contribute to the development of the regulatory changes than to hide from them. We would rather be pro-active than reactive. Soli-Bond Inc. hopes to continue to be a pioneering voice and an active contributor to the improvement of our great industry.
June / July 2014
KERN BUSINESS JOURNAL
Water conservation begins in Kern County classrooms By David Beard
or over 20 years, the Kern County Water Agency’s public education and outreach program has been educating the public about the sources of Kern County’s water, how it is delivered and stored, the importance of conserving and securing a more reliable water supply. A multi-dimensional approach is taken using the media, presentations and publications to inform the public. A critical component of this outreach is Improvement District No. 4’s Water Education Program, which reaches thousands of students each year. “The ID4 program incorporates teacher workshops, curriculum materials, assemblies, classroom presentations and student contests,” said Sarah Clayton, water education consultant. “All curricula and instruction offered through the program support the Common Core and Next Generation Science Standards, and the California Environmental Education Initiative learning objectives for kindergarten through sixth grade.” Improvement District No. 4 is a facilitator for Project WET, or Water Education for Teachers, which features handson learning activities tailored to integrate knowledge of local water resources and water issues. Teachers who participate can register for continuing education units and they leave with custom-made activity kits to use in their classrooms. To encourage water conservation, an annual poster contest is organized, where students depict Kern County’s water sources and ways to save water. Twelve winners are selected and their posters are showcased on the agency’s website and in agency water educational materials. Awards are given during school assemblies to the top three winners, who are then
Bakersfield Californian file photo
Kern County Water Agency’s Sarah Clayton uses Virginia Avenue Elementary School student Eric Munoz for demonstration during an assembly.
presented with their original artwork framed. The main components of ID4’s education program are grade-level assemblies and materials. Assemblies address Kern County’s state and local water supplies, the agency’s Henry C. Garnett Water Purification Plant, local groundwater banking programs and water conservation. At the conclusion of each assembly, teachers receive a water education curriculum packet and grade-level educational materials. The kindergarten assembly program, “Ruby the Radish,” focuses on urban water use and water conservation. In the story, the main character, Ruby the Radish, starts as a seed and raises awareness of how to use water wisely as she grows. Ruby relates to young readers ways to save water. Students are then given materials to conduct their own experiments. The first grade assembly program, “Suzie-Q’s Water Awareness Campaign,” focuses on urban water use and
conservation, with the main character being Suzie-Q, a heroic squirrel that leaps from tall trees to make urban Bakersfield residents aware of water conservation. Students take home a plush squirrel, a storybook and a water conservation home survey to share with their families. The second grade assembly program, “Casey’s Incredible Journey,” focuses on water purification and water conservation, with Casey the Water Drop taking an incredible journey from the top of Mt. Whitney and through the Henry C. Garnett Water Purification Plant, before arriving at homes and businesses in metropolitan Bakersfield. Students take home a plush water drop, storybook and a water conservation home survey to share with their families. The third and fourth grade assembly program focuses on water in California and highlights Bakersfield’s rich water history and how that water is purified at the Henry C. Garnett Water Purification Plant. An interactive part of the assembly invites students to help build a pizza display, allowing them to see how much water is required to make one of the foods that we all enjoy. The fifth and sixth grade assembly program is Water Awareness, which explores the water cycle, the importance of groundwater and how water is purified at the Henry C. Garnett Water Purification Plant. An assembly activity features an exploration of the scientific process through the demonstration of two chemistry experiments on the chemical components of water. “All aspects of ID4’s educational program work together to encourage students to be informed about their water supplies and how to use water wisely,” said Kern County Water Agency Board of Directors President Ted Page. David Beard is the manager of the Kern County Water Agency’s Improvement District No. 4.
Soli-Bond Inc., a company committed to ensure a safe work environment for our Employees and Customers in the Energy Industry, while providing regulatory compliance through innovative and comprehensive waste processing solutions. For company information please visit www.soli-bond.com
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KERN BUSINESS JOURNAL
June / July 2014
Business partners help train energy industry workers By Michele Bresso
ern Community College District’s 21st Century Energy Center trainees will now be certified by the National Center for Construction Education and Research. The NCCER certification is the newest in a long line of successful features in the college district’s energy program, which provides skills training to unemployed and underemployed community residents, as well as veterans looking to build marketable job skills in the traditional and renewable energy trades. A not-for-profit education foundation developed with the support of more than 125 construction CEOs, association and academic leaders, the NCCER certification is a good fit for local people seeking to work in Kern County’s energy industry. The goal is to develop a safe and productive workforce by creating a standardized training and credentialing program for industry. Kern Community College District chose to align its energy industry training with NCCER standards to add value to its programs. The alliance of the Kern Community College District 21st Century Energy Center curriculum with NCCER standards benefits Kern County employers, according to David Teasdale, Kern Community College District director of economic and workforce development programs. “A lot of energy industry employers value that certification,” Teasdale said. “We are meeting national standards in terms of skill acquisition. We assess our trainees’ skills, and they don’t get the certification unless they pass those national standards.” Teasdale said trainees benefit, too, because the certification is portable. It’s kept on a database, which trainees can access through the Internet, no matter where in the country or world they find employment. The NCCER certification database provides a method for
Photos courtesy of Kern Community College District
Instructor Matt Martz demonstrates use of a multimeter device when installing solar panels.
trainees to demonstrate to employers what skills they’ve acquired. The certification is one of many benefits to trainees in the Kern Community College District 21st Century Energy Center. Another is hands-on training supervised by knowledgeable and experienced industry experts. Trainers create real-world work scenarios and expectations that prepare trainees for jobs that Kern County employers have to offer. “The biggest benefit to business owners and managers is that our program is a source of employees who have learned proven technical skills, earned technical certifications and established practices of valuable soft skills,” Teasdale explained. Trainees learn a variety of skill sets -from core construction techniques to electrical and mechanical skills, and conflict resolution. Good work practices are also part of the training mix. Trainees are expected to show up for class each day, arrive on time, and work
Solar system installed at wastewater plant
he City of McFarland announced in February the installation of a solar array to power its wastewater treatment plant with renewable energy. At no upfront cost to the city, SolarCity installed a sprawling 2,856-panel system. The city will pay for the solar electricity the system generates at a rate that is lower than its current utility rate, and is expected to save
more than $80,000 on utility bills in the first year alone. This will amount to more than $1 million in savings over the next two decades. “The City of McFarland continually strives to reduce operating expenses, so that we can pass those savings on to our citizens,” said McFarland Mayor Manuel Cantu Jr. “The wastewater treatment facility is a vital part of our community, and it’s not going
successfully in a team environment. William Elliott, KCCD training manager, explained skills are one half of the training success story. The other half is that trainees develop a safety mentality through continual safety practice. “From the first day in the classroom working environment, trainees are constantly reminded of safety. We drill them in safety standards and practices, and we expect them to carry out safety practices at all times,” Elliott said. One example of safety expectations is
anywhere; so going solar means long-term savings. It’s also the right thing to do for the environment, and particularly important now to produce clean water as efficiently and cost-effectively as possible in the face of our state’s ongoing drought.” SolarCity will insure, operate, maintain and monitor the ground-mounted solar system for McFarland. The city recently completed a series of energy efficiency upgrades in anticipation of going solar, and reduced its monthly sewage fee by $6 per customer. McFarland’s new 842 kilowatt array will prevent the emission of more than 26 million pounds of carbon dioxide annually over its lifetime, which is equivalent to taking
that trainees must wear safety gear, such as high visibility vests, at all times. The rule is critical to the training environment. “If I walk into the classroom and see a trainee without his or her safety vest on, that trainee is sent home for the day,” Elliott noted. “We’re creating a realistic work environment, where safety is a standard procedure.” Employers also benefit from the battery of tests used to screen trainees admitted to the Kern Community College District energy program. “Trainees have to pass a readiness assessment to get into our program, as well as a drug test and other tests. We do a lot of candidate pre-screening that can be costly, inconvenient or challenging for some employers. That means employers know what they’re getting when they hire our trainees in their entry-level positions.” A 78 percent employment/job placement rate within three months of a trainee completing the 21st Century Energy Center program means the program is working, said Teasdale, who noted industry partners are an important part of the program’s success. Grants and funding support from Chevron, EDF Renewable Energy, the U.S. Department of Energy’s Solar Instructor Training Network, and Wells Fargo are underwriting training sessions in Kern County. “Thanks to our funding partners, Kern Community College District is providing workers opportunities that they wouldn’t get otherwise,” Elliott said. “And employers are getting well-trained and skilled individuals for the workforce.” For more information about the Kern Community College District 21st Century Energy Center training programs or to inquire about hiring center trainees, contact David Teasdale at 661-336-5011. Michele Bresso is the associate vice chancellor of governmental and external relations for the Kern Community College District.
roughly 2,260 cars off the road or planting more than one million trees. It will save more than 122 million gallons of water because electricity generated from solar power, unlike coal, nuclear or natural gas, requires no water. “McFarland, which has been called the ‘heartbeat of agriculture,’ benefits from 300 days of sunlight per year, which makes it ideal for solar power,” said Dennis Cox, SolarCity’s regional vice president in the Central Valley. “The city’s fiscal and environmental leadership is a shining example for the entire San Joaquin Valley and beyond.” — SolarCity
June / July 2014
KERN BUSINESS JOURNAL
Bakersfield takes lead in developing solar standards By Pete Jackson
our neighbors, co-workers and relatives have them. You see them on the rooftops of many homes and businesses. The shiny black panels also cover many square miles of the Central Valley and the Mojave Desert. There is probably someone at your door right now urging you to buy or lease a system. I am referring to solar photovoltaic (PV) systems that are rapidly becoming commonplace in our community. Living in an area with very warm summers means that we use a great deal of electricity to keep our homes and businesses comfortable. There is no shortage of sunlight here, so we can use it to create our own electricity precisely when we need it most. Kern County is one of the busiest regions in the nation for PV system installation, with Bakersfield taking the lead. Annual PV permits in the city have increased from around 100 five years ago to approximately 2,000 in 2013. Bakersfield is on track to issue 4,000 permits in 2014. But an event that occurred in Bakersfield five years ago profoundly changed the way PV systems are now manufactured and installed. Sunday, April 5, 2009 was a typical beautiful Central Valley spring day. At 4:15
Photo courtesy of the City of Bakersfield
A firefighter examines the damage done to solar panels during a 2009 rooftop fire at a store in Bakersfield. The fire led to the development of nationwide installation regulation.
