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KERN Journal Business

Vol. 2, No. 4

Cover story

Shale ‘promise’ triggers jobs, economic boom

Training workers for Kern’s oil fields Page 16

August/September 2013

Oil & Gas Issue

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or more than a century, Kern County men and women have given their blood, sweat and tears lifting oil from deep underground reservoirs. The oil industry has sustained Kern’s families and fueled the local economy. Today, California follows Texas and Alaska as the nation’s third largest oilproducing state. “Seventy percent of the oil and 64 percent of the natural gas produced in California comes from Kern County, making it the largest producing county in the state, by far,” reports Kern County Assessor Jim Fitch, predicting “this trend will continue for the extended future as Kern County plays a significant role in the production of petroleum products.” Fitch is referring to the promise of vast returns from oil locked in the hard-to-reach Monterey Shale, which underlies California’s Central Valley and Kern County. Already the “promise” has spawned an economic and employment boom. New technologies are unlocking vast reservoirs of oil in other parts of the nation. Many believe California’s Monterey Shale production will dwarf those in Texas, North Dakota and Pennsylvania. But with the “promise” has come controversy. Advanced production techniques, particularly the use of hydraulic fracturing, have triggered calls for legislative controls. The August issue of the Kern Business Journal showcases Kern’s oil and gas industry, exploring its past and its future. --Kern Business Journal

Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302

Bakersfield Californian file photo

For more than a century, Kern County men and women have spent their blood, sweat and tears lifting oil from deep underground reservoirs.

Housing market picking up steam

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akersfield is on track to mark its biggest homebuilding year since 2007. By mid-year, the city’s Community Development Department reported issuing 627 single-family home permits in 2013. Last year, the mid-year total was 514, with 1,096 permits issued for all of 2012. In 2007, during the peak of the building

Presorted Standard U.S. Postage PAID Bakersfield, CA Permit No. 758

boom, the city issued permits for 1,842 single-family homes. Real estate broker Scott Tobias, with Bakersfield’s Prudential Tobias Realtors, credits the spike in permits to an existing shortage of inventory. The surge in new home construction is good for builders, good for construction workers “and it’s positive for homebuyers because there is

INSIDE Obamacare delay......................................4 Oil’s worth................................................4 Monterey Shale potential...........................6 Fracking debate.........................................7 Valuing oil’s past.....................................12 Solar, oil combine....................................24 Navy’s alternative fuels............................26

something to buy.” Appraiser Gary Crabtree, who publishes local market analyses, predicted Bakersfield’s current pace of homebuilding will continue “as long as the existing inventory, or the supply, remains low.” Also mid-year, the median home price in Bakersfield continued to rise – 3.7 percent in June, or $7,000 to $195,000. That’s a 35 percent increase over June 2012. Realtors reported a tight supply continued to fuel bidding wars, with the average number of days on the market being 13. Few homes on the market are lender-owned or “short sale.” --The Bakersfield Californian

Butt out of genes....................................31 Helping veterans.....................................33 Retiree’s invention...................................35 Risk: read find print.................................37 Aera helps Gleaners................................38 Pyles Boys Camp.....................................38 Bike to work............................................40 Focus on ‘wellness’.................................42 Texas hankers for jobs.............................44 Manage your brand..................................50


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Journal KERN Business Showcasing Kern County business and industry Vol. 2, No. 4 Aug./Sept. 2013 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 kernbusinessjournal@gmail.com To advertise and subscribe mpatel@bakersfield.com Mira Patel 395-7586 Follow on Facebook Facebook.com/ KernBusinessJournal Follow on Twitter @kernbiz

KERN BUSINESS JOURNAL

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Dianne Hardisty

In Kern, oil industry part of everyday life

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o get a sense of how entwined the oil industry is with the everyday lives of Kern County residents, drive down some of Bakersfield’s main streets. You will find an oil pumper moving up and down next to a popular Mexican restaurant. Another is sucking oil from under a church parking lot. These are familiar sights throughout Kern County. In the century since big gushers announced a find by spewing oil into the air, a mostly peaceful co-existence has been reached. Oil rigs are accepted as part of our lives. Bakersfield physician Dianne Hardisty Patrick Leung, a gifted amateur photographer, portrayed this co-existence in photos he shot for a Levan Institute for Lifelong Learning class at Bakersfield College. “As the city of Bakersfield has grown in the last few decades, it has expanded into the oil fields,” Leung noted in an email he sent to the Kern Business Journal. “It is a challenge to the planners to assimilate the oil fields in the urban development. “There are quite a number of oil pumps in operation along California Avenue, between Oak and Stockdale Highway. Instead of being eyesores and out of place, they have become part of the urban landscape … pleasant and

Photo courtesy of Dr. Patrick Leung

Office towers on California Avenue loom over an oil pumper in a nearby parking lot.

unusual art.” Accompanying this column is one of Leung’s photos. He used the high-dynamicrange (HDR) technique he learned in the class to capture Bakersfield’s urban landscape – showing business office towers on California Avenue looming over an oil pumper in a nearby parking lot. Kern’s oil industry is on the threshold of a new boom – possibly as dynamic and lifechanging for the area’s residents and economy as the “big oil gushers” of the past. Already the excitement is being felt in the new jobs

and businesses that are flooding into Kern. Predictions that advanced extraction methods can tap the hard-to-reach Monterey Shale below Kern County are fueling this excitement. The question facing energy producers, government regulators and residents: Will coexistence continue? The August issue of the Kern Business Journal explores the past, present and future of Kern’s oil and gas industry. Dianne Hardisty is the editor of the Kern Business Journal.

Business at-a-glance Rendering courtesy of CSUB

The outlets project, unveiled in May 2012, will feature 500,000-square feet of leaseable space and more than half a mile of frontage along Interstate 5, at the foot of the Grapevine. Tejon is partnering on the project with the New York-based Rockefeller Group Development Corp. Grading at the site began May 15. Tejon Ranch hopes to deliver spaces to retailers after the start of next year. Specific tenants have not been announced. — Kern Business Journal

The Art Center at California State University, Bakersfield is expected to be completed next year. CSUB, BC building multi-million complexes California State University, Bakersfield, and Bakersfield College broke ground this spring on the construction of multi-million dollar complexes on the two campuses. At CSUB, construction of a $19 million Art Building, and the expansion of the campus’ sewer and cooling systems has begun. Planning for the Art Building began about a decade ago and preliminary designs were drawn up in 2006. But a lack of funding put the project on hold. The project finally received approval in 2012 and funding through lease revenue bonds. At BC, work has started on a $14.6 million renovation of the college’s 30,290-square-foot Performing Arts Building. Originally built in 1956, the complex is one of the oldest on the northeast Bakersfield campus. Funding for the project comes from state bond money and proceeds from the community college capital bond Measure G. Plans include converting an auditorium and classroom building to a performing arts center with a new entry, lobby and reception

area; upgrading air circulation; remodeling the 450-seat theater with stadium-style seating; and creating a smaller 100-seat “black box” theater, music studios, and upgraded office and classroom space. An outdoor amphitheater will be retrofitted with a covered stage and shade structures, as well as updated technology. Both projects, which are expected to be completed in 2014, highlight building booms on the two campuses. Earlier this year, the 5,000-square-foot two-building engineering complex and the 1,500-square-foot Kegley Center for Student Success opened at CSUB. The university also announced a new three-building dormitory complex will be built. --Kern Business Journal Outlets at Tejon Ranch opening date set for May 2014 Lebec-based Tejon Ranch Co. has announced that construction on The Outlets at Tejon Ranch is expected to begin around the end of this summer, with an opening date tentatively set for Memorial Day weekend 2014.

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. — The Bakersfield Californian Rooftop solar projects nearing state’s 2016 capacity goal

Photo courtesy of ARES

The California Public Utilities Commission has announced that its California Solar Initiative, which promotes rooftop solar power generation in the state, has reached two thirds of its target, and is well on its way to meeting its goal of

installing 1,940 megawatts of solar capacity by the end of 2016. According to the CPUC’s annual report, the program has backed the installation of rooftop solar at 167,878 “customer sites” -- rooftops, parking structures and other locations – which adds up to an estimated 1,629 megawatts of power generating capacity. All of the projects included are under 1 megawatt in capacity, and 94 percent of the rooftop generating capacity is enrolled in utility net-metering programs. The figures do not include utility-scale solar projects that sell power directly to the grid. It also constitutes solar power capacity that is above and beyond what utilities are obligated to buy under the state’s Renewable Portfolio Standard law. The CSI, the largest rooftop solar program in the U.S., began in January 2007 as part of the state’s overall initiative to build 3 gigawatts of solar power generating capacity in California. The CSI program covers installations on both residential and commercial properties.

Advanced Rail Energy Storage is testing an energy storage system near Tehachapi that uses “old fashioned” rail technology. Experimental energy storage project underway near Tehachapi Just outside Tehachapi, in the heart of Kern County’s wind power region, Santa Barbara-based Advanced Rail Energy Storage is testing an energy storage project that combines century-old railroad technology with green-style innovation. The company has begun running a specially designed locomotive up and down quarter-scale railroad tracks in a project that uses gravity,

Photo courtesy of the NWC China Lake

The Naval Air Weapons Center at China Lake is home to seven sets of photovoltaic carports.


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Obamacare mandate delay: What does it mean? By Brandie Gasper

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he Obama administration announced on July 2 it will delay the enforcement of the employer mandate until 2015. This announcement provides another year of transition relief to large employers otherwise subject to the portion of the Affordable Care Act that requires such employers to provide health care coverage to their employees or pay a tax penalty. Many employers are wondering what this change means to them. The answer is that employers will have more time to plan for the employer mandate. The employer mandate affects two Brandie Gasper types of employers: those that do not offer coverage and those that offer insufficient coverage. Insufficient coverage includes failing to offer affordable coverage, meaning your employees must pay over 9.5 percent of their income toward the cost of their premiums. These employers now have more time to consider whether to provide coverage or pay the penalty; whether to change contribution rates to meet the affordability requirements; and whether to impose measurement periods for determining eligibility for coverage. Importantly, the announcement delays only the employer mandate. That means that the other requirements imposed on employers because of health care reform remain in place. These requirements include reporting the cost of health care coverage on W-2s, providing notices to employees about the exchange, and complying with the new waiting period requirements. The delay also does not affect the requirement that individuals obtain coverage or pay a penalty, beginning in 2014. Many individuals will go to the exchange to obtain their health insurance. Through the exchange, an individual may qualify for a cost-sharing reduction or tax credit toward the cost of coverage. But an employed individual will only qualify for a cost-sharing reduction or tax credit if his or her employer fails to provide coverage or provides insufficient coverage. The exchange will verify an individual’s statements about employer-sponsored coverage with the individual’s employer by sending verification requests to the employer. Therefore, employers should still expect to receive these verification requests in 2014, despite there being no penalty imposed on employers for failure to provide sufficient coverage that year. But receipt of the same verification requests in 2015 will mean the possibility of a tax penalty. Employers that do not offer coverage or that have questions about whether their coverage is sufficient should use this opportunity to further develop and implement their response to the employer mandate. Employers should also track the hours of those employees not eligible for health care coverage that average close to 30 hours per week. All employers should remain alert about the other Affordable Care Act requirements that may impact them. Brandie Gasper is an attorney with Klein DeNatale Goldner in Bakersfield.

Photo courtesy of Ed Kreiser

Crude oil and refined products provide millions of tax dollars to Kern County’s coffers. The lights from San Joaquin Refinery in Bakersfield reflect off a nearby canal.

Value of Kern’s oil must make dollars and sense By Jim Fitch and Lee Smith

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etroleum products have been useful to the inhabitants of California since the beginning of time. Early Native American tribes, such as the Yokuts, would line their baskets with oil and cement natural fibers with asphalt to make paint brushes, all from naturally occurring oil seeps. These seeps could be found on the surface or just below the surface. As settlers from all over the world began to populate California, these same seeps were used to produce lubricants and illumination liquids. Oil was first discovered in the Kern River field in 1899 and by 1904 the field was producing 17.2 million barrels of oil per year, making it one of the largest fields in the country at the time. Today, California follows Texas and Alaska as the nation’s third largest oil-producing state. North Dakota is fourth and has greatly increased its production over the last decade as it develops its shale production. Most of California’s production is consumed in the state. However, it represents only about a third of the petroleum products consumed by California’s residents. The remaining two thirds is imported from around the globe. Seventy percent of the oil and 64 percent of the natural gas produced in California comes from Kern County, making it the largest producing county in the state, by far. It is anticipated that this trend will continue for the extended future as Kern County plays a significant role in the production of petroleum products. The state’s oil production peaked in 1985 with a production of 350 million barrels. Since then, production has steadily declined to today’s level of 185 million barrels. It is anticipated that production will continue to decline from these currently known fields for the extended future. However, recently, there is interest in employing the use of fracking technologies and new drilling techniques to unlock additional new reserves in a formation in the San Joaquin Valley, known as the Monterey Shale. This deposit, which is similar to other shale deposits in the United States and Canada, has the oil industry hopeful for a renewed oil boom in California. However, it may take some time before the benefits of the Monterey Shale are fully known and realized. Petroleum assessments and taxes play a significant role in the funding of Kern County’s public sector. The county, cities and local schools are just a few of the groups that benefit from the revenue generated by petroleum production and investment made by operators in Kern County. In 1981, Kern County’s “oil roll” was $11.5 billion. Today, that has increased to $29.5 billion. While there has been an increase in Kern’s oil assessments, the percentage it plays in Kern County’s entire roll has declined. In 1981, Kern’s oil roll represented 53 percent of the county’s assessments. Today, that has decreased to its current level of 33 percent.

The right to find, extract and sell petroleum is an assessable property right in California. Assessors have been valuing and assessing petroleum properties as long as there have been property taxes in California. Over time, appraisal techniques and regulations have changed the way the assessor performs his duties. The greatest change to property taxation in California was the passing of Proposition 13 in 1978. Proposition 13 switched the state’s market value approach to property taxes to an acquisition based approach. Petroleum properties are valued each year, and a current-market value and factored-base year value are determined. The lower of the two values is enrolled on the assessment roll and property taxes are based on that assessed value. Therefore, petroleum properties, much like other properties in the state, receive protection under Proposition 13. Approximately 89 percent of Kern’s oil roll is assessed at its base-year value and receives Proposition 13 protection, while the remaining 11 percent is valued at its current-market value. Companies that produce petroleum products are known as operators. These operators are required to file an annual property statement with the county. In the property statement information, such as production, equipment, expenses, reserves and new construction are reported to the assessor. Often additional information is voluntarily provided by the operators to further assist the assessor. This information can include field forecasts, development plans and product pricing projections. All of this information is then used to aid the assessor in developing his appraisals and base-year calculations. In addition, as part of the appraisal process, the assessor must forecast oil and gas prices into the future. This operation has changed over the years and has developed into an analysis of the futures market, historical pricing, company data and institutional reports. The appraisals are typically the result of an income-approach to value. The appraiser determines the future income the property will produce over its life. This income stream is discounted into a present-value calculation, which then indicates the currentmarket value of the subject property. Taxpayers regularly challenge the assessor before the local appeals board. Some of these appeals can be very significant and may involve millions of tax dollars. Occasionally, these challenges are not resolved at the local appeals board level and require a decision from the courts, which can change or establish property tax law. The assessor willingly commits a great deal of time and financial resources to the appeal process, with the goal of achieving a fair valuation for the citizens of Kern County.

Jim Fitch is Kern County’s assessor. Lee Smith is the department’s chief appraiser.


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KERN BUSINESS JOURNAL

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Tapping the Monterey Shale

Engineers, economists assess Monterey Shale potential tion of oil and natural gas. Why are these trends relevant to California? Simply put, California boasts perhaps the largest deep-shale reserves in the world—and hence the greatest potential for deep-shale development. Those reserves exist within the Monterey Shale Formation, a 1,750-square-mile swath of mostly underground shale rock that runs lengthwise through the center of the state, with the major portion of the formation lying within the San Joaquin Basin. The U.S. Energy Department estimates that the Monterey Shale contains more than 15 billion barrels of oil, accounting for approximately two-thirds of all the shale-oil reserves in the United States—and up to 50 percent more oil reserves than those that lie off California’s coast.

By Kevin Hopkins

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recently released study by the California-based Communications Institute, “Powering California: The Monterey Shale & California’s Economic Future,” examined an issue of increasing importance to all Californians, particularly those living in the Central Valley. It is the role that development of oil from California’s Monterey Shale can play in California’s economic future. California’s Monterey Shale Formation contains vast reserves of oil. This study presents a preliminary examination of one important aspect of developing that resource—the economic impact on the California state economy. Working from an economic model created by economists and petroleum engineers from the University of Southern California Price School of Public Policy and the USC Global Energy Center, the study concluded that “the prudent development of the Monterey Shale could add hundreds of thousands of new jobs to California over the next decade, while stimulating economic growth and generating significant new state and local tax revenues.” Given the economic challenges that California has faced in recent years, this new source of oil could not be emerging onto California’s energy picture at a more opportune time. Of course, California has long served as the incubator for innovative alternative energy technologies, and the state has taken advantage of both these advances and its bountiful natural resources to become a leader in the generation of renewable power. Now, these same technological and resource advantages can enable the state to return to leadership in another key energy field: the production of oil. Increasing California’s oil production, however, might seem an unlikely prospect in view of historical production patterns. According to the California Energy Commission, California’s crude oil production fell by 47 percent between 1985 and 2010, and offshore production fell by more than half. As a result, energy imports into the state rose by more than 70 percent during this same period, draining the state of as much as $30 billion in revenue that flowed out of the state each year. And yet evidence is mounting that California’s energy future does not have to be governed by its past. The recent experience in several other energy-producing states is particularly instructive. North Dakota, South Dakota, Wyoming, Pennsylvania, Ohio and Texas are all witnessing powerful economic revivals stimulated, in large part, by a boom in oil and gas production within their borders. In North Dakota, for example, as oil production soared from 200,000 barrels per day in 2008 to more than 750,000 barrels per day in 2012, the state’s gross domestic product grew by an annual average rate of 6.7 percent for the years 2008 to 2011—the nation’s fastest growth rate. And the state’s unemployment fell to 3.2 percent —the nation’s lowest. In addition, the state is projected to run a $1.2 billion budget surplus this year, a marked contrast to the mounting budget deficits at the federal level.

The Potential Economic Impact

The Bakersfield Californian

All the talk these days seems to be about tapping the vast Monterey Shale formation below Kern County. But oil producers in “traditional fields” are still going strong.