p.m., the calm was shattered by a 911 call reporting a fire on the roof of a big box store. Black smoke was billowing from the top of the Target store on Rosedale Highway. City and county fire crews arrived to find the store manager fighting a blaze involving the PV array on store’s rooftop. As the city Building Department’s electrical specialist, I was informed of the fire the next day and immediately went to the store to investigate. The instant I saw the roof, I
knew that this was a major event, and that the design and installation of PV systems everywhere would forever change. An entire array of modules had vaporized. The Target store fire was actually two fires that occurred instantaneously 200 feet apart. Although PV systems in Bakersfield already had to undergo thorough review and inspection, the fire revealed the need to change manufacturing and installation standards. While the lessons learned from the fire related primarily to large commercial systems, they have been applied to all PV installations, even the ones on residential rooftops. Changes to the manufacturing standards for PV equipment, engineering and the National Electrical Code that governs PV system installations followed quickly after the Bakersfield fire. Homeowners today can have confidence that the systems on their rooftops are protected by DC arc-fault protection, in addition to ground-fault protection. New code rules recognize the effects of rooftop temperatures on wiring methods. Firefighters now can access and disconnect rooftop PV electrical circuits more easily. Rules for identifying and routing DC electrical circuits from rooftop arrays to inverters on the sides of homes and in garages are now in effect. Soon automatic shutdown of rooftop PV circuits will be possible and required. The National Electrical Code requir-
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ing these improvements is a product of the private sector. Volunteers from the industry and regulatory community staff the “code making panels,” with the code updated every three years to keep pace with technological advances. Local jurisdictions, which are generally cities and counties, enforce the NEC rules. In California, the NEC is adopted by the entire state as the California Electrical Code. Local jurisdictions can only make changes to the code based on local geographic, climatic or seismic conditions. Following the 2009 fire, more than 400 PV professionals from throughout California met in Bakersfield for a presentation by the city’s Building Department about proper design and installation of systems. As Bakersfield’s chief electrical inspector and someone who investigated the fire, I now serve on the NEC code making panel, as well the standards technical panel for Underwriters Laboratories (UL), which is involved in setting the design and manufacturing requirements for PV equipment. So the next time you are walking the streets of Bakersfield and you notice a PV array up on a rooftop, you can take pride in knowing that your city has played an important role in developing a clean, efficient and safe source of energy. Pete Jackson is the chief electrical inspector for the city of Bakersfield.
KERN BUSINESS JOURNAL
June / July 2014
Bakersfield is ‘hot spot’ for rooftop solar sales
akersfield is one of California’s top four “solar cities” in terms of total distributed solar-power generating capacity. According to a California Solar Statistics April report (www.californiasolarstatistics.ca.gov) San Jose ranked first in capacity within the city limits, at 58.9 megawatts, followed by San Diego with 57.2, Bakersfield with 33 megawatts, and Fresno with 30.9 megawatts. The Kern Business Journal recently interviewed representatives of three local rooftop solar companies about consumer demand and industry trends.
Glenn Bland is the owner of Bland Solar in Bakersfield. The company was founded in 1985, offering traditional heating and cooling systems, and solar systems. The company’s solar business struggled after Congress in the mid-1980s balked at providing tax credits for the start-up industry. But in 1999, the industry became revitalized and so did Bland’s solar business. About 70 percent of Bland’s customers are home owners, with 30 percent businesses. The average system Bland sells in Bakersfield costs about $20,000. Customers may qualify for a 30 percent federal income tax credit, which lowers the cost. Why do your customers buy solar? The purchase of a system will pay for itself in money saved on utility bills in five years. That is the number one reason: to save money. Getty Images How do your customers pay for systems? I do Bakersfield is one of California’s top four “solar cities” in terms of total distributed solar-power generating capacity. everything I can to talk customers out of leasing a system. We offer unsecured financing with 0 down and 6.5 perbers who have installed systems. Are they satisfied? cent interest. There are no fees. Most customers chose an What trends are you seeing? Overall, people are 84-month payment plan. becoming more aware of solar. There is more than accepWhat critical questions should customers ask? tance. There is an expectation that a home will have a system. Number one, find out the history of the company. Some companies come into solar from other industries, such as security. They do not have the backgrounds to provide quality work. Solar City Get five references. Look at how the company’s installs were John Vigil is the regional operations manager for Solarmade. For example, were wires left exposed? City, a San Francisco-based national provider of solar sysWhat should customers look for in selecting a tems, with a Bakersfield office. A publicly traded company, company? The company should have “bricks and mortar” SolarCity was founded in 2006 by brothers Peter and Lyndon in Kern County. They shouldn’t be an Anaheim company Rive. Their cousin, Elon Musk, the founder of Tesla, is the sending a crew from 100 miles away to do the installations. company’s chairman. While the Bakersfield office focuses How can customers save money? Check with the mainly on residential solar power, the company also has comCalifornia Energy Commission [www.energy.ca.gov] You mercial installations. will find information about the Solar Initiative and set-up Why do your customers buy solar? Our customers standards. Some systems have more power efficiency than are looking for lower utility costs and clean energy. others. You have the Cadillac systems and the Ford/Chevy How do your customers pay for systems? Photo courtesy of Bill Deaver systems. There is no sense paying more for higher density Primarily our systems are leased. Most people don’t have Solar energy panels also have been erected at the Mojave Air panels if you do not have to. For example, if you have a two $40,000 to buy a solar system. The advantage with a lease is and Space Port in eastern Kern County. story home, you don’t need to pay more to have a “smaller that if anything goes wrong, we go right out there and fix it. footprint” of panels. offer a no-money-down proprietary loan, using our own What critical questions should customers ask? What trends are you seeing? We are starting to financing. We have a 2.99 percent fix rate 12-year loan. Are the installers licensed contractors and insured? Are they see prices bottom out. Solar panels have never been more What critical questions should customers ask? bonded and members of the Better Business Bureau? What affordable. Every company uses imported products. Some Customers should ask about the quality of the equipment kind of training do their installers receive? What guarancompanies will claim their systems are “American made.” being installed. We want our solar to work. It is important to tees do they offer? Do they do their own monitoring of the But really they mean the systems are assembled in America. understand how a warranty will be honored. Some compasystems, or outsource the monitoring? SolarCity does its own We are waiting to see the impact of a tariff that is likely to be nies may be installing imported, inferior parts. monitoring and it is included in the lease agreement. imposed soon. What should customers look for in selecting a What should customers look for in selecting company? Local is important. You will have more account- a company? A lot of this is price-driven. A lot of customability if you work with a local company. I was born and ers go with what is cheaper. But you should go with a local Sun Solar raised here. I don’t want to see one of our customers in a gro- company that will be around if something goes wrong. Scott Ryan is the vice president of Sun Solar in Bacery store who is not satisfied with the system we installed. How can customers save money? Solar itself kersfield. Founded in 2008, the company focuses primarily We have seen out-of-area companies blanket the county with should save you money. You also should not buy a product in residential rooftop solar systems. The average cost of a a sales force. When the job is done, they are gone. Some that is not needed. We will not try to oversell. For example, residential system in Bakersfield ranges from $10,000 to companies spread panels everywhere. We design system to panel cleaning should not be necessary. We monitor. If we $20,000. notice low productivity, we will come out and check the Why do your customers buy solar? Our customers be architecturally a part of the property. How can customers save money? Look at the system. We’ll clean it, if necessary. find the biggest value in solar is saving money. The systems entire picture. Determine the size and capacity you will What trends are you seeing? Prices are going also stabilize utility bills. Customers no longer have “shock need. Get at least three bids. Do your “due diligence,” as you down. More people are getting solar. Sales are most definitely and awe” when they open their bills. should every major purchase. Ask friends and family memincreasing. How do your customers pay for systems? We
June / July 2014
KERN BUSINESS JOURNAL
Bakersfield: Rooftop solar sales booming By Jose Granados
akersfield and nearby communities are prime solar markets, particularly for photovoltaic systems. Research results show a significant number of homeowners have installed solar panels in the last few years and the demand continues to grow. A recent survey by Scarborough Research shows that more than 31,000 Kern County adults own or are planning to buy solar panels. Before we explore the demographic and lifestyle characteristics of local solar consumers, we will explore how the local market compares with the regional, state and national demand. According to Scarborough Research Multi-Market, released in September 2013, more than 2.6 million adults in the United States report owning solar panels and 3.5 million are planning to buy solar panels in the next 12 months. California leads the states with the highest number of adults owning or wanting solar panels. As of September 2013, more than 1.6 million California adults either owned or were planning to buy solar panels in the next 12 months. Additionally, the Solar Energy Industries Association (SEIA) states that there are currently more than 1,678 solar companies operating in California; accounting for more than 47,000 jobs.
In Kern County, as of September 2013, more than 31,000 adults reported either owning or planning to buy solar panels in the next 12 months. Kern County ranks number 14 among California counties for the most solar consumers; Fresno ranks number 11; and Tulare is number 19. Among Bakersfield zip codes, most solar consumers reside in 93306, followed by 93312, 93308 and 93313. In addition to measuring demand for solar panels, Scarborough’s survey also gathers data on demographic and lifestyle characteristics, including eco-friendly activities and shopping. This data can be used to build a detailed profile of local solar consumers (adults who currently own or are planning to buy solar panels in the next 12 months). Most local solar consumers are active, affluent white collar professionals who own their homes. Age is not a defining characteristic among these consumers. Kern adults age 35 to 54 are just as likely to own or be planning to buy solar panels, compared to adults age 55 or older. The major defining demographic variables are household income, home ownership, home market value and home tenure – the number of years living in the current home. As expected, the majority (89 percent) of adults who say they own or are planning to buy solar panels are home owners. Additionally, adults who have lived in their current home for more than 10 years are 37
Total Kern Adults Age 35 to 55 Age 55 or more Home Owner Household Income $75,000 or more Household Income $100,000 or more Home tenure more than 10 years Home market value $150,000 to $300,000 Home market value more than $300,000
*Adults who currently own or plan to buy solar panels in the next 12 months. Index above 100 indicates Solar Consumers are more likely to have the listed characteristic compared to all Kern adults
percent more likely to own or be planning to buy solar panels, compared to all adults. However, adults with a home tenure of less than 10 years are 19 percent less likely to be solar consumers. Home market value also plays a major role in defining solar consumers. The higher the home market value, the more likely the owner is a solar consumer. Local solar consumers are also more likely to have done major home improvements in the past 12 months. High numbers of solar consumers report having spent more than $5,000 in home improvements in the last 12 months - including new flooring, paint, landscaping and plumbing. Local solar consumers are defined by
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key lifestyle characteristics, as well. Solar consumers are physically active. They play golf and enjoy gardening, yoga and volunteer work. Solar consumers are also very likely to invest in eco-friendly products, such as energy efficient windows, appliances and lighting. They are willing to pay more for these eco-friendly products and services, and often donate money to social and environmental causes. Together, these characteristics reveal a large solar market in Bakersfield and nearby communities, just ready to take off. Jose Granados is the strategic market analyst for The Bakersfield Californian.