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. In 2011, 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

The Promise of the Monterey Shale A key reason behind the North Dakota energy boom has been the extraction of oil and gas deposits from deep-shale reserves— specifically, the Bakken Shale Formation— primarily through advanced oil-extraction technologies, such as horizontal drilling and hydraulic fracturing. These advanced extraction techniques, in fact, underlie inde-

pendent forecasts of an oil and gas production boom set to take place throughout the United States during the decades ahead. For instance, in its World Energy Outlook 2012, released in November 2012, the International Energy Agency projected that, by 2035, the United States would become 97 percent energy self-sufficient in net terms— a sharp reversal from historically persistent U.S. import-dependency—in large part due to the surge in advanced-technology produc-

Facing this potential, the USC researchers asked: What would be the economic impact of the production of oil from the Monterey Shale? The research team employed sophisticated economic models to determine the likeliest potential consequences of shaleoil development on California’s economy. While these estimates should be considered only preliminary gauges of the Monterey Shale’s economic potential at this point, the direction of the effect is clearly positive. The study concluded that development of the Monterey Shale could: Create more jobs. Developing oil from the Monterey Shale could add from 512,000 to 2.8 million new jobs in California, depending upon the year. Stimulate economic growth. Total economic activity in the state, as measured by the state’s gross domestic product (GDP), could increase by 2.6 percent to 14.3 percent on a per-person basis. Increase personal income. On a statewide basis, aggregate personal income could grow by an average of from 2.1 percent to 10.0 percent. Boost government revenue. Tax revenue collected by California state and local governments could grow by $4.5 billion to $24.6 billion per year. These numbers should be encouraging to all Californians, and particularly to those living amid the economic challenges that have burdened the Central Valley in recent years. For as the experience in other states demonstrates, the development of their indigenous shale-oil reserves has resulted in significant increases in regional employment, incomes and government tax revenues. The current study suggests that, through the prudent and carefully regulated development of the Monterey Shale, the state of California also could achieve proportionately large increases in the production of crude oil that could lead to similarly large economic gains. And because most of those shale-oil reserves would be developed right here in the Central Valley, residents of the valley stand to gain perhaps the most economically as a result of the development of oil from the Monterey Shale. Kevin Hopkins is the director of research for The Communications Institute, a California-based public policy research center.


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Raising the standards Hydraulic fracturing for natural gas 1.

A well is drilled horizontally thousands of feet below the surface. 2. More than a million gallons of water is delivered by trucks, which is mixed with sand and a combination of chemicals that breakdown the shale. A pump truck injects the mixture, under pressure, down the well. Pump truck

4. Natural gas flows out of the well and is stored in holding tanks.

5. Waste water is stored in open pits and then taken by truck to a treatment plant.

with vast and valuable expertise.

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Hydraulic fracturing long used to produce oil in Kern County By Tupper Hull

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ydraulic fracturing has been in the news recently in connection with increased oil and natural gas production across the United States. While the technique may seem new to the public, in fact hydraulic fracturing has been used for more than 60 years throughout the oil and gas industry, including in California. California’s economy runs on fossil fuels. Despite significant growth in the numbers and types of alternative and renewable fuels, 96 percent of the transportation fuels in California are derived from petroleum. Natural gas provides almost one-third of the state’s total energy needs. Forty percent of the electricity used in California is generated using natural gas. Hydraulic fracturing is a safe and wellunderstood technology used in California for decades to enhance the recovery of the state’s prolific petroleum resources. These resources contribute in significant ways to the state’s economy, jobs and energy supply. Some 21,000 California jobs are linked to the production of oil and natural gas, and half of those jobs are in the San Joaquin Valley. During the decades it has been used, hydraulic fracturing has never been shown to adversely impact the state’s environment, drinking water supply or pose any risk to nearby residents. In fact, according to the U.S. Environmental Protection Agency, there has not been a documented case of a hydraulic fracturing operation contaminating drinking water anywhere in the United States. In 2012, California oil companies conducted some form of hydraulic fracturing operation on 568 wells, according to reports submitted to the FracFocus website.

What is hydraulic fracturing? Hydraulic fracturing is one of many energy production techniques used to obtain oil and natural gas in areas where those energy supplies are literally trapped in “tight” rock and sand formations. Once an oil or natural gas well is drilled and properly lined with steel casing, fluids are pumped down to an isolated portion of the well at pressures high enough to cause cracks in the rock formation thousands of feet below the earth’s surface. These cracks or fractures allow oil and natural gas to flow more freely. A propping agent, such as sand, is pumped into the well with the fracturing fluid to keep fractures open. Once a well has been subjected to hydraulic fracturing, crude oil or natural gas production may occur for years without additional fracturing. Hydraulic fracturing operations occur over very short time periods, usually two to five days.

Hydraulic fracturing is a safe and well-understood technology used in California for decades to enhance the recovery of the state’s prolific petroleum resources.

Hydraulic fracturing and environmental quality Oil and gas deposits that undergo hyContinued on page 8

Raising the standards where people live, work and play /HDUQPRUHDERXWRXUSURSHUW\PDQDJHPHQWVHUYLFHV Call us at 661.616.1214 or visit us at mancoabbott.com. /LFHQVH


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Single fracking bill ‘alive’ in California Legislature

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alifornia’s legislative session began with several bills to regulate hydraulic fracturing, or “fracking.” But only one watered down piece of legislation has survived. While it has passed the Senate, it awaits an Assembly floor vote, before Gov. Brown can sign it into law. Senate Bill 4 by Sen. Fran Pavley, D-Agoura Hills, is the sole survivor. Other fracking bills have been relegated to the inactive file at the authors’ requests, died during floor votes or were sent to the legislative wasteland called the “suspense file.” Among those bills were some calling for a moratorium on fracking in California. Pavley’s bill, which passed the Senate on a party-line 28-11 vote, with Republican lawmakers opposed, would set up a permitting system; require energy companies to share more information, including identifying chemicals used in the fracking process, with the state and with property owners; monitor groundwater and air quality; and have the California Natural Resources Agency commission a study on the environmental repercussions of fracking. In early July, the bill passed the Assembly Natural Resources Committee. It must still survive a vote on the Assembly floor. California legislators have criticized the California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources, or DOGGR, for being slow to craft rules governing hydraulic fracturing. The reported potential of California’s Monterey Shale to bring an energy windfall to the state has intensified the debate. — Kern Business Journal

Continued from page 7 draulic fracturing generally are separated from drinking water aquifers by one or more impermeable rock barriers. Extensive state, federal and local regulations related to well design and construction require equipment and procedures to ensure hydraulic fracturing does not impact drinking water supplies. Even with these safeguards in place, the oil and gas industry uses multiple practices and techniques to monitor and understand each hydraulic fracture operation. A landmark study in 2004 by the U.S. Environmental Protection Agency examined the risks of hydraulic fracturing in gas formations that were much closer to the earth’s surface than typical crude oil sources in California. That study concluded there was “little to no risk of fracturing fluid contaminating underground sources of drinking water during hydraulic fracturing.” In October 2012, an intensive year-long study of hydraulic fracturing in the Baldwin Hills area of Los Angeles concluded there were no recorded impacts to groundwater in the area. In fact, the study closely examined 14 specific environmental risk factors, including earthquake risks, and concluded there were no impacts to any of those areas as a result of hydraulic fracturing. In California, it is important to note that all wells are subject to a strict body of regulation to ensure environmental protection including: • Well drilling, design and construction is heavily regulated by the California Division of Oil, Gas, and Geothermal resources to ensure groundwater protection.

In California, it is important to note that all wells are subject to a strict body of regulation to ensure environmental protection…

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• Operations must comply with local land-use and zoning ordinances. • Operations are subject to some of the most stringent air quality standards and controls in the nation. • The disposal of fracturing fluids is regulated by state and federal water quality laws, including the Clean Water Act and the Safe Drinking Water Act. New regulations being developed by the California Department of Conservation will almost certainly result in more monitoring, testing and disclosure requirements on oil and gas producers. And legislation under consideration likely will add more regulations. The Western States Petroleum Association will work to achieve comprehensive and balanced regulations.

What is in hydraulic fracturing fluids? While no two hydraulic fracturing operations are identical, the fluids used in those operations typically are 99.5 percent water and sand. The remaining 0.5 percent of fluids is chemicals and materials, many found in common household products, designed to reduce friction, inhibit scaling, control iron and corrosion, and reduce the growth of bacteria. Many of these chemicals are used to maintain the mechanical integrity of the equipment used in hydraulic fracturing operations, thereby further protecting groundwater resources. Hydraulic fracturing is one of several techniques developed to enhance and more efficiently use California’s energy resources. In addition to enhanced oil recovery practices, like steam injection and water flooding, hydraulic fracturing is another proven and safe practice that helps to keep the state a major energy producer. Additional information about hydraulic fracturing and the oil and gas industry can be found at www. wspa.org.

Tupper Hull is the vice president of strategic communications at Western States Petroleum Association.

Phone: 661.327.0258 Toll Free: 800.635.7641 Fax: 661.327.3894


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KERN BUSINESS JOURNAL

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State fracking rules need ‘balanced approach’ By Catherine Reheis-Boyd

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espite very vocal and impassioned calls for moratoriums and prohibitions, the California Legislature recently took a measured and responsible approach to multiple hydraulic fracturing legislations. By rightfully rejecting the unfounded proposals calling for bans or moratoria, the Legislature took a significant step toward balance and progress. California policy makers must sensibly address the legitimate concerns that have been raised with hydraulic fracturing in California. All parties involved in the hydraulic fracturing conversation, including the oil industry and environmental activists, have a responsibility to acknowledge that: 1. There are legitimate issues related to hydraulic fracturing that must be addressed by regulators and the Legislature. 2. The production of petroleum energy is a vital and necessary part of the California economy. Given the decisive actions the Legislature took, environmental groups that continue to insist on “all or nothing” demands for a moratorium of hydraulic fracturing will relegate themselves to the sidelines of this important policy making process. Regulators and the Legislature now must find the sweet spot where appropriate environmental protections are put in place in a manner that allows for the continued development of the economic opportunity that oil production represents for California. Governor Brown’s Department of Conservation is taking on the task of developing comprehensive new regulations regarding hydraulic fracturing. The governor has certainly established a strong environmental record over his decades of public service. Sen. Fran Pavley, another environmental leader, has indicated she will work with the petroleum industry and other stakeholders to develop additional regulations that will likely result in even stricter regulations than those being developed by the Department of Conservation.

Photo courtesy of Gary Graupman/Taft College

The promise of a jobs boom in Kern County’s oil patch is fueling the debate over hydraulic fracturing.

To sufficiently ensure that California’s environmental health and natural resources are protected, while hydraulic fracturing technologies are safely used for oil production in California, a comprehensive regulatory package will include: • Pre-notification and submission of information to the Department of Oil, Gas and Geothermal Resources prior to beginning hydraulic fracturing operations. • Additional groundwater testing. • Expanded testing of the structural integrity of wells to prevent fluid migration. • Well monitoring before and after the conclusion of

hydraulic fracturing operations. • Full disclosure of the chemicals used in hydraulic fracturing. This balanced approach to regulation means California will be able to continue to pursue the tremendous economic recovery opportunity offered by the vast energy resource beneath the San Joaquin Valley, known as the Monterey Shale. Development of oil from the Monterey Shale using hydraulic fracturing and other recovery technologies could result in: • The creation of 512,000 to 2.8 million new jobs. • Personal income growth of $40.6 billion to $222.3 billion. • Additional local and state government revenues from $4.5 billion to $24.6 billion. • An increase in state GDP by 2.6 percent to 14.3 percent on a per-person basis. California cannot afford to ignore these potential benefits and the opportunity to get our economic recovery on track. This balanced approach also is supported by a large majority of Californians, according to a recent poll by The Los Angeles Times and the USC Dornsife College of Letters, Arts and Sciences. While large numbers of Californians have concern about hydraulic fracturing, 41 percent said they supported the technology if it were subject to additional regulations. When combined with the 19 percent who supported hydraulic fracturing under all circumstances, 60 percent of the survey respondents were in favor of properly regulated hydraulic fracturing. As the state of California continues its consideration of legislation and regulatory proposals, lawmakers must keep this essential balance in mind. A responsible and balanced approach to regulating hydraulic fracturing offers California confidence in a safe and healthy environment and the tremendous potential economic benefits contained in the Monterey Shale. Catherine Reheis-Boyd is the president of the Western States Petroleum Association.

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KERN BUSINESS JOURNAL

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Kern seeks ‘streamlined’ approach to well permitting By Lorelei Oviatt

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ern County has been the center of California energy since 1899, with the discovery of the Kern River Oil Field. Today with over 8000 MW of permitted renewable energy in addition to providing 80 percent of the oil produced in the state, Kern County continues to provide electricity, fuel and job creation for California. Yet California’s reputation as a special place to live, work and play has also created a difficult place for business development. The oil industry is no exception and recent national stories about hydraulic fracturing in Pennsylvania, Ohio and North Dakota have raised concerns among 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 oil fields, questions now being raised need answers to reassure a concerned community and interested surface owners. Kern County has a track record of streamlining permitting, while still maintaining thoughtful environmental protection for many of our industries, including agriculture, wind and solar PV, as well as industrial complexes, such as the Tejon Commerce Center. Representatives of the oil and gas industry and the state of California asked for a partnership to be formed to find a method for answering oil production questions, which would avoid wasteful and

The Bakersfield Californian

A worker treads carefully along a rig in a Kern County oil field.

delaying litigation over environmental laws. In January of this year, the Kern County Board of Supervisors directed the Planning and Community Development Department to work with representatives of state agencies and the oil industry to find a way to streamline oil field permitting and associated review, as required by the California Environmental Quality Act (CEQA) in Kern County.

Staff began discussions with representatives of the oil and gas industry associations — Western States Petroleum, California Independent Petroleum Association, Independent Oil Producers Association and specific oil companies, as well as the state Division of Oil, Gas & Geothermal Resources — to develop a program to amend the county’s zoning ordinance and prepare a project level environmental impact report, with Kern

County as the lead agency, to cover all oil field activities. Based on those discussions and the commitment of funding from the industry, the board of supervisors in April 2013 directed staff to begin the process. This comprehensive project level review of the entire valley portion of Kern County for oil exploration and extraction activities will result in amendments to Chapter 19.98 Oil and Gas Production of the Kern County Zoning Ordinance. It will address requirements for environmental protection and surface impacts. Kern County staff is working with the state Division of Oil, Gas & Geothermal Resources to provide a CEQA document that can also be used in well permitting by the state regulatory agencies, as well as other agencies, as needed. This approach will involve public workshops, starting this month, and result in a finished program in August 2014. 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 the Kern County Planning and Development Department.


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Oil field with rich history marks 100th anniversary

KERN BUSINESS JOURNAL

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To appreciate future, understand past

Holly Arnold

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n the midst of Elk Hills Oil Field stands a small wooden derrick, a 16-foot-tall replica of a drilling rig long removed from today’s hightech, automated oil operations. Dedicated on June 16, 2011, by Elk Hills operator Occidental of Elk Hills Inc., a subsidiary of Occidental Petroleum Corp., it marked the 100th anniversary of the first producing well at the 47,000-acre field, located 30 miles southwest of Bakersfield in Kern County. Associated Oil Company Well No. 1, rotarydrilled to a depth of 4,027 feet on June 16, 1911, yielded 45 barrels of oil per day. A century later, the Elk Hills Oil Field is California’s largest producer of natural gas and natural gas liquids, with cumulative production over the life of the field approaching 2 billion barrels of oil equivalent (BOE). “There are not many products that can boast of being over 100 years old, while remaining strong and relevant in today’s modern world, but the production and work being done at the Elk Hills Oil Field is one of them,” states the foreword to a 2011 book commemorating the centennial anniversary. Commercial oil development in Kern County began in 1861, two years after the first U.S. oil well was drilled in Pennsylvania. The industry gained importance when the battleships of the Great White Fleet returned in 1909 from a global voyage to showcase American naval power. Difficulties in accessing coal supplies during the 14-month journey convinced President Theodore Roosevelt that the battleships of the future should be fueled by oil. President William Howard Taft designated Elk Hills as a Naval Petroleum Reserve in 1912. But legal battles kept production to a trickle until 1919. And by the time Elk Hills was opened up to full production in 1976, it had been used as an oil resource for the U.S. Navy for only one year. Occidental (Oxy) purchased the government’s majority interest in Elk Hills in 1998. The company has customized a range of recovery processes to the field’s complex reservoirs, steadily increasing production with cumulative production since 1998 exceeding 490 million net BOE. “Through technology, capital investment and exploration, we have turned our original 425-millionbarrel acquisition into an 838-million-barrel play, an increase of more than 95 percent,” said Oxy Elk Hills President and General Manager Bob Barnes. “Safety is a core value,” said Armando Gonzalez, manager of health, environment and safety at Oxy Elk Hills. In 2012, Elk Hills completed its state-of-the-art emergency services center, which consolidates emergency response and security. The company also has a strong commitment to protecting the environment. Elk Hills’ environmental initiatives include the preservation of endangered species habitats, emissions reduction, waste minimization and recycling, and cultural resource preservation. Oxy has been recognized for outstanding environmental stewardship by the U.S. Environmental Protection Agency, the California Department of Conservation, the Wildlife Habitat Council and others. Oxy’s operations generate considerable economic value in the communities where it operates. The Elk Hills workforce increased from 900 employees and contractors in 1998 to more than 5,000 in 2012. Oxy’s net capital investment in Elk Hills since 1998 exceeds $5 billion. Oxy is the No. 1 property taxpayer in Kern County. The company has provided financial contributions, as well as employee volunteer time to numerous local organizations, including the United Way of Kern County, the Bakersfield Homeless Center and the Taft Union High School Oil Technology Academy. As part of the centennial celebration, Oxy Elk Hills provided funding to a Taft College program that encourages K-12 students to pursue careers in science, technology, engineering and math. Holly Arnold is the external relations manager of Occidental of Elk Hills Inc.

Kern County can thank tiny, ancient deposits of plankton for its oil riches.

Tiny ancient sea life created Kern’s vast oil ‘treasure’ By Jan Gillespie

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hen you’re standing at the gas pump filling your car, you’re probably a bit tense wondering how big the final cost will be. But did you ever wonder where this energy comes from? The fact that gasoline contains the energy that makes our cars run is not surprising. Many people think that our oil came from dinosaurs. Not a bad guess in some ways — the composition of oil is similar to the organic substances one would find in dead plants and animals (fats, proteins and carbohydrates). And, of course, dinosaurs were very large and would contain a lot of organic matter. However, there were just not enough dinosaurs to supply all the oil we use. Most of the oil in the San Joaquin Valley was formed during a time period called the Miocene — about 5 million to 25 million years ago. At that time, the San Joaquin Valley was occupied by a deep ocean. Bakersfield lay offshore from the beach along the eastern shoreline. The ocean became deeper to the west, near Taft. This ocean teemed with large animals — whales and giant sharks, whose remains are still found at Sharktooth Hill, east of Bakersfield. These animals represented the top of the food chain. They ate smaller fishes, which in turn ate tiny plankton. Let’s look at the modern day blue whale. A blue whale weighs about 150 tons. It eats about 1,500 tons of plankton each year by straining enormous amounts of sea water through sieves in its throat. That means there has to be many more pounds of plankton in the world than there are pounds of whale. The microscopic plankton that forms the base of the food chain has the remarkable ability to convert energy from the sun into energy that can be used by animals higher in the food chain. So it’s the smallest organisms that contain the most stored energy. Collectively, they have larger mass than the big animals. And the ultimate source of their energy is sunlight. Diatoms were some of the most common plankton in the ocean that covered the San Joaquin Valley. Diatoms are tiny single-celled algae that live inside a protective shell made of silica. There were untold billions of diatoms living in the valley sea, floating about near the surface, soaking up sunshine, and turning minerals and water into proteins, carbohydrates and fats. Many were eaten and many were not. Diatoms that remained uneaten sank to the bottom of the sea when they died. Ordinarily, the dead diatoms, like most dead creatures, would decompose and be eaten by scavengers. However, the Miocene Sea in the San Joaquin Valley was only partially connected to the larger Pacific Ocean. Therefore, circulation