Top 10 Reasons Why Businesses Join a Chamber of Commerce
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Solar Consumers* Percent Index Number 100% 100 31,432 41% 114 12,798 33% 118 10,220 89% 166 27,811 64% 276 20,226 46% 311 14,379 47% 137 14,777 38% 178 12,045 27% 395 8,525
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KERN BUSINESS JOURNAL
June / July 2014
Renewable energy taxes spruce up East Kern towns By Bill Deaver
hose giant wind turbine blades spinning in East Kern’s “gentle zephyrs” are generating more than clean energy these days. While the electricity from wind turbines in the Mojave-Tehachapi Wind Resource Area goes into the electrical grid, some of the tax money they generate is being used to spruce up the communities of Boron, Mojave and Rosamond. Under a program suggested by Kern County Planning Director Lorelei Oviatt and turned into law by Kern Supervisor Zack Scrivner, a percentage of property tax revenues the turbines pay goes to the county’s Renewable Energy Neighborhood Enhancement Wind Business Investment Zone Program. The RENEWBIZ Grant Program assists organizations with the cost of developing or improving commercial and industrial districts within the unincorporated communities of East Kern. It is a flexible source of competitive funding for a broad range of activities. Grant funding is available for two categories of projects: Minor and Major. Funding is available to private businesses, which will be eligible for 75 percent of the available funds, and to local tax-exempt organizations, which can apply for the remaining 25 percent. A Tehachapi architect is assisting businesses with facade designs. Work is already underway in the three unincorporated communities to upgrade facades on businesses in their downtown areas with county RENEWBIZ grants. This year, 13 Boron businesses are sharing $85,345.73; 17 Mojave stores are divid-
ing $147,512.92, and 10 Rosamond merchants will share $58,152.14, for a total of $291,010.79, according to the Kern County Planning Department. When the program was introduced in 2012, Scrivner said “We want to make Mojave a destination. We want to brand Mojave and make basic infrastructure improvements.” The same goes for the other two communities, which, like Mojave, are working with county planners to revitalize their downtowns with the help of Oviatt, her staff and a consulting firm hired for the effort. The program is based on the successful Tehachapi Main Street program. Tehachapi Mayor-Pro-Tem Susan Wiggins noted that the city is often filled with tourists visiting the upgraded community on weekends “and spending money! It’s been a tremendous success.” The grant effort follows “visioning” exercises held in Boron, Mojave and Rosamond, which brought community members together to share their desires and ideas for upgrading their towns. In Mojave, the visioning process was followed by a burst of activity, much of it self-generated, to spiff-up downtown and residential neighborhoods, even before the formal grant program kicked off. Several businesses have already begun work on their structures, and a new Family Dollar store modified its design to fit into the “revitalization” scheme, Oviatt said. While the first phase of the process is aimed at businesses, Scrivner said residential neighborhoods have not been left out. He said a county employee has been assigned to a new “blight reduction” program
Use library’s online resources to create business plans By Katherine Ross
tarting a new business can be daunting. But the print and electronic information resources at the Kern County Library can help. “Business Plans Handbook” is a valuable tool that is worth a closer look. Having an effective business plan is the best starting point for an entrepreneur -- especially when seeking funding. “Business Plans Handbook” is available through the Kern County Library’s online database, Gale Virtual Reference Library.
To access Gale Virtual Reference Library, navigate to the Kern County Library home page, www.kerncountylibrary.org. Click Research and Reference from the links on the left side of the screen. Click onto the alphabetical list of all databases, and then click the link next to Gale Virtual Reference Library. Select “In Library” if you are using the reference at your local library branch. Select “Outside the Library” if you’re elsewhere and have a library card number, which you’ll then enter into the box that is provided. On the home page of this resource, scroll down to find “Business Plans Handbook”
to expedite improving the appearance of the three communities. Oviatt said notices sent to owners of properties targeted by the blight reduction program, many of them absentee landlords, will include information on the RENEWBIZ revitalization effort. “This information can make a difference to lenders financing improvements to their
property,” and can educate them about what is being done to add value to their property, she said. That old saying, “It’s an ill wind that blows nobody any good,” is proven daily by East Kern’s renewable energy industry, which also supports some 700 permanent jobs. Bill Deaver is the vice-president of the Mojave Chamber of Commerce.
on the second row of highlighted book titles. You will see it as a miniature thumbnail photo of the book’s cover. To read this book online, click on the cover, then click the title under the heading “Select a volume,” to access the table of contents. As you’ll see from the chapter headings, “Business Plans Handbook” presents sample business plans for 20 different small businesses, including sections on finances, or cash flow. There’s also a general business plan template, enumerating the various elements necessary for a complete business plan. The book also includes a useful contacts list of organizations, agencies, and consultants who can offer further assistance. The electronic book concludes with a glossary of small business terms. Each section of this electronic book may be printed out, emailed, or downloaded to flash drive, MP3 player, or e-reader.
Gale Virtual Reference Library includes the full text of three other business-related titles: “Collaborative Grantseeking,” “Encyclopedia of Small Business,” and “Leadership in Nonprofit Organizations.” This is in addition to its dozens of other titles in several other subject areas. If you prefer, books on business plans may be available in print form for checkout from the Kern County Library, or a book can be requested from one of the many partner libraries in the San Joaquin Valley Library System. Just ask your local library staff for assistance. You can also contact a librarian by phone, or through the Kern County Library’s online web-form posted at www.kerncountylibrary. org Katherine Ross is a librarian at the Beale Memorial Library, the main branch of the Kern County Library system.
June / July 2014
KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
June / July 2014
Wind Energy: Kern’s drought-resistant cash crop By Ashley Richmond
n April 2014, for the first time in the 15-year history of the U.S. Drought Monitor, 100 percent of California was categorized as experiencing “moderate” to “exceptional” drought conditions. Fresh water is the nation’s most imperiled natural resource. In Kern County, it is especially vital in sustaining the thriving and critically important agricultural industry, which employs over 20 percent of the county’s workforce. In addition to cattle ranches and poultry farms, over 250 crops are produced in Kern County. Each year, approximately 780,000 acre-feet of Kern’s groundwater are taken out and not replaced. Our state has a shortage of one natural resource, but an abundance of another: wind. Wind energy not only survives droughts, it fights against them. Wind energy saves over 2.8 billion gallons of water each year in California. Leveraging wind energy to conserve water is smart resource budgeting. The power sector takes in more water than any other sector nationally, agriculture included. Thermal power plants – which use water for cooling purposes – consume water through evaporation. The U.S. loses an estimated 1- to 2-trillion gallons of water annually to such evaporation. In contrast, wind energy diverts no water from ground or surface sources, and consumes no water per megawatt-hour. (Other sources consume via evaporation up to 1,000 gallons per megawatt-hour.) Using wind turbines for power generation reduces the demand for already-scarce water resources. For decades, our state has led the world in wind energy. California remains a national leader in the wind industry, ranking second in the U.S. for wind power installations and second for wind industry jobs with over 20 wind-related manufacturing facilities. Wind energy projects operating instate today can provide enough electricity to power more than 2 million California households. Kern County has played an especially significant role in contributing to the advancement of the wind energy industry and achievement of the state’s renewable energy and greenhouse gas reduction goals. The Tehachapi Pass currently hosts 3,134 megawatts of installed capacity, including
Photo courtesy of Martin Varga
The Tehachapi Pass hosts 3,134 megawatts of installed wind energy capacity, including the largest facility in the world, the Alta Wind Energy Center.
the largest wind energy facility in the world, the Alta Wind Energy Center. We can and should grow our wind power industry throughout California. It is expected that wind energy will provide close to 7 percent of California’s electricity supply in 2014, and California’s wind resources are plentiful enough to provide more than 40 percent of the state’s needs. A recently-released study performed for California’s five major utilities by Energy and Environmental Economics (E3) provides a roadmap for achieving 50 percent renewable energy by 2030. Subsequent review and analysis of the E3 report by the California Wind Energy Association (CalWEA) concluded that the state could move from its current 33-percent-by-2020 renewable energy goal to a 50 percent
State is birth place of utility-scale wind power Linda Parker and Peter Kelley
alifornia is the birth place of utility-scale wind power. Decades ago, the state was one of the earliest places to experiment with the then-novel technology. Today, we are able to see the results of those early investments in renewable energy. Wind energy, clean and homegrown, powers more than 15.5 million average American homes nationwide. The Golden State deserves significant credit for helping to jumpstart the growth of American wind power. Despite a public overwhelmingly in favor of wind energy, however, some policymakers in California remain hesitant to support this affordable, near-limitless resource. Even today, California wind power keeps making impressive strides. According to the
American Wind Energy Association’s justreleased Annual Market Report, California maintained its number two spot in 2013 for total installed wind capacity, and the state’s wind energy resources power over 1.9 million average California homes. There’s more where that came from: California’s land-based wind resource could power 34 million homes, or 40 percent of the state’s current electricity needs. With the cost of wind power dropping 43 percent in just four years, the opportunities for growth are more apparent than ever. California’s status as a national leader in wind power is evident. In addition to holding the number-two spot for installed capacity, California hosts the second-most wind industry jobs and 19 factories in the wind supply chain. A capital investment of $11.7 billion supports up to 4,000 Californians who work
renewable energy future with a relatively modest 2 percent impact on ratepayers, or less if that goal is met with a diverse resource portfolio mix, including a substantial amount of wind energy. Maintaining a strong wind energy industry in California can help ensure that the benefits that have accrued to Kern County residents to date – annual lease payments to landowners, tax payments to the county, and a clean energy source that uses virtually no water – continue into the future. Ashley Richmond is the director of siting policy for the California Wind Energy Association. CalWEA is a non-profit corporation supported by members of the wind energy industry.