was poor and the bottom of the sea became a dead zone in which the water contained little or no oxygen. Very few living things can make use of carbon energy sources without oxygen. Those that can are mainly bacteria with very slow metabolisms and they cannot convert food to energy very quickly. These bacteria were the only creatures that could survive in the oxygen-starved waters at the bottom of the San Joaquin Sea. As a result, the dead diatoms piled up faster than they could be decomposed by the slow- metabolizing bacteria. Hundreds of feet of dead diatoms accumulated on the sea floor in the western San Joaquin Valley and each diatom was like a tiny battery storing energy from the Miocene sun in the tissues of its body. The largest accumulation of these creatures was in the layer of rock that we know today as the Monterey Shale— the most important oil source rock in our basin. In order to produce oil and gas, the organic matter in the dead diatoms must be cooked. Imagine a cold hamburger patty in a frying pan. Now turn on the stove. As the temperature of the frying pan rises, a slick of grease forms on the bottom of the pan. This fat represents energy stored by the cow from which the hamburger came. The same happened to the diatoms buried deep in the rock layers beneath the San Joaquin Valley. As the valley floor sank, the accumulated diatoms were carried deep into the earth where temperatures are much warmer than they are at the surface. As the diatoms heated up underground, the fats and oils in their bodies swelled and fractured the Monterey shale and some of the oil escaped. The escaped oils were slowly released into the waters present in the rock layers. Of course, oil and water do not mix very well and, just as in a bottle of oil and vinegar salad dressing, the oils from the bodies of the diatoms floated upward as they tried to rise to the top of the water. Much of the oil remains trapped within the Monterey Shale and may someday be produced by “fracking,” or hydraulic fracturing the shale. In some areas in the San Joaquin Valley, huge tectonic forces created folds and faults in the rock layers that trapped the rising oil in underground reservoirs or pools. More of these folds and faults are found near Bakersfield than near Fresno. Thus, we are the area with a thriving energy business. These pools have been discovered by geologists and pumped to the surface so that we can use the energy to power our economy. So, one could say that our economy is powered by ancient solar energy captured and stored by plants and animals that lived long ago! Jan Gillespie is a geology professor at California State University, Bakersfield.


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‘Black Gold’ exhibit tells Kern’s oil story By Catherine Merlo

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as it the 1899 Kern River Oil Field discovery northeast of Bakersfield that jump-started Kern County’s spectacular oil boom? Or was western Kern County’s 1910 Lakeview Gusher – the largest recorded oil strike in U.S. history – more important? What did an ocean have to do with Kern County’s billion-barrel oil fields? The answers — and much more — can be found at “Black Gold: The Oil Experience,” the interactive exhibit at the Kern County Museum in Bakersfield. Completed in 2002 for $4 million, Black Gold documents Kern County’s rise from a sea-covered valley millions of years ago to its position today as the nation’s leader in oil and gas production. “It’s the crown jewel of the museum, but also a hidden gem,” says Roger Perez, executive director of the Kern County Museum Foundation, which operates the museum and Pioneer Village complex. “When people walk into Black Gold, they’re always blown away.” The 9,640-square-foot exhibition and surrounding 2.3 acres offer a scientific, technological and historical look at Kern County’s oil industry. Visitors learn where and how oil is formed. They’re shown how oil’s discovery and extraction have evolved over the past two centuries. Photos, videos, artifacts and displays describe Kern County’s oil-rich fields, many with near-legendary names: Midway-Sunset, South Belridge, Kern River, Elk Hills, Lakeview, McKittrick. Inside Black Gold, a mock cavern features geological formations and seismic mapping displays. The exhibit also shows how industry workers and their families lived following the early oil boom. The outdoor area includes an authentic wooden oil derrick powered by a steam engine, a full-size working jack plant, oil-field engines and vehicles. A restored service station, circa 1944, from Bakersfield’s Sonora Street reveals that gasoline then cost 13.8 cents a gallon.

Photo courtesy of the Kern County Museum

Lacking today’s technology, oil gushers were commonplace decades ago. But the biggest of them all occurred on March 15, 1910, when a Lakeview Oil Co. well, between Taft and Maricopa, blew with spectacular force.

Black Gold has drawn some 550,000 visitors from around the world since it first opened. At least a third of those have been students on school-related tours, Perez says. That’s partly because the exhibit aligns with curriculum standards in science, math and history for grades 1–12. The

most popular stops is Black Gold’s “diving bell,” a closed chamber than simulates a bumpy descent to the ocean floor and below to search for oil. “Kids love it,” says Bill St. Claire, a retired oil industry veteran who serves as one of the exhibit’s docents. Few are closer to Black Gold than St. Claire, who was part of the group that first imagined the exhibit. “We knew that oil was so important to Kern County and has left such a big footprint here,” he says. “We wanted to tell oil’s story, and it was a natural that it would be done at the Kern County Museum.” It took two years to raise the $4 million. Most funding came from the Park Bond Act of 2000. Museum Arts Inc. of Dallas, Texas, designed and fabricated Black Gold. All in all, the exhibit was six years in the making. “It’s the best oil exhibit in the world, period,” says St. Claire, who conducts his Black Gold tours wearing a uniquely engraved aluminum hard-hat. Of course, the oil industry has changed since Black Gold opened 11 years ago. Kern County now accounts for 80 percent of California’s petroleum production, not 66 percent as Black Gold’s theatre video says. Technology has modernized drilling methods and tools and how crude oil is brought to the earth’s surface. And the exhibit itself is showing its age. Despite the needed upgrades, Perez still champions the Black Gold exhibit. “Black Gold is a phenomenal part of this museum, and we want to share it with even more people,” he says. Black Gold is located at 3801 Chester Ave. in Bakersfield. It’s open Tuesdays through Saturdays from 9 a.m. to 5 p.m., and Sundays from 12 noon to 5 p.m. Admission is free to museum members and $10 for non-members. For more information, call (661) 868-8425 or visit www.kcmuseum.org. Catherine Merlo is Western and online editor for Farm Journal Media and a trustee of the Kern County Museum Foundation.

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Taft museum showcases life in early west side fields By Dennis McCall Photo courtesy of Gary Graupman/Taft College

Taft statue celebrates contributions of Kern’s oil workers By Dennis McCall

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he countless souls who do the heavy lifting in the oil patch remained largely uncelebrated until 2010, when folks in Taft celebrating the town’s 100th anniversary dedicated the tallest bronze monument in the West. The unveiling of a replica of a 1910 cable tool rig, complete with a driller, tool dresser and roustabout, put the focus of Taft Oildorado Days squarely on oil workers. The push for a monument began in mid-2006, when a committee embraced the notion that Taft should do something to pay homage to past and present oil workers. The first big event of the nine-day celebration was the dedication of the 43-foot tall, 13-ton bronze monument. The committee raised $1.2 million to do it – far more than the planners ever dreamed when the project got off the ground. “When we started, we thought we would be doing good to get $500,000,” committee treasurer Carolyn Hosking said at the time. It quickly took on a life of its own and grew “so much larger than anyone on the committee ever thought it would. There is just so much pride in what people have accomplished with this.” The committee turned to a native son to create the monument. Sculptor Benjamin Victor, who lives and works in South Dakota, was born in Taft and moved to Bakersfield as a youngster, where his parents still live. Victor is a graduate of Foothill High School in Bakersfield. Those factors fueled his passion for the project. Cash for the project came from sizable oil industry checks to hundreds of individuals who bought bricks and plaques saluting family members who toiled in the fields. The bricks and plaques were placed around the base of the rig and its eight-foot tall crew. Money kept coming in after the dedication so the committee commissioned Victor to create two more figures — a woman and her young son bringing lunch to a driller. The finished product astonished everyone for its intricate detail. “Standing in front of the roustabout, you’ll swear that he is following you with his eyes,” said Charlie Beard, who owns and operates an oil field service company that poured money, equipment and manpower into the project. Bricks can still be purchased through the Taft Chamber of Commerce and Visitors Bureau located at 400 Kern St. (661-7652165). The monument, located at the corner of Sixth Street and Supply Row in downtown Taft, serves as a reminder of the impact field workers had on the industry and harkens back to earlier times when the job was even more rigorous and dangerous. Freelance writer Dennis McCall is a retired Taft College communications professor.

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esigned to replicate life in the oil patch around 1900, the West Kern Oil Museum in Taft has served as the repository of history and artifacts for generations. The three-acre, all-volunteer museum at the intersection of Highway 33 and Wood Street tells the story of how the discovery of oil in the late 1800s gave birth to 3-billion-barrel oil fields: Midway-Sunset, Elk Hills and South Belridge. “Our museum is Taft’s biggest tourist attraction,” said Don Maxwell, a retired city school district director of maintenance, who directs activities of a couple dozen volunteers. “People are just amazed at what we have here. They’re also surprised we have no paid staff – that we keep it going just with volunteers.” Through exhibits of artifacts, relics and photographs, the museum traces the town’s history from the discovery of oil in 1863-64 – then used to produce kerosene – through more modern times. The West Kern Oil Museum gives visitors a glimpse of what it was like when the area was dotted with oil camps that included offices, houses, recreation halls, dining halls, bunk houses for single men, gardens, fish ponds and waterfalls. Most camps had doctors or nurses, and some had swimming pools. The oil camp re-created on the museum’s grounds, which are landscaped with native trees and shrubs, includes: a 1912 oil company; a 1911 tent house, complete with an ice box, kerosene lamps and a pump organ; and a 1920 shotgun house. The successor to the tent house, the shotgun house is equipped with a refrigerator, stove and an early day washing machine. The adjacent motor transport building houses vintage oil field trucks and completely restored automobiles that are in running condition. They include a 1920 Dodge Brothers touring car and a 1924 Model T Ford. The most recent addition to the motor pool is a stock 1942 Dodge that was originally purchased in Taft. Museum grounds include a fish pond, antique school bus stop, blacksmith shop, cookhouse, gift shop/library, a discovery center used primarily for children’s activities, and many trucks and various types of equipment used in early days to keep the oil pumping and moving. The signature piece is the 106-foot tall wooden derrick – an exact replica of Jameson No. 17, which is the derrick that pumped oil on the site for many years before it was preserved in 1974 thanks to a donation from the Jameson Oil Co. The original derrick was taken down for safety reasons in 2003 and completely rebuilt in time to be dedicated during Taft’s 2005 Oildorado Days celebration. The museum also offers a peek into the area before oil became a commercial commodity. The Yokuts Indians, who inhabited the region 7,500 years ago, used “asphaltum” from oil seeps as glue and waterproofing for the boats they used on Buena Vista Lake. The tribe also

The Bakersfield Californian

Guests received a close-up look at the city of Taft’s Oilworker Monument during a 2010 dedication.

found obsidian to make arrowheads. Artifacts from that era are the focal point of the museum’s Yokuts Indian exhibit. But well before Native Americans roamed the west side of Kern County, the groundwork was laid for the petroleum industry’s raw materials. Prehistoric creatures roamed the area, and the museum showcases some of the artifacts recovered from the nearby McKittrick tar pits. The crown jewel of that exhibit is a saber-toothed cat on loan from the La Brea Tar Pits. Although the museum’s big cat with fang-like teeth came from La Brea, similar creatures were unearthed at the McKittrick digs. Admission to the museum is free. It is open to the public Thursday through Saturday, from 10 a.m. to 4 p.m. and Sunday afternoon from 1 to 4 p.m. Walking or guided tours are available. Call 765-6664. Freelance writer Dennis McCall is a retired Taft College communications professor.

Early residents had little use for seeping oil

A

lthough the Yokuts Indians that inhabited the western Kern County more than seven centuries ago were the first humans to profit from the oil seeps by using asphaltum for trading, it wasn’t until the early 1860s that prospectors sowed the seeds that turned the area into a boomtown. Using picks, shovels and steel bars, those hardy men dug holes 8- and 10-footdeep, waited for the oil to ooze into the pit and then baled it out with buckets. Initially, the product was distilled into kerosene, but little else resulted from the back-breaking labor. In 1892, asphaltum was refined into asphalt and fuel oil, marking the first truly commercial application of the thick, sticky stuff hauled out of those pick-andshovel pits. The asphalt fetched a higher

price than oil. Once the railroads began to use fuel oil instead of coal, activity on the west side kicked into high gear. Southern Pacific built a rail line from the town of Sumner, now known as east Bakersfield, to McKittrick. The first successful oil well drilled in what is now Taft was brought in on May 1, 1901. Activity increased as rail lines were extended throughout the region, and production topped 400,000 barrels by 1908, when the price had increased to 25 cents a barrel. It’s hovering at $100 today. Lacking today’s drilling technology, gushers were commonplace, but the biggest of them all occurred on March 15, 1910 when a Lakeview Oil Co. well, between Taft and Maricopa, blew in with

spectacular force. Efforts to cap the blowout were futile, and the well belched out 9 million barrels of oil over the next year and a half before it fizzled out. An army of men, who were paid $5 a day, toiled to stop the river of oil from flowing into nearby Buena Vista Lake. They also built 20 sumps that salvaged some of the oil. The Lakeview Gusher remains the largest in the world. Drilling and production techniques improved over the years. “One of the most positive changes in the last 25 years has been safety,” said Roger Miller, who’s been in the pipe perforating business for 34 years. “The oil companies have all made a commitment to be safe, and they really mean it.” — Dennis McCall


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KERN BUSINESS JOURNAL

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GRAND ISLAND VILLAGE Bakersfield’s premier retail center, located in the heart of Seven Oaks. Bakersfield Eye Care CVS/Pharmacy Dewar’s Ice Cream Elegant Nails & Spa Grand Island Dentistry Sport Clips Hair Salon Sullivan’s Petroleum/Chevron Sully’s Convenience Store Valley Republic Bank Wiki’s Wine Dive & Grill Coming Soon: Jersey Mike’s Subs

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KERN BUSINESS JOURNAL

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Creating oil industry workforce

CSUB, industry combine to meet safety needs By S. Aaron Hegde

I

n 2011, about 13 people were killed on the job every, day, for a total of 4,609 deaths in that year, according to the U.S. Bureau of Labor Statistics. While this grim statistic is still too high, it is the third lowest annual total since the fatal injury census was first conducted in 1992. The U.S. Occupational Safety and Health Administration reported that since the 1970s, workplace fatalities have decreased by more than 65 percent, with the injury and illness rates declining by 67 percent. Much of the decline can be attributed to technological improvement and compliance with the safe workplace practices established when Congress passed the Occupational Safety and Health Act in 1970. To address policies and regulations dealing with environmental and safety compliance, many regional companies, such as those in the oil and energy sector, created divisions that deal with environmental and health safety (EHS). In-

strumental in ensuring OSHA compliance, these EHS units need trained professionals. In many cases, the need is urgent and immediate. Historically, local industries have recruited EHS professionals from universities as far away as Kentucky, Oklahoma and Montana. That is because there was no college degree program focusing on occupational safety and health in Kern County. And much to the frustration of recruiters, turnover among these new “recruited” graduates was fairly high. In early 2007, members of the safety industry approached California State University, Bakersfield, about the possibility of such a program for local graduates. Spearheaded by CSUB alumnus Joe Bariffi, the request came as the state university system was experiencing a budget crisis. New program development was on hiatus. However, the university was willing to discuss a curriculum that might graduate students with the necessary skills to succeed in the safety industry. A collaboration between the university and the local safety industry led to a generous

donation from Work Force Staffing and its president, Brooks Whitehead, which enabled the first offering of a four-course concentration in Occupational Safety and Health Management (OSHM). The local chapter of the American Society of Safety Engineers, the world’s largest professional safety society, also contributed funds towards this effort and helped with curricular development. A couple of years later, Aera Energy LLC and 17 other energy- and safety-related companies helped establish an endowment for the OSHM concentration, which is now called Aera Energy Occupational Safety and Health Management. This has allowed the program to continue, graduating students with the skills needed in the safety industry. Adjunct faculty, who are experts in their safety industry fields, teach the four courses that form the concentration. These courses cover areas such as hazardous materials management, industrial hygiene and OSHA regulations. In addition to getting practical knowledge and skills, students have opportunities to gain experience through internships. Events, such as networking “meet and greets” between students and safety professionals, mock interviews and panel discussions round out the experience.

Dr. S. Aaron Hegde is an associate economics professor and the director of the Environmental Resource Management Program at California State University, Bakersfield.

Tehachapi Pass railroad project scaled back A major railroad improvement project intended to relieve freight congestion over the Tehachapi Pass has been scaled back substantially, lowering expectations that it will resolve an east-west bottleneck of national significance. Revisions unveiled in May have the Tehachapi Rail Improvement Project’s budget shrinking from roughly $100 million to about $25 million. Instead of five “doubletrack” segments, as proposed earlier, there are to be only two. The California Department of Transportation estimates the latest version, expected to begin construction by year’s end, will expand rail capacity over the Tehachapi Mountains by 12 percent to 56 6,000-foot trains per day. That’s 14 percent less capacity than BNSF Railway and CalTrans estimated under the initial plan. Though more limited in scale, the revised project provides taxpayers and BNSF more “bang for your buck” than the original plan, said Stephen Maller, CalTrans deputy director and chief engineer. Ahron Hakimi, executive director of the Kern Council of Governments, said he is disappointed because the scaled-back plan will remove fewer tractor-trailers from Highway 58, limiting air quality improvements. Varying reasons have been given for trimming the project: Funds from general obligation bonds approved by voters in 2006 were running low. The National Park Service was concerned about the project’s impact on the Cesar E. Chavez National Monument in Keene. --The Bakersfield Californian

Photo courtesy of Gregory Cook/Bakersfield College

Bakersfield College’s welding program is a leader in providing skilled welders to Kern County’s energy industry.

BC welding course prepares job-ready, skilled students By Amber Chiang

K

ern’s abundant energy industry is one of the leading employers in the area. Bakersfield College is working hard to make sure there are highly skilled workers capable of moving the industry forward through a variety of educational programs designed to keep Kern County employed. Many career choices encompass the energy industry, but one transcends all – welding. Bakersfield College’s welding program is a leader in providing skilled welders to Kern County’s energy industry. The comprehensive program establishes a foundational understanding of welding techniques for multiple applications, such as blueprint reading, gas metal arc welding, gas tungsten arc welding, flux core arc welding, and shielded metal arc welding. The combination of classroom lecture-learning and hands-on practice in three different welding scenarios leads to a well-rounded set of job skills, which students can take into many different industries.

“There’s a lot of hands-on, hard work, that prepares these students to go to work right now,” said Mike Komin, Bakersfield College welding instructor. “We aren’t teaching a casual skill. We are teaching an employable skill.” As part of a new partnership with community colleges in Central California, Bakersfield College is training tomorrow’s workforce. The Central California Community Colleges Committed to Change group, casually known as C6, gathers 11 colleges into a cohesive team that meets the needs of California’s largest industries. The average entry-level welder earns about $14 per hour, and jobs paying up to $100,000 per year are possible to experienced welders. According to Komin, there’s no shortage of job opportunities for students trained in Bakersfield College’s welding program. “Students go on to work in industries all over the area,” Komin said. “Not just oil and wind, but agriculture and business, too.” Amber Chiang is the director of marketing and public relations for Bakersfield College.


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KERN BUSINESS JOURNAL

Taft High Oil Technology Academy participants Triston Ginn and Jacob Lopez assemble a rod pump as Anthony Cameron watches.