in wind power. That investment has fueled an industry generating millions in tax revenues and providing more than $27 million a year in lease payments to farmers, ranchers, and other landowners who host turbines on their property. Those farmers and ranchers are taking advantage of this drought-resistant cash crop to add a stable component to their income, and they’ll also be happy to know that California wind power avoids the consumption of nearly 3 billion gallons of precious fresh water per year. For those concerned with the potential effects of climate change, Golden State wind power avoids more than 7.8 million metric tons of CO2 emissions a year, equivalent to taking 1.4 million cars off the road. Across the country, wind power is breaking records and transforming how Americans get their energy. As we entered 2014, 100 wind projects totaling more than 12,000 megawatts (MW) were under construction, the most-ever at any point in the industry’s history. Paradoxically, this boom was driven in part by continued uncertainty at the federal level, where the fate of the Production Tax
Credit (PTC) for wind power hangs in the balance. This market-based incentive has not yet been extended in 2014, threatening to put thousands of jobs at risk and seriously hindering American wind power’s future growth. Fortunately, the Senate Finance Committee has taken a step in the right direction by introducing bipartisan legislation that would extend the PTC for another year. Wind power advocates in Washington, D.C., are working hard to ensure this important policy moves through both congressional chambers as smoothly as possible. Wind power needs a predictable, long-term, stable tax policy to keep attracting up to $25 billion a year private investment while creating vital U.S. manufacturing jobs. California is sure to remain an important contributor to the industry and, ultimately, the entire country, as American wind power helps ensure a more secure, affordable, and reliable energy future for us all. Linda Parker is the executive director of the Kern Wind Energy Association. Peter Kelley is the vice president of public affairs for the American Wind Energy Association.
June / July 2014
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
June / July 2014
Kern County’s mines meeting worldwide demands By Bill Deaver
ining in Kern County began when gold was discovered in 1851 in Greenhorn Gulch, near the Kern River, by a member of pathfinder Gen. John C. Fremont’s party, who was exploring California. A year later, mining began at the Keyes and Mammoth mines in the Keyes District, east of Bakersfield. From 1880 through 1959, about 1.8 million ounces of gold was mined, mostly from lode deposits. The county’s major gold mining districts are the Amalie, Cove, Green Mountain, Keyes, Rand and Rosamond-Mojave. The Golden Queen Mine, southwest of Mojave, is expected to reopen next year, when construction is completed, bringing more than 150 new jobs to the county. The county’s largest mine is Rio Tinto Minerals’ huge borax mine and mill in Boron, on the east end of the county. It’s also the largest open pit mine in California and employs more than 700 people. Some 1,500 jobs are tied to mining (excluding petroleum) in Kern County. Cement mining in Kern played an important role in the early days of Los Angeles, when cement from what is now the Lehigh Southwest Cement plant at Monolith, near Tehachapi, was used to build the Los Angeles Aqueduct in the early 1900s. The Lehigh plant, as well as the CalPortland Cement plant, west of Mojave, and National Cement plant, near Gorman, continues to supply cement. Cement from CalPortland’s Mojave and Colton plants was used in February for a massive, record-setting pour to build an 18-foot thick foundation for a new skyscraper in Los Angeles. A reported 2,120 truckloads of concrete using cement from the two plants were poured in 30 hours for an operation that entered the Guinness Book of World records. Cement from the Mojave plant, built in the early 1950s, has helped build Dodger Stadium and hundreds of other structures in Southern California and Nevada. And its cement is exported from a company-owned facility at the Port of Los Angeles.
Photo courtesy of National Cement
The National Cement Co. plant near Gorman looms over the mountain landscape.
Minerals used to enhance buildings are also mined in the county. Since its foundation by Roy Blake in 1953, Blake’s Wholesale Stone has quarried and fabricated a unique deposit of quartzitic schist in eastern Kern, near Randsburg. Today, under the leadership of John Chesney, Sydney Peak Stone continues to provide exceptionally crafted custom stone products that will enhance the beauty and durability of any design. Sydney Peak Stone is a family-owned and operated quarry which is working to become California’s first “green”
Mojave’s Golden Queen Mine soon resumes operation By Bill Deaver
mine that produced millions of dollars in gold in its heyday in the 1930s will support some 160 jobs when construction is completed in 2015. Located southwest of Mojave, the Golden Queen Mine, originally known as the Silver Queen, will produce gold, silver and aggregate on Soledad Mountain, the area’s iconic landmark. “Golden Queen Mining Co. is full-speed ahead on the project’s construction and we are very pleased to have the first structure, the workshop/warehouse, completed,” said Ken Mann of Golden Queen. “This project will provide an enormous boost to the economy in eastern Kern County and we look forward to
continuing our long tenure in the community.” Construction is complete on Phase I dirt work, including the main entrance, the storm water sediment collection pond, employee/ visitor parking, fuel storage area, north/south access road, east/west conveyor corridor, assay laboratory earthen pad and shop/warehouse earthwork and foundation. Work is continuing on excavating overflow process ponds and building roads. The reopened mine will use conventional open pit mining methods, cyanide heap leach and Merrill-Crowe processes to recover gold and silver from crushed, agglomerated ore. The permitted combined ore and waste mining rate, when the mine is operating, is 14 million tons per year. Gold and silver production is projected to average approximately 77,000 ounces and 890,000 ounces respec-
quarry, meeting all California environmental laws and regulations. Natural stone is 100 percent usable, emits no volatile organic compounds, and can be recycled. EPA Tier 3 engines are used in all machines and sites are reclaimed when mining is completed. Other mining operations in the county include aggregate on the valley floor (and soon to begin at the Golden Queen Mine near Mojave) and clay in Western Kern. Bill Deaver is the vice-president of the East Kern Economic Alliance.
tively per year, although this is expected to fluctuate from year to year depending upon the ore head grades. Gold and silver production is projected to be 1,067,000 ounces of gold and 12,039,000 ounces of silver over a period of 15 years. Reopening the mine brings the Southeast Kern area’s first industry back to life from the days when the Golden Queen and other operations were major industries in the region, especially in the years before World War II. The mine also played a role in the growth of the Mojave Air and Space Port, the nation’s first commercial spaceport. In 1935, Kern County built the Mojave Airport, the site of the Mojave Air and Space Port, to transport gold from the mine. That small county airport blossomed into a Marine Corps Air Station during World War II and the Korean War. Today it supports nearly 2,000 aerospace and related industry jobs. Mining in the Mojave area began on March 8, 1894, when W.W. Bowers discovered gold on a promontory south of Mojave, then named Bowers’ Hill and now known as Standard Hill. This soon led to the discovery
of the Exposed Treasure vein on the same hill. Later that year, gold was found on Tropico Hill, in the Rosamond Hills. Prospecting also started on Soledad Mountain and gold was found on the Queen Esther, Karma, Echo, Elephant and Gray Eagle properties. In 1933, a prospector named George Holmes found some float, gold-bearing surface ore, that led to the discovery of the Silver Queen vein system on Soledad Mountain. Claims were staked and exploration resulted in a large increase in ore reserves in the following years. The Golden Queen vein was also discovered at that time. Mining was halted during the war and resumed briefly in the 1950s. An effort to reopen the mine began in the late 1990s, when permits were obtained. But work was delayed by a drop in the price of gold. The current operation resulted in resumption of operations following several years of permitting efforts. Bill Deaver is the vice-president of the East Kern Economic Alliance.
June / July 2014
KERN BUSINESS JOURNAL
Trade Secrets: Tips for keeping data safe By Jerry Pearson
he widespread impact of “Heartbleed” ignited a global discussion about secrets of all kinds. The Heartbleed Bug is a serious vulnerability in one of the web’s most popular cryptographic software libraries, OpenSSL. It allows attackers to eavesdrop on communications, to steal data directly from the services and users, and to impersonate services and users. For business owners, the increased odds of high tech theft are good reason to review protocols for keeping proprietary information secure. Our attorneys help business owners address and respond to employment and enterprise issues. From developing employer handbooks to legal action to protect trade secrets, our firm aids businesses interested in robust commercial protection. Consider these points when putting together data security protocols: Define data and trade secrets. Consider the types of information used and produced by your company. Before you develop a protection plan, categorize data types, and then look at the vulnerability of that information. To adequately protect your trade secrets, clearly define what they are in your confidentiality agreement and employee handbook. This will help prevent an employee from arguing their ignorance that a particular item of data was, in fact, considered a trade secret. Need to know. As you develop data security, ensure sensitive information is available only to employees on a need to know basis. Use systems that capture details on who is accessing information and flags large downloads. Check backgrounds. Good background checks are critical when hiring
employees or contractors. Pay special attention to exit interviews and information audits when an employee leaves the company. Create a handbook. Your employee handbook must spell Jerry Pearson out clear expectations concerning data security and confidentiality. Ensure that any non-compete, nonsolicitation and non-disclosure policies comport with local law. Keep in mind that any non-compete agreements in California are likely non-enforceable unless they are tied to the non-use of trade secrets or the sale of a business interest. Make sure employees understand your policies at the outset of hiring. Undertake training programs to keep employees updated on security policies. Understand clouds. To the loss of U.S. networking companies, some American businesses are migrating to clouds outside the United States to avoid the peering eyes and ears of the NSA. If your data is part of any cloud, make sure you understand sharing and privacy arrangements. Consider options other than the cloud for highly sensitive information. Address social media. Have up-todate social media and technology use policies informing your employees of their rights and responsibilities. Make sure that these policies incorporate your language concerning confidentiality and the non-disclosure of trade secrets. If your data is vulnerable to hackers inside or outside of your company, your venture could be at risk. All companies should be prepared to respond to a security compromise. Jerry Pearson is an employment attorney at Young Wooldridge in Bakersfield.
GIVE THE GIFT OF GIVING
Customized Giving Cards are an innovative way to thank customers, reward valued employees and strengthen your company’s image in the marketplace. Here’s how it works: • We design the card for you. • Order customized Giving Cards. • Receive a tax deduction immediately for the total amount. • Give the Giving Cards to say “thank you” to a customer or to reward a valued employee. • The Giving Card recipient can redeem the card at kernfoundation.org to benefit any 501(c)(3) public charity in the United States, including schools and places of worship.