Taft High features unique ‘oil technology academy’ By Anthony Cameron

T

he Oil Technology Academy at Taft Union High School, a program coordinated by Lynn “Ted” Pendergrass, introduces students to a variety of career opportunities in the petroleum industry and equips them with the vocational and academic background needed to excel in their post-high school futures. Students are introduced to a variety of study areas, such as petroleum exploration, drilling and completions, production, transportation, refining, environmental issues, and economics. With the help of business partners, mentors, teachers, internships and scholarships, Oil Tech Academy students are presented with endless possibilities regarding future careers. Freshmen must apply and be interviewed to be accepted into the three-year program. Once accepted, students receive guidance from generous mentors, who dedicate their time and passion through the sharing of their real life experiences with students. Each student has the opportunity to benefit from their mentor’s wisdom, while at the same time focusing on their academic studies in class. The Oil Tech Academy receives assis-

tance and support from the following business partners: Chevron Corp., Aera Energy, Holmes Western Oil Corp., Occidental Petroleum of Elk Hills, Berry Petroleum (soon-to-be-named Linn Energy), General Production Service, Key Energy Services, ExxonMobil Pipeline, Nabors Drilling Service, San Joaquin Refining, Quinn Pumps, TRC Operating Co., and the Association of Energy Services Companies (AESC). Sponsored by the American Association of Drilling Engineers (AADE), the Taft Oil Technology Academy is the first and only AADE Student Section at the high school level in the U.S. The Oil Tech Academy’s vision is to guide students to realize their full potential by emphasizing high standards of academic excellence and personal growth, allowing students to become competitive, competent and contributing members of society with high moral character. The academy fosters a partnership between parents, students, the petroleum industry, high school administrators and teachers. Anthony Cameron is a student in the Taft High Oil Technology Academy. He was assisted in writing this article by students Lizette Mendoza, Kennedy Sorenson, Kayla Kaszcki and Jessica Plascencia.

Nominations open for West Coast Oil & Gas Awards Nominations for the West Coast Oil & Gas Awards now are being accepted. The deadline for nominating companies and individuals in 25 categories is Aug. 9. The West Coast awards are a regional platform for the oil and gas industry to demonstrate and celebrate the advances made in the key areas of environmental stewardship, efficiency, innovation, corporate social responsibility, health and safety. Competitions also are held in the Rocky Mountain,

Northeast and Gulf Coast regions. The awards are free to enter. Experienced E&P, midstream and oil field service professionals nationwide have been recruited to serve as an executive judging panel to evaluate nominations. Winners will be announced during a gala ceremony in Bakersfield on Oct. 24. For information about the awards or to nominate visit www.OilandGasAwards.com — Oil & Gas Awards

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Greater Bakersfield Chamber of Commerce Aug. 2 -- Government Review Council will be joined by Assemblyman Rudy Salas; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Aug. 13 -- “Business Initiatives,” Business Development Seminar, with Sue Watson; registration, 11:30 a.m.; program and lunch, noon to 1 p.m.; Greater Bakersfield Chamber of Commerce; $30 for members, $60 for nonmembers. Aug. 28 -- Social Media Therapy, “Power of Email Marketing;” registration, 11:45 a.m.; program and lunch, noon to 1:00 p.m.; Greater Bakersfield Chamber of Commerce; $30 for members, $60 for nonmembers. Sept. 10 -- Business Development Seminar; registration, 11:30 a.m.; program and lunch, noon to 1 p.m.; Greater Bakersfield Chamber of Commerce; $30 for members, $60 for nonmembers. Sept. 12 -- Small Business Networking Breakfast; opportunity for small businesses to find out how to do business with large companies; registration, 7:30 a.m.; program and breakfast, 8 to 9:30 a.m.; Greater Bakersfield Chamber of Commerce; $25 for members, $50 for nonmembers. Sept. 23 -- Good Morning Bakersfield; registration, 6:45 a.m.; program and breakfast, 7 to 8:30 a.m.; DoubleTree by Hilton, 3100 Camino Del Rio Court.; $45 for members, $75 for nonmembers, $550 for a table of 10. Sept. 25 -- Social Media Therapy; registration, 11:45 a.m.; program and lunch, noon to 1 p.m.; Greater Bakersfield Chamber of Commerce; $30 for members, $60 for nonmembers. For additional information about these events, go to the chamber’s website www.bakersfieldchamber.org or call (661)327-4421.

KERN BUSINESS JOURNAL

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CSUB engineering degrees meet student, industry needs By Mark Evans

T

hrough 2020, Kern County will annually average 329 job openings that require bachelor’s degrees in computing or engineering, according to California’s Employment Development Department. Fifty percent of these jobs will be in computing, information systems, and computer and electrical engineering. Fortytwo percent will be in engineering fields other than computer/ electrical, including 9 percent in civil, 8 percent in mechanical, and 6.5 percent in petroleum engineering. An additional 8 percent will be in technical/engineering sales. These are incredibly good career opportunities for engineering graduates, with EDD projecting 85 percent of the jobs will require no experience beyond the bachelor’s degree. The median salary in these occupations was roughly $95,000 in 2012. Until recently, it was not possible to complete a bachelor’s degree in engineering in Kern County. While pre-engineering programs exist that enable Kern County residents to complete the freshman and sophomore years prior to transferring, engineering degree programs throughout the California State University system are heavily impacted and are turning away ever-increasing numbers of qualified applicants due to declining budgets. The School of Natural Sciences, Mathematics, and Engineering (NSME) at California State University, Bakersfield, has entrepreneurially addressed this problem by bringing Kern County its first three engineering degree programs. With a start-up grant from the U.S. Department of Education, CSUB launched its bachelor’s of science degree program in computer engineering in the fall 2011 quarter. The following fall, two additional degree programs were launched -- in electrical engineering and engineering sciences. Engineering Sciences is a general engineering degree that can flexibly add specialized concentrations. Concentra-

tions are available in petroleum engineering, and biosystems and agricultural engineering. Engineering science majors also can complete an optional engineering management emphasis. The concentrations cost-effectively use community professionals as adjunct professors. There is strong interest in these programs. More than 650 students have applied for the fall 2013 admission to CSUB’s three engineering programs. Already, 400 are admitted. Historically, 50 to 60 percent of those who are admitted attend. So the entering freshman class of engineering students is likely to be in the 200-student range. While program applications and acceptances are encouraging, the attrition rate in our nation’s engineering programs is large (roughly 50 percent) and coincides with enrollment in the calculus sequence during the freshman and sophomore years. In anticipation of this challenge, NSME obtained a three-year innovation grant from the Department of Energy’s Minority Science and Engineering Improvement Program to incorporate weekly engineering labs throughout the fourcourse calculus sequence. The labs will continue after the grant if the infused engineering applications contribute to student success. Taking into consideration that engineering majors spend two years laying a foundation with mathematics, physics and other cognates, the 2011 freshman class will be the first to be immersed into “real engineering classes.” This will happen in their junior year this fall. The next step will be internships, which ideally are arranged after the junior year. The program anticipates success in developing internship opportunities, as community good will is strong. Dr. Mark Evans is a professor and chairman of the Economics Department at California State University, Bakersfield.


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KERN BUSINESS JOURNAL

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KERN BUSINESS JOURNAL

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Taft College to host energy summit By Sheri Horn-Bunk

T

he Taft College Foundation will host the West Kern Petroleum Summit on Oct. 18. The one-day conference on the Taft College campus will feature energy experts, policy makers, and academic and regional leaders. The summit will discuss current and newly developed petroleum and natural gas technologies, and their impact on both local and regional economic development. In addition, the workforce needs of the petroleum industry will be discussed, as oil industry leaders share their views about the future of their businesses regarding technology, workforce, partnerships and expansion. Specific discussions will also focus on workforce needs for the petroleum industry and demonstrate how Taft College is making science, technology, engineering and mathematics

a focal point of its educational offerings. The intention is to prepare students to enter the industry, especially at technical levels. Petroleum industry leaders have repeatedly indicated that their greatest employment needs focus on developing a skilled work force that can assume technical-related duties, both in the business office and out in the field. Within the last three years, Taft College has developed an Energy Technology Program that includes both a two-year degree option, as well as five certificate programs, which are designed to meet the needs of today’s regional workforce. Hands-on training, secured through internships, allows these students to practice the skills they have been taught. Among the confirmed summit speakers are Rep. Kevin McCarthy, R-Bakersfield, who will discuss U.S. energy policy, and John Hofmeister, former chief executive officer of Shell Oil and founder of Citizens for Affordable Energy

Industry challenge: Meeting skilled labor needs By Sam Aunal

W

hat does it take to get a job today? Skills! According to GET REAL California, a coalition of businesses and labor organizations, and educators, California needs skilled workers to build and keep its competitive edge in energy, agriculture, aerospace and other areas. The Taft College Energy Technology program provides training and education in technical and professional skills to enable individuals to be job-ready and professionally prepared. This program, first offered in the fall of 2010, was developed in collaboration with the energy sector, with the goals of preparing students for the workplace and support-

ing the energy sector with skilled workers. The program has an emphasis on the petroleum industry, but teaches the fundamentals of the energy sector so that the skills attained are transferable across industries. To meet the goal of producing skilled graduates, the program addresses both technical and professional skill preparation. Technical skills topics include: computer applications, data management, petroleum processes, safety and instrumentation. Professional skill topics include: ethics and values, team building, and business communication. Students in the program range from recent high school graduates to working adults. The program is ideal for those interested in the petroleum industry, whether they are looking for a career change, or wanting to advance their careers

in Washington D.C. Hofmeister is also the author of “Why We Hate the Oil Companies: Straight Talk from an Energy Insider.” The summit will include panel discussions by local and regional energy industry representatives. The presentations will focus on the USC Monterey Shale Development Study and an update on regulation and legislation developments. Summit registration will begin at 7:45 a.m., with a continental breakfast reception. The program will begin at 8:30 a.m. and will conclude at 3:30 p.m. Luncheon will be served mid-day. The cost for VIP sponsorship is $2,500 per table. Individual tickets can be purchased for $60. For more information, call (661) 763-7936 or email shornbunk@taftcollege.edu.

Sheri Horn-Bunk is the executive director of the Taft College Foundation.

more broadly. Students may choose to receive an associate’s degree and/or one of five certificate options. Students gain practical work experience along with their studies. Taft College partners with several energy companies to offer interested students with internships opportunities. This program is only possible working in partnership with area industry, including: Holmes Western Oil Corp., Freeport-McMoRan, Chevron Corp., E&B Natural Resources Corp., Nabors Drilling Services, Halliburton Corp., WESTEC, Berry Petroleum Co., Gene Watson Construction, Aera Energy LLC, Sempra Energy, Workforce Staffing, Occidental Petroleum Corp., ESI, and PCL Constructors Inc. Information about the program can be obtained by calling the Counseling Center at (661) 763-7748 or by emailing CareerReady@taftcollege.edu. Sam Aunal is the director of technical education at Taft College.

CSUB of FREE FREE business business webinars webinars CSUB SBDC SBDC will will host a Series of every other Wednesday e Training: Specialty and Cottage Food Business Revisited • Date: August 21, 12:05pm - 1pm • Go To Webinar Code: 146-750-499 Description:Specialty value added food are marketed. New 2013 state law permits certain food businesses to operate from a home kitchen. Get the new rules and regulations and tips to operate a profitable food business from home. Fee: $39 to non county residents Training: Your Business & High Speed Internet • Date: September 4, 12:05pm - 1pm • Go To Webinar Code: 139-018-499 Description:High Speed Internet is coming to many rural areas and our pro will detail the fantastic business and marketing opportunities for small businesses. Fee: $39 to non county residents Training: Tips to Grow Your Business • Date: September 18, 12:05pm - 1pm • Go To Webinar Code: 112-467-027 Description:Business basics of starting or growing a small business are explored. Legal aspects, marketing, financial info and technology are discussed. Fee: $39 to non county residents Training: Contracts - The Dos and Don’ts • Date: October 2, 12:05pm - 1pm • Go To Webinar Code: 142-480-483 Description: Entering a legal contract is necessary but a worrisome proposition for many business owners. Lean the pitfalls and tips when contracting with others from our legal pro. Fee: $39 to non county residents

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Contact us at 661-654-2856 , tbahena@csub.edu, http://csub.edu/sbdc The California State University, Bakersfield (CSUB) Small Business Development Center is an affiliate of UC Merced Small Business Development Center regional network and is partially funded by CSUB, the University of California, Merced and the U.S. Small Business Administration. This is a partnership program under the current Cooperative Agreement with the U.S. Small Business Administration and the University of California, Merced. Reasonable accommodations will be made, upon request for handicapped individuals.


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KERN BUSINESS JOURNAL

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Industry group offers worker training courses By Laura Barnes

F

inding a job remains the biggest hurdle for many high school graduates and young adults. Finding and hiring qualified workers remains one of the biggest hurdles for local contractors. Associated Builders and Contractors, Central California Chapter, bridges the gap by offering craft skills training courses that provide individuals with the vocational skills needed to land a lucrative and rewarding job in the oil and/or construction industry, while creating a pool of skilled workers for contractors. Associated Builders and Contractors is a not-for-profit trade association founded on the “merit shop” philosophy and free enterprise. The local ABC chapter is comprised of 162 contractor- and constructionrelated member companies. The stability of businesses and our industry is dependent on taking our workforce to the next level by providing tools for success, including quality skills and safety training. Years are required to prepare people for their future leadership roles; years are required to advance a person from entry-level to a skilled and competent journey-level craftsperson. Associated Builders and Contractors and its members believe that a safe and skilled workforce is a more productive workforce. Our members recognize the value and importance of formalized skills training and enroll their employees in ABC’s training programs to ensure that they are receiving

Photo courtesy of ABC

Instructors in the Associated Builders and Contractors training program stress the importance of communicating.

quality classroom and hands-on training presented in a format conducive to all types of learners. Associated Builders and Contractors partners with the National Center for Construction Education and Research for its curriculum, which is developed by industry subject matter experts and is available

in a wide array of disciplines. Training is a modular-based learning structure. Each module includes classroom theory, a written module exam and is accompanied by a hands-on performance evaluation. The local chapter offers the following craft skills training courses: core curriculum; state-approved electrician training; welding;

rigging and signal person; crane; instrumentation; heavy equipment; field management; safety professional; pipefitting; and calculation and layout All craft skills courses are long-term apprenticeship-style training classes designed to be coupled with on-the-job training. Associated Builders and Contractors has enjoyed a long history of success with its craft training program. Classes began in 1998, with the first graduates being recognized in 2002. Since the start of its program, ABC has grown from offering two crafts, with an enrollment of 38 students, to offering 10 crafts, with a peak enrollment of 647 students. In addition to the craft skills classes offered at ABC, many safety-related courses are available including: Passport/Passport Refresher; first aid CPR; Jumpstart; forklift; confined space entry; confined space rescue; supervisor safety leadership; and competent person. In January 2012, the chapter relocated to a newly constructed, state-of-the-art 36,000-square-foot training facility on seven acres in the North Meadows Business Park on Flightpath Way in north Bakersfield. The facility boasts welding, craft and instrumentation labs, two lecture rooms and 13 classrooms, as well as the chapter’s administrative offices. Class schedules and additional information are available at www.abccentralcal.org. Laura Barnes is the president of the Associated Builders and Contractors, Central California Chapter.

Your Future. Our Future. As your neighbor for more than 25 years, we’re committed to safely developing and producing America’s oil and natural gas.

e are Seneca Resources Corporation, the exploration and production segment of National Fuel Gas Company. We’re engineers, geologists, supervisors, administrators and various other production and operations management and support personnel. We are your neighbors and friends. We live in the communities where we work. And we’re proud to be part of an industry that is helping America achieve energy independence. Just as we have for more than 25 years, the companies of National Fuel Gas are ready to serve our community. Your Future is Our Future. For more information go to YourFutureOurFuture.com.

MEMBERS OF THE COMMUNITY FOR MORE THAN 25 YEARS


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KERN BUSINESS JOURNAL

Photo courtesy of WESTEC

WESTEC students receive a combination of hands-on and technical training in a variety to skills.

Nonprofit WESTEC training oil industry workforce in Kern By Gary Boren

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estside Energy Services and Educational Center Inc. (WESTEC) is a nonprofit, public benefit corporation that provides cost-effective, short-term, quality training in the oil and gas industries to improve workplace knowledge and skills. WESTEC was founded in 1982 in response to a need for vocational training specific to the petroleum and other related industries. WESTEC determines training requirements, creates and carries out training programs, develops means to effectively conduct these programs and keeps accurate records for each student participating in its programs. In over 30 years of service, WESTEC has become one of the most respected California nonprofit organizations engaged in workforce training, envisioning itself as an organization that makes a significant positive contribution to its trainees, customers and community. It offers many oil industry classes that may be utilized throughout the U.S., as well as in specific locations in Kern County. The main offering for the local workforce is the PASSPORT class, which orients students on the rules and regulations applicable to California oil producers. An individual must have this class before being allowed on any California oil producer’s property. Other classes include: confined space; confined space rescue; forklift; medic first aid/CPR; supervisor safety; basic employee

safety training for general industry; California commercial driver’s license preparation; and pediatrics in English and Spanish. The 40-hour HAZWOPER class is offered for those who work with or around hazardous materials. WESTEC also offers a number of well control courses. Since the big British Petroleum blowout in the Gulf of Mexico, controlling the gasses and pressures in an oil well has seen dramatic changes in safety rules and government regulations. For many years, WESTEC has been accredited through the International Association of Drilling Contractors (IADC) and offers classes in basic drilling; workover/ completion; and subsea (offshore drilling). All of these classes are offered at the supervisor level. A one-day, “Introduction to Well Control” class is held every Friday for those new or interested in the industry. WESTEC has recently been approved to offer IADC’s coil tubing class, which covers how to control a well during operations with a coil tubing rig. These classes are offered every week of the year at WESTEC’s North Kern Training facility. However, the organization is available to teach classes anywhere in the world. WESTEC partners with the West Kern Community College District. Most petroleum courses are completed through Taft College, with students earning college credits.

Gary Boren is a WESTEC program manager.

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West Kern’s solar-steam system recovers oil, cleans air

KERN BUSINESS JOURNAL

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Sun and oil do mix

By Janelle Schneider

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ust as the saying goes about good managers making themselves irrelevant because they have effectively trained their staffs, the new, stateof-the-art GlassPoint solar enhanced oil recovery project in Kern County presents the Valley Air District with a happy paradox: because the technology produces no emissions, the Air District’s approval is immaterial. Eventually, perhaps, across-the-board technology in all aspects of valley lives – work, leisure and recreation – will render the necessity of an air regulatory agency redundant. But for now, the Berry Petroleum Co.’s 21Z Solar Project near McKittrick is a stunning example of the possibilities of solar that transcend modest rooftop arrays and can virtually eliminate some of the emissions associated with oil production. The technology produces steam used for thermally enhanced oil production with solar energy instead of natural gas, delivering up to 1 million BTUs per hour of solar generated steam. “The Air District has always believed in the great potential of the valley to produce its own solutions to our vexing air-quality issues, and this project is an outstanding example of what is possible,” said Seyed Sadredin, the Air District’s executive director and air pollution control officer. Although this project was not a result of the Air District’s new Technology Advancement Program (TAP), which provides monetary incentives for the development of technology that will help to remedy the valley’s air-quality challenges, it represents just the kind of project that excites the Air District. Oil and gas production throughout the air basin contributes annual emissions in multiple pollutant categories, including total organic gases (more than 20 tons per day), reactive organic gases (more than seven tons per day), nitrogen oxides (about 111/2 tons per day) and fine-particulate matter (PM2.5) (more than 1-1/2 tons per day). While natural gas is a far cleaner method of steam production than fossil fuel, solar is the cleanest method possible and helps reduce these bottom-line emissions. “The air basin is at a point in its quest for attainment of federal health standards that every emission source is significant,” Sadredin said. “Reducing even smaller sources from the emissions inventory is critical in achieving these standards.” In addition to being an important component of the total air-cleanup strategy, implementing new technologies, such as solar steam generation, brings a host of co-benefits to the valley, including the need for new jobs and training opportunities, economic development and the attraction of additional forward-thinking technologies to the region. “Business has been at the forefront of our work to clean up our air and in the investment of billions of dollars for that work, and their support continues, as this project demonstrates,” Sadredin