KERN BUSINESS JOURNAL
June / July 2014
One-third earth’s borates come from Boron mine By Florence Yaeger
eadquartered in Denver, Colo., Rio Tinto Minerals is recognized as a leader in refined borate supply and science, with mines, processing plants, and commercial and research facilities throughout the world. Rio Tinto Minerals supplies over one-third of the earth’s refined borates from US Borax, its world-class operation in Boron, in eastern Kern County. The company also has the only privately owned facility in the port of Los Angeles, shipping borates worldwide and manufacturing flame-retardants. Borates contain boron, the fifth element on the Periodic Table, and are basically salts – minerals essential to life and modern living. Rio Tinto Minerals’ global footprint can be found with borates refineries and shipping facilities in China, France, Malaysia, the Netherlands, Spain and the United States; a global network of warehouses and stock points, with global and regional headquarters in the United States, the United Kingdom and Singapore; a lithium borate deposit in Serbia; and a potash project in Canada. The company occupies a strong position in the industrial minerals sector, supplying borates to customers in more than 100 countries for over 140 years. Most of the operational processes that set the standard for borate pro-
duction were developed or first adopted at Boron. Of course, the legendary 20 mule teams are also a rich part of Rio Tinto Minerals’ and Boron’s history. Borates were discovered in Death Valley in 1881 and teams of 20 mules and 4-ton wagons hauled over 15 million pounds of borates out of Death Valley between 1883 and 1888. The 20-day, 300-mile round trip from Death Valley covered over 165 miles. It began 190 feet below sea level and climbed to an elevation of nearly 4,000 feet. Temperatures along the route often were as high as 130 degrees! With over 36 fully-loaded tons for the mules to haul, they ran like clockwork and no mule was ever lost. While technology, of course, has dramatically advanced, that same commitment to quality, innovation, supply reliability and customer service remains the hallmark of Rio Tinto Minerals today. The company is focused on development as work progresses on the Modified Direct Dissolving of Kernite (MDDK) project at Boron. This is a new ore processing system that will reduce mining costs and increase recoveries and salable reserves. Discovered in Kern County in 1926, Kernite is a borate ore that was subsequently renamed after the county. Rio Tinto’s chief executive recently awarded the MDDK project with the CEO Safety Award for best project in 2013. The project was selected for a variety of reasons.
Photo courtesy of Rio Tinto Minerals
Rio Tinto Minerals supplies over one-third of the earth’s refined borates from US Borax, its operation in Boron, in eastern Kern County.
The award recognized the excellent safety performance and strong interdependent safety culture within the project team. Boron Operations continues to innovate with over a $9 million savings in mining efficiencies, including a 56 percent increase in truck productivity. Unparalleled quality in the company’s laboratory facilities in both the United States and Asia provides opportunities for innovation in developing new products and applications involving borates, as well as analytical and technical expertise to serve customers. Refined borates are used in hundreds of products and processes. They are a vital ingredient of many home and automotive application; essential nutrients for crops; and commonly used in glass and ceramic applications, including fiberglass, television screens, floor and wall tiles, and heat-resistant glass. The global borate outlook for 2014 is trending positively. There are three key strategic pillars that drive demand: the need to feed, urbanization and energy. The demand for glass remains the largest volume segment for borates, totaling over 50 percent, with agriculture showing the greatest growth. Borates consumption for LCD televisions will continue to grow due to the shift to bigger screens. Emerging countries will lead this growth. Rapid and accelerating innovation, as seen in the electronics industry, will also likely create new demand, while shortening the replacement cycle. Identifying opportunities to sustainably grow the business is a hallmark of Rio Tinto Minerals. In support of this, the company’s Asia Technology Center was opened in Suzhou, China, in 2013 and is situated to support existing customers and develop the fast-growing Asian market, as well as address the world’s demand for energy, food and urbanization. The Asian Technology Center will have technical capacities in Singapore, China and India tied to the company’s existing re-
Photo courtesy of Rio Tinto Minerals
A massive shovel scoops ore into a dump truck at Rio Tinto Mineral’s open pit mine near Boron.
search and development center in America. Rio Tinto Minerals is part of the larger parent Rio Tinto group, both of which have a long history of pursuing innovation and supporting customers in developing new products and technologies. With the company’s strong safety culture and extensive research and development capabilities, Rio Tinto Minerals is committed to working closely with stakeholders as a preferred supplier and partner. While the current economic climate in the mining industry remains challenging, Rio Tinto Minerals continues to position itself for growth in both the maturing and emerging borate markets of the future. Boron Operations remains the cornerstone for the company’s borate production. Florence Yaeger is the manager of Global Communications for Rio Tinto Minerals.
June / July 2014
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
Low income energy program boosts Kern’s economy By Louis Medina
n a normal year, Community Action Partnership of Kern’s Low Income Home Energy Assistance Program operates on a budget of $5 million, helping 400 to 500 qualifying families annually with home weatherization and another 8,000 households with once-per-year utility assistance. Also called the Energy Program, it funds two dozen local jobs and various vendor contracts with the money it receives from the U.S. Department of Energy, with funds allocated through California’s Department of Community Services and Development. Over the next five years, however, the program will benefit from a 30 to 60 percent increase in annual funding that will create a dozen more jobs and generate business for a number of local vendors. It will also help thousands of additional families throughout Kern. This is because CSD recently updated its formula for allocating Low Income Home Energy Assistance Program funds statewide based on U.S. Census and other data. Local conditions meriting increased funding include a 27 percent rise in Kern’s population, from 661,645 in 2000, to 839,631 in 2010; and an average poverty rate of 22.5 percent from 2008 to 2012—lingering well above the state’s 15.3 percent rate for the same period. Increased program funding levels are: $7.4 million for 2014; $7.9 million for 2015; and, thereafter, $6.6 million
each year through 2018. Funding for 2014 and 2015 includes money carried over from previous years. Romala Ramkissoon, CAPK’s director of family, youth and community services, who oversees the Energy Program, said this represents the biggest boon to the program since it received an extra $6 million in American Recovery and Reinvestment Act funding between 2009 and 2012. American Recovery and Reinvestment Act funding “not only allowed us to increase staff,” she said, “but we also pushed that money out into the community through the purchase of equipment, computers, vehicles, vehicle leases and salaries. It created employment. “This additional funding will allow us to venture more into solar,” she continued, adding that between 2007 and 2008, CAPK piloted a project to install solar panels on 40 homes, including 20 in an affordable housing complex of the Housing Authority of the County of Kern in Arvin. “With the solar units, you practically pay nothing on your electricity bill,” Ramkissoon said. Besides increased Energy Program funding, CAPK hopes to receive additional money through the state’s “cap and trade” program, whose auction proceeds support efforts that reduce greenhouse gases, including home weatherization and solar panel installation. This will be announced in July, she said. CAPK’s website, www.capk.org, features a “Procurement Opportunities” link, where vendors interested in submitting a bid can learn about the agency’s “Request for Proposals,”
June / July 2014
process for the Energy and other programs. It also has a “Jobs” tab that posts the agency’s current employment opportunities. The “Programs” tab has information on LIHEAP for qualifying households. As Kern County’s federally designated poverty fighting agency, CAPK is one of the largest local nonprofits, employing more than 700 staff. Besides Energy Program, its other programs include Head Start, the CAPK Food Bank, supplemental nutrition for Women, Infants & Children (WIC), Volunteer Income Tax Assistance (VITA) and 2-1-1 Kern County Information & Referral. Operating 84 facilities, 14 of which are owned outright by CAPK, and 27 of which are modular buildings on leased land, the agency itself has great energy needs and expenses. One of its biggest needs is for installation of solar panels on the roof of the CAPK Food Bank Warehouse in southeast Bakersfield. The warehouse, which boasts 40,500 cubic feet of walk-in fridge and freezer space, spends upwards of $32,000 a year on electricity bills. If this cost could be offset through the use of power-generating solar panels, CAPK Executive Director Jeremy Tobias said, the money could be reinvested into the purchase and transport of food to feed the county’s hungry residents. A project to install enough solar panels to offset the Food Bank’s high electricity costs has an estimated price tag of $290,000. CAPK would welcome in-kind assistance, grants and donations to make this a reality for the benefit of Kern’s hungry. Interested businesses or individuals may write to Ralph Martinez at email@example.com, or call (661) 3365236 x1114. Louis Medina is an administrative analyst with the Community Action Partnership of Kern.
June / July 2014
KERN BUSINESS JOURNAL
Kern County: 2014 Economic Forecast President’s Report By Richard Chapman
ore than 500 business and community leaders attended the 14th Annual Kern County Economic Summit on March 26, 2014. The half-day event, co-hosted by Kern EDC, the Greater Bakersfield Chamber of Commerce and California State University, Bakersfield, has grown to be a premier forum for the presentation of economic updates, trends and most importantly forecasts for Kern County. This year’s speakers did not disappoint. Some of the highest rated presenters included Forbes Publisher Rich Kaarlgard, the Federal Reserve’s Gary Zimmerman, and renowned Southern California economist Dr. John Husing. Kern County can expect an economic climate ripe for investment and business growth over the next few years, according to Dr. Mark Schniepp, director of the California Economic Forecast. In his 2014 Kern County Forecast and commentary, Dr. Schniepp highlighted the following points: • Kern County can expect economic conditions to continue their trend of improvement in 2014. • The best years of the economic cycle are just ahead. • More job opportunities will be available in 2014 and 2015. We can expect an annual increase of 2-3%, thanks in part to expansion of technology and energy-related jobs. • The construction industry will enjoy robust employment growth, at approximately 5%. • Inflation will increase some, mostly due to housing and healthcare costs. • Significant new commercial, industrial and residential
Overall rankings for economic recovery
Source: Brookings Institution2014 Metro Monitor
development can be expected. • Office real estate market will continue to tighten. • Employment in education and healthcare will increase 6%. Brookings Metro Monitor Update In addition, the Brookings Institution released its latest Metro Monitor update. The semi-annual release tracks the performance of the 100 largest U.S. metropolitan areas on four indicators: jobs, unemployment, output (gross product) and home prices. The report continued to showcase Kern County’s post-recession economic strength. In terms of the pace of the recovery, the Bakersfield-Delano MSA ranked #2 in the U.S. Since the depth of the recession in 2010, Kern County’s overall employment base has grown by 15.2%. With
the exception of the Bay Area, no other California region was in the Top 20. — Richard Chapman is CEO and President of Kern Economic Development Corporation
FOR LEASE 4045 Stockdale Highway
Professional office space available in a central location with high visibility. 4045 Stockdale Highway is a ground-level general office suite improved with a mix of private offices and eight permanent cubicles. The suite also features private restrooms, break room, walk-in vault, and additional basement storage. The space includes custom cabinetry, a built-in reception desk with granite countertop, and other custom finishes. The property is zoned C-O Professional and Administrative Office within the City of Bakersfield, allowing for a variety of commercial and general office uses. Monument signage is available along busy Stockdale Highway, which boasts traffic counts of approximately 35,000 ADT. No additional fees for common area maintenance or “triple-net” charges, and UTILITIES ARE INCLUDED!
FOR LEASE 100 West Columbus
Located at the signalized intersection of Union Avenue and Columbus Avenue in Northeast Bakersfield, CA. The three-story office property is across from Garces Memorial High School, and is less than a mile from Memorial Hospital. Suite 200 is an improved ground floor medical suite with five exam rooms and was formerly occupied as a dentistry office. Suite 201 is also an improved ground floor suite with a mix of several private offices and open space. NO additional fees for common area maintenance or NNN charges.
FOR SALETract 6417
Approved Vesting Tentative Tract 6417 features 26 proposed buildable single-family lots south of Bakersfield. Average lot size of 1.12 acres. Tract 6417 is one of the final tracts to be approved prior to the County of Kern enacting a minimum six-acre lot for homes serviced by septic tanks. Property is zoned E(1)RS in the County of Kern. Property is on the SWC Costajo Road and Shafter Road, South of Bakersfield. Highway 99 south to Bear Mountain Boulevard, North on Costajo to Property.
American Tire moves into new 1-million-squarefoot building Roll Real Estate Development LLC, the commercial real estate development division of Roll Global, has signed a 1-million-square-foot lease with American Tire Distributors Inc. at its Paramount Logistics Park, located at 5000 Capital Road, Shafter. American Tire joins such companies as Target, Formica, The Hillman Group, Baker Hughes and Ross Dress for Less, which recently closed a 160acre land acquisition for the development of a 1.7 million square foot distribution center. The new industrial building that will be built for American Tire will be situated on more than 45 acres and will include 234 trailer stalls and 201 loading docks. Nearly 10,000 square feet of the building will be reserved for office space. The building will also feature 32-foot clear height. Since 2007, American Tire has occupied a 176,500-square-foot industrial building at the Paramount Logistics Park. In May 2013, the company entered into a build-to-suit lease transaction with Roll Real Estate Development for a 350,000-square foot building within the park. — Roll Global
KERN BUSINESS JOURNAL
June / July 2014
Ask the ‘what if’ questions when buying insurance By John Pryor
ome unexpected pitfalls and traps can arise when you consider insurance protection of your organization’s income – revenue you’ll need in the wake of a serious fire or other major property loss, including an earthquake, of course. For example, destruction of your building will either totally shut down your operations and totally interrupt your income stream; or it will require you to incur major extra costs to keep your operations on-going at an alternate location; or a combination of the two. These conventional coverages are found in virtually every commercial property insurance policy and readily available. That’s all you need to know, correct? Wrong! Business Income insurance includes a “period of indemnity” – the time during which your business is shut down. This is the period during which you receive insurance payments for your loss of profits, plus funding of fixed expenses that continue even though you’re totally shut down. Most insurance companies will make advance payments during the claim adjustment process. Once you’re back in operation, your
sales and revenue will resume, but typically won’t automatically reach their former level. A lag is usually experienced. Therefore, a special endorsement is needed to offset this lag. It permits John Pryor additional payments to you – even after you’re back in operation -until your previous revenue level is reached, or the extension period concludes. Next, basic business income insurance is triggered only when direct damage is sustained by your building. So the question becomes: Are there other insured losses that can curtail -- if not shut down -- your operations and adversely affect your revenue, without any damage to your building? Maybe. What if your building is in a shopping center and one of the center’s anchor stores is so severely damaged that your property is included in the overall area “cordoned off ” by fire and police departments. You’re effectively shut down, but without business income insurance payments because your building is not damaged. Or what if you have a major supplier – or a major customer – whose facilities are
destroyed in a fire or earthquake? You’re no doubt going to sustain a significant reduction in revenue. Remember the tsunami and earthquake in Fukushima, Japan? This supply chain risk created a major production and revenue loss for lots of U.S. firms, whose own operations relied on the manufactured parts or other materials from that part of Japan. Fortunately, specific coverages for these added risks are available if you request one or more of them through your insurance broker. They are usually very affordable. Don’t worry about what any special coverage may be named. Simply explain your situation to your broker, who can provide you a proposal for the extended protection. You’ll be able to enjoy a “quiet night’s sleep” knowing you are covered. This is the goal of sound risk management. John Pryor is a Bakersfield risk management consultant. His new book, “Quality Risk Management Fieldbook,” soon will be published by the International Risk Management Institute in Dallas. The book is written to help business owners, nonprofit executives and public entity CEOs to work more effectively with their brokers to realize the many benefits of a full-range risk management system.
June / July 2014
KERN BUSINESS JOURNAL
Digital solution needed as business cards stack up By David A. Milazzo
READER: When I attend a business conference, I return with a fistful of business cards. But I seldom have time to enter the contact information into my computer’s address book. Can you recommend an app or scanner that would work easily and efficiently on an iPhone and iPad? MILAZZO: Hand-entering contact data is so 1999. There are two approaches to quickly ingesting dozens of business cards. First, purchase a dedicated piece of hardware. You’ll find plenty of card scanners on the market, but some of the best are made by Neat (neat. com). Their products include hardware and software that automate the process of scanning business cards, receipts or any document you can throw at ‘em. You drop in the cards and Neat scans, reads and NEATDesk scanner plops the contact info into your computer’s address book
application. For an extra fee, a team of verification specialists at Neat will verify that the scanned data came in perfectly. For a more “on the go” solution, choose an iPhone app. Check out David A. Milazzo Business Card Reader Pro ($7) on the App Store. Using the iPhone’s built-in camera to snap an image, the card data is quickly processed and a new contact is created ready to be edited and saved. Combined with Apple’s free iCloud service, your new contact will be synced up to the cloud and available instantaneously on all your other devices. Now that’s 2014 for you. READER: I often go online to check news about my industry. When I find a worthwhile article, I want to email it to my employees. However, I frequently
cannot read the spam-prevention “security” code posted with the email prompt. Is there a cut and paste or something I can do? I hate those codes. MILAZZO: The code you’re referring to is called a CAPTCHA; a program that protects websites against automated tasks by requiring tests humans can pass, but computer programs cannot. CAPTCHAs are great for website administrators, but annoying for us humans just trying to share an article. My advice: skip using the buttons on the site all together. Simply highlight the URL — the website address at the top of the window that looks like http://www.site.com/article — and perform a copy. Then create a new mail message and paste the link. Voila! An even faster way is to use the built-in sharing feature found in most modern browsers. Internet Explorer, Safari, Chrome and Firefox have slightly different methods, but they all get the job done. In Internet Explorer 11, you can right-click on a webpage and select “Email with Windows Live.” (This requires a Windows Live account, but most Windows users have one of these already.) In Safari you’ll find a “Share” button in the toolbar that will give you a list of ways to share the webpage: email, Facebook, Twitter, etc. Both Chrome and Firefox offer an
“Email page” choice from the File menu. Any of these will spawn a new email message for you and plop the website address into the body of the email — ready to send. READER: My business requires me to take clear photographs, sometimes from a distance, and text them to clients. The lens on my smartphone is not sufficient. How can I text a photo I take with a camera? MILAZZO: Eye-Fi Mobi (eyefi.com) is a SD memory card very similar to the one stuck in your stand-alone camera right now. But in addition to the gigabytes of storage, the Mobi has an extra feature: a built-in wireless radio. Using this special SD card, coupled with their free iOS or Android app, your camera images will wirelessly transfer directly into your smartphone — ready to text, upload or post on Instagram. Do you have a technology question? Email your question to kbj@macroscopic. net. David A. Milazzo is the founder and principal of Bakersfield-based Macroscopic, an Apple enterprise technology consultancy focused on bringing Mac and iOS technologies to businesses, schools, agencies, and independent professionals.
KERN BUSINESS JOURNAL
June / July 2014
Flexible workplace: Easier said than done By Holly Culhane
y 2020, an estimated 46 percent of U.S. workers will be Generation Y, or Millennials, people born between the early 1980s and early 2000s. The U.S. Census Bureau predicts this group will grow to 75 percent of the workforce by 2025, which means companies of all sizes will be competing for these workers. Companies now are being told that they should be making their workplaces “Millennial friendly.” But what does that mean? Millennials use technology to communicate, socialize and work. Their environment should support this whenever possible. They’re generally collaborative and resist being boxed into tall cubicles. But most of all this generation works hard and guards its free time. Flexible working hours and a relaxed working environment are desired. Millennial Branding, a Boston-based Gen-Y research and management consulting firm, recently reported 45 percent of the Millennials it surveyed will choose workplace flexibility over pay. So what does “flexibility” look like and how should company managers offer such benefits to the new wave of workers they hope to recruit and retain? Many workplace observers are predicting that 9 to 5 jobs may soon become a relic of the past. Millennials will set their own hours, have untraditional start- and end-times, and work
from home. But Yahoo’s recent experience shows that making such a “loosely arranged” system may be easier said than done. When Yahoo hired a new CEO, she quickly curtailed telecommuting when she discovered the need for “more face time” and increased supervision in order Holly Culhane to make improvements at the technology company. Factors to consider when making a company’s workplace more flexible: Determine company needs. First and foremost a flexible schedule must meet the company’s needs – production schedules, hours of operation, collaborative work arrangements, etc. It is commendable to accommodate an employee’s personal needs and desires, but foolish if the accommodation jeopardizes the company’s profitability and well-being. Maintain equity. A flexible system should be free of favoritism -- in reality and perception. Workers granted flexible schedules should not be seen by their peers as opportunistic. Managers who allow such arrangements should not be seen as acting preferentially toward a person or group. Plan details. Before approving any flexible arrangements, develop a written plan that identifies specific jobs and departments that will be included, and the types of arrange-
ments that will be considered. Don’t approach flexibility on a piecemeal, ask-and-you-may-receive basis. Test the plan. Before taking “flexibility” company-wide, test it out in one department. Work out the bugs. Pilot programs are great opportunities to learn early in a new process. Explain the plan. Let all employees know about the opportunities, what will be required of them and how their productivity will be evaluated. Not all employees will embrace flexibility. Not all employees will be temperamentally suited for these arrangements. The choice of who will participate must remain the company’s. But employees should believe that they all will be considered. Train managers. Flexibility could include telecommuting, or working untraditional hours, after managers have gone home. Will that arrangement work effectively for both the manager and the employee? How will managers and workers communicate? How will meetings be conducted? How will productivity be measured? With proper preparation, flexible workplaces can benefit both a company and its employees. It’s important to remember, though, to think through the long-term effect before implementing such a plan. Holly Culhane is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website www.PASassociates.com and through the P.A.S. Facebook page.
June / July 2014
KERN BUSINESS JOURNAL
Planning for Retirement
Annuities are not always wise investments By Steven Van Metre
here’s no such thing as a “free lunch.” There is always a “catch.” But you can’t tell that to one of my clients, who I will call Jim. Jim was recently invited to a “free” seminar dinner, where he was told he would learn about retirement investments. What he received, instead, along with his tasty steak, was a hard-to-swallow annuities sales pitch. The dinner’s host, a financial advisor, promoted the latest “hot hybrid annuity.” The advisor was light on the plan’s details, but he spoke about how this annuity tracked a commodities “bucket,” had a big upfront bonus and would give my client a very high payout. Fortunately Jim did not sign up for the annuity. Instead, he offered me a challenge: Beat this annuity using investments with guaranteed income. I was able Steven Van Metre to come up with three ways to beat the income he was promised at the dinner. But I also carefully reviewed the “hot hybrid annuity” being promoted. I explained to my client that the commodities index tied to the annuity has never made money or credited one penny of interest to a client’s policy, despite the advisor’s claims of high returns. The basis for the advisor’s recommendations was the high commission – about 7 percent – that the advisor would receive. In fact, it would fetch the advisor over $21,000 in
commissions and leave the client with little flexibility. An alternative that the advisor never shared was to use a “single premium immediate annuity,” or SPIA, that would offer Jim a higher income guarantee for less money. With the money he saved, he could get more income by putting it all into the SPIA or by putting the “saved money” into another annuity, where it could grow and be used later in life. Jim wondered why the other agent never mentioned a SPIA. I told him the truth: Most advisors don’t, because
the commissions are 50 percent to 75 percent less than they would be with the “hot hybrid annuity.” Annuities are not for everyone. Generally people with pension plans, or with the ability to assume some investment risks may not find annuities useful. And not all annuities are alike. They mostly fall into two categories – variable and fixed-income annuities. But there are big differences even within these two categories. That is why I tell clients and students in my retirement planning classes to do their homework. They should ask: • How does the annuity work? Some have really long contracts, with payouts decades into the future. Is there a penalty – and how much -- for taking money out early? • What are the fees? It’s a “red flag if the fees associated with an annuity are greater than 4 percent. • What is the insurance company’s rating? Annuities are underwritten by insurance providers. You don’t want to find out a company went out of business just when you should be collecting your money. Review insurers’ ratings before buying an annuity. • How does an annuity fit into your portfolio? An annuity should be part of a diversified investment strategy. It is unwise to tie up all your money in an annuity. It should be considered a supplement to Social Security, tax deferred retirement funds and other investments. Steven Van Metre is a Bakersfield financial planner who specializes in retirement income strategies and teaches a course on retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College.
KERN BUSINESS JOURNAL
June / July 2014
Desert isn’t so lonely with Internet and SBDC help By Kelly Bearden
heryl McDonald has the desert in her blood. It is where she grew up. And now it is where she has returned to create a thriving business. A native Californian, McDonald spent most of her formative years living with her family in the eastern Kern County city of Ridgecrest. After high school, she earned an associate of arts degree from Cerro Coso College and then moved to Southern California to continue her education in art and interior design at Long Beach City College and California State University, Long Beach. A career in graphic and creative art, and interior and floral design followed until she was drawn back to her hometown by a job loss during the Great Recession of 2009-10 and her inheritance of property in Ridgecrest. “Once I returned, the camera, the desert and the Sierras captured me,” McDonald said during a recent interview. Kelly Bearden “I am happy out here.” While her home is in Ridgecrest, McDonald set up shop in the nearby dusty mining town of Randsburg, population 69. Although Randsburg is a shadow of its former “boomtown” self, when gold was discovered in 1895, the town and its turn-of-the-century buildings are on the “must see lists” of many of today’s travelers. Especially on weekends, the town bustles with busloads of tourists, many of them foreign visitors making their way to Death Valley, and off-road vehicle enthusiasts. McDonald’s gallery, the Butte Street Mercantile, which is the original name of the old adobe storefront, is open on Fridays through
Sundays. In the gallery, visitors will find a wide sampling of the artist’s work, including pencil drawings, watercolors and photographs of area scenes. Also on display and available for purchase are copies of McDonald’s book, “Abandonment Issues,” which is a collection of McDonald’s photographs of things people have left behind in the ghost towns that are scattered around the high desert, east of the Sierras. The book also can be purchased on Amazon for $26.95. Finding her isolated, start-up business faced some unique challenges, McDonald turned to Cal State Bakersfield’s Small Business Development Center for specialized help. “There is a huge amount of traffic made up of off-road vehicle riders and desert campers,” McDonald explained.
“Many of these people come into Randsburg for lunch, or just to hang out. I needed a way for them to buy things from my gallery and for them to be able to take their purchases home. For example, one guy recently bought over $1,000 worth of my photography after riding in on a dirt bike.” McDonald’s SBDC consultant, Jay Thompson, has helped her set up a website [www.cherylmcdonaldcreative.com] where customers can go online to make purchases. She also has expanded her merchandise shipping services and emails a monthly newsletter to keep in touch with customers. In addition to helping her set up business management systems, McDonald says her SBDC consultant has helped her focused on challenges and on finding solutions. “With the Internet, help from SBDC and the connections I have made with area groups, such the Visitors and Convention Bureau in Ridgecrest, I don’t feel all that isolated,” she said. “In fact, being remote has been beneficial, because it is inspiring.” The CSUB-based Small Business Development Center is one of five service centers that make up the UC Merced SBDC Network in California. Partially funded by the U.S. Small Business AdCheryl McDonald ministration, the program’s goal is to create economic growth in communities by providing free consulting services and educational programs. The center at CSUB assists entrepreneurs and small business owners in Kern, Mono and Inyo counties. For more information and to arrange a free consultation, go to www. csub.edu/sbdc. Kelly Bearden is the director of the CSU Bakersfield Small Business Development Center.
Dollars and Sense
Tax benefits available to Kern’s energy sector By Patrick Paggi
ue to its large reserves of oil and gas, and its sunny climate, Kern County is an important producer of energy in California and the nation. As such, there are numerous tax benefits that have been passed by the federal government that benefit industries and companies in Kern County that produce conventional and alternative fuels. Expensing of Intangible Drilling Costs The expensing of intangible drilling costs has been part of the federal tax code since 1913. Intangible drilling costs generally include cost items that have no salvage value, but are necessary for the drilling of an exploratory well, or the development of a well for production. The purpose of allowing current-year expensing of these costs is to attract capital to what has historically been a highly risky investment. In the current law, the full expensing of intangible drilling costs is available to independent oil producers. Since 1986, major integrated oil companies have been able to expense 70 percent of their intangible drilling costs and capitalize the remaining 30 percent over a 60-month period.
Percentage Depletion Allowance Percentage depletion is the practice of deducting from an oil company’s gross income a percentage value, in the current law 15 percent, which represents, for accounting and tax purposes, the total value of the oil deposit that was extracted in the tax year. The purpose of the percentage depletion allowance is to provide an analog to normal business depreciation of assets for the oil industry, in effect equating the tax treatment of oil deposits to the tax treatment of capital equipment in more traditional manufacturing industries. Domestic Production Activities Deduction This tax provision was enacted to encourage the expansion of American employment in manufacturing. The oil industry was categorized as a manufacturing industry, and hence, eligible for the deduction currently at 9 percent. The base of the tax is net income from domestic manufacturing activities, capped by a limitation related to the size of the company’s payroll. The Tax Code limits the rate available to the oil and natural gas industries to 6 percent. However, companies supporting the oil and gas industries are allowed to use the 9 percent rate for qualifying activities. This tax deduction was intended to provide domestic firms an incentive to increase domestic
employment in manufacturing at a time when there was concern that manufacturing jobs were migrating overseas. By allowing a percent deduction of net income, up to the payroll limitation, the effective cost of labor to the manufacturer was reduced. The reduction in net labor cost was intended to expand employment, increase output, and reduce prices, making domestically manufactured goods more competitive in the U.S. and world markets. Solar Investment Tax Credit (ITC) The ITC is a 30 percent tax credit for equipment that uses solar energy to generate electricity, to heat or cool a structure or provide solar process heat for residential and commercial properties. The solar investment tax credit reduces the tax liability for individuals or businesses that purchase qualifying solar energy technologies. Under current law, the ITC will remain in effect through Dec. 31, 2016. The information above is provided for informational purposes only. We recommend that you seek guidance from an experienced tax professional before taking any of the above expenses or credits. Patrick Paggi is a partner in the Bakersfield-based accounting firm of Daniells Phillips Vaugh & Bock.
June / July 2014
KERN BUSINESS JOURNAL
Energy efficiency program brings green jobs to Kern By Leticia Perez
he green economy has arrived in Kern County, and not a moment too soon. Kern faces an unemployment rate of more than 13 percent — well above state and national rates. Our region has struggled since the recent recession, facing not only one of the state’s highest unemployment rates, but also deep cuts in property values and increasing regulations over oil production, one of our area’s main economic drivers. Fortunately, long-term job prospects for our area are beginning to look more promising. Just last month, Kern County introduced a new public-private partnership that has already increased demand for construction jobs, while saving homeowners money and improving property values. The Home Energy Renovation Opportunity (HERO) program leverages private funding to make it possible for property owners to finance energy- and water-efficiency improvements through their property taxes. HERO increases comfort at home, while simultaneously reducing utility bills for participating homeowners. Interest payments are tax deductible and payments can typically be passed on to the homebuyer if the property is sold before the improvements are paid off. When the Kern County Board of Supervisors voted to make HERO available to residents, we imagined a modest benefit for homeowners. We could not have predicted the program’s rapid growth. HERO launched March 10. By the end of April, residents had applied for nearly $1.9 million in en-
ergy- and water-efficiency projects. Work had already begun on the five approved projects, bringing more than $115,000 into the county in just a few weeks. Almost instantly, we’ve witnessed one of the main benefits of having HERO available in our community: demand is created for local contractors to make Leticia Perez improvements that homeowners might otherwise not have been able to afford. This boost in demand for construction jobs is good news for our region, which is finally seeing an uptick in that sector. As of February, there were 18,400 construction jobs in Kern County, an increase of 2,000 — or 12 percent — over the same time in 2013. Given HERO’s early success in Kern, the program is sure to help this important job sector continue to grow. Besides the direct jobs created, the program also leaves more money in the pockets of participating homeowners. With costs of water and energy continuing to rise, property owners who invest in efficiency typically see their utility bills go down. By reducing financial pressures on local homeowners, HERO makes it possible for these residents to invest their hard-earned money in other home improvements or to spend more on dining out, entertainment and durable purchases, like new cars and appliances. People who invest in improving the efficiency of their homes also reap a bonus in property value. A report by the Oregon-based Earth Advantage Institute shows that homes
certified as energy efficient sell for us much as 9.6 percent more. They also sell an average of 18 days faster than similar inefficient homes. Ultimately, HERO financing could play an important role in improving property values throughout Kern County, something that benefits both public coffers and personal wealth for local residents. All signs point to the fact that investments in efficiency are here to stay. Nationwide, the solar installation industry adds 20 percent more jobs year-over-year. In 2013, 70,000 people were employed installing solar panels. In our sunny region, incentives, like the HERO program, mean that we should see sustained growth in renewable energy for the foreseeable future. Between California’s extended drought and ongoing state and federal incentives to invest in renewable energy, like solar panels, and efficiency measures, like drip irrigation, insulation and efficient windows, Kern County residents have good reasons to improve efficiency at home. The easy financing available through HERO, which relies on home equity, rather than personal credit, is making it possible for homeowners to actually make those investments. With HERO, we hope to stimulate the economy, create jobs, bring money into the community and improve local property values. The program’s strong start shows us that we’re moving in the right direction. Adopting HERO is one of the best investments in our region’s future that we’ve made in a long time. Leticia Perez is chairwoman of the Kern County Board of Supervisors.
KERN BUSINESS JOURNAL
June / July 2014
We can’t build out way out of future traffic congestion By Donna Carpenter
hen it comes to transportation projects, the future in California isn’t going to look like the past. Ever-widening highways and streets, one-person-per-car traveling to and from work each day, empty buses, hardly a bicyclist or pedestrian on the road. These are the vestiges of an antiquated transportation system that for a variety of reasons cannot and will not continue. A new, 26-year transportation plan now circulating for public comment acknowledges that fact by shifting hundreds of millions of dollars from traditional capital construction projects to other transportation modes: bicycle paths and lanes, sidewalks, express bus service, passenger rail, a much heavier emphasis on road maintenance and operations. Kern Council of Governments’ 2014 Regional Transportation Plan (RTP) acknowledges that there won’t be enough funding to keep up business as usual and that even if we could build our way out of traffic congestion, we won’t be able to maintain it all. Designed to include any projects that rely on federal funding, the RTP balances roadway expenditures for continued economic vitality with a common-sense approach to future development, incorporating more transit service and bicycle and pedestrian infrastructure to go along with it. For example, the plan increases the number of homes within walking distance to quality transit. By integrating land use and transportation, 71 percent of all homes will be near quality transit versus 57 percent under the old plan. Tomorrow’s network will be a bustling array of transportation options that will value and maximize diversity. Smart cars will provide a more consistent distance between and among vehicles in traffic, thereby increasing roadway capacity. A quick glance at your wristwatch will give you access to route information and travel times for better decision-making.
On-demand carpooling, bike-sharing and a host of other innovations will make our existing infrastructure more efficient and sustainable over the long term. The Regional Transportation Plan envisions all this, as well as ways our transportation system can help improve overall community health, such as a 5 percent reduction in health-related expenditures because of improved air quality and by promoting more active transportation, such as bicycling and walking. To be sure, we’ll still have highways and we’ll still have to lengthen and widen them. The difference is that more and more of our road capacity will be dedicated to moving freight, with a premium on what remains. Heavily congested corridors may see relief through toll lanes with dynamic pricing structures that vary depending on how heavy traffic is at the moment. Ramp meters, already going up Donna Carpenter in Bakersfield, will regulate how quickly you’ll be able to get on the freeway thereby easing congestion. Money (specifically the lack of it), will necessitate many of these changes. Fuel taxes, which have been stagnant for nearly 20 years, continue to decline in value as inflation erodes their buying power. Wholesale proposals for alternative user fees, such as an odometer-based tax or toll roads, are met with skepticism or derision on a national level. At the same time, air quality concerns demand that the transportation sector accept responsibility for its fair share of pollution, which is approximately 40 percent of the entire problem. Business and industry have already been regulated heavily to squeeze out inefficiencies in the production process such that nothing more is to be gained, barring greater advances in technologies. Knowing all this, environmental interests and the state of California have turned their regulatory eye toward transporta-
Navy enters partnership to market inventions
By Margo Allen
he Naval Air Warfare Center Weapons Division has entered into a partnership with a Bostonbased technology capital investment firm that will help facilitate the development and transfer of military technology for commercial use. The partnership between the Weapons Division and Allied Minds Federal Innovations will help identify potential uses for military technologies in commercial applications, as well as facilitate further development of those technologies in commercial markets. “A few years ago, NAWCWD put new emphasis on documenting its technical innovations and being more business wise in creating value, beyond the apparent military value, from its intellectual property,” said Scott O’Neil, the Naval Air Warfare Center Weapons Division’s executive director. O’Neil noted that the Weapons Division’s
“patent portfolio is huge and the number of new patent disclosures filed annually continues to grow. It is good for the U.S. taxpayers, who underwrite the government’s research agenda, and the Navy to identify those patents that have commercial viability and to aggressively support the utilization of those inventions for the greater good.” O’Neil predicted the Navy’s partnership with Allied Minds Federal Innovations can create the added value. In 2011, President Obama requested that both the federal government and the private sector increase the prevalence and success of entrepreneurs across the country. He issued a presidential memorandum that communicated the need for the U.S. Department of Defense to increase the rate at which it transfers technologies to the private sector for commercialization. Through public-private collaboration, Naval Air Warfare Center Weapons Divi-
tion as the next frontier for pollution reduction. Landmark environmental legislation that requires cutting pollution down to levels last seen in 1990 has been embraced on a statewide basis, forcing local governments to rethink the way they plan for urban growth. In the very near future, sprawling development on the urban fringe will come with a much heavier price tag as cities and counties struggle to keep up with maintaining sewer, water, roads, police, fire, libraries and other services to the outermost parts of their jurisdictions. For all these reasons and others, Kern COG’s 2014 Regional Transportation Plan and several of the agency’s other documents propose a sharp move away from what prior expenditure plans have recommended, including: • A heavy emphasis on maintaining, fixing and finishing what we have, reflected in a funding proposal that recommends considerably more money for maintenance. • A 700 percent funding increase for bicycle and pedestrian facilities over the last version. • Improvements to mobility and congestion relief through strategic investments. Kern COG’s Board of Directors is scheduled to adopt the plan this month after four years of public input and testimony from more than 8,000 Kern residents. From there, the plan will need to be approved at the state and federal levels before it can be implemented. A shorter-range document that programs funding for projects three- to five years in advance is also being considered. I encourage everyone to take the time to at least read the document’s executive summary so that you may better understand the opportunities and constraints we’re likely to face as we travel into the future. The report can be found at www. kerncog.org/regional-transportation-plan Donna Carpenter is the chairwoman of the Kern Transportation Foundation and is a senior associate with Stantec, a planning, engineering and architecture consulting firm.
sion personnel will work with Allied Minds Federal Innovations to improve the results of technology transfer and commercialization activities. “The pairing of NAWCWD’s substantial intellectual property portfolio and technical expertise with AMFI’s capital resources and commercialization know-how is expected to yield numerous benefits for both organizations, while improving the economic impact of federal investments in research and development,” said Dylan Riley, the Weapons Division’s innovation director. The benefits for the Naval Air Warfare Center Weapons Division will include: the influx of commercialization expertise and start-up experience that the private partner can provide; and the opportunity to maximize the value of Weapons Divisionproduced intellectual property into the incorporation of new U.S. companies and opportunities for licensing intellectual property produced at the Weapons Division. The benefits to Allied Minds Federal Innovations will include: the opportunity to access intellectual property across multiple installations within the Defense Laboratory Enterprise; the connection to Weapons Division-produced intellectual property and
scientific community; and the opportunity to seek exclusive licenses for the commercialization of background and subject inventions. The Naval Air Warfare Center Weapons Division has a history of developing technologies that are used commercially. For example, the chemiluminescent light stick was developed by Weapons Division personnel between 1962 and 1986 for military use as emergency lighting in the field. Today, this technology is found worldwide in objects, such as novelty items, safety kits and fishing lures. Stop-action video was originated in 1975 by Weapons Division test range personnel to provide stop-action images of high speed video test events. This technology soon transferred to industry and is used in sports broadcasts. Naval Air Warfare Center Weapons Division and Allied Minds Federal Innovations “have been working long and hard to get this partnership in place,” O’Neil said. “AMFI’s business model, expertise and experience are critical for the success of our intellectual property strategy.” Margo Allen works in the public affairs office of the Naval Air Warfare Center Weapons Division at China Lake in eastern Kern County.
June / July 2014
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
ce i v r l Swe. l o r ay out ho P E E to find R F t Ge Call
June / July 2014
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Published on Jun 4, 2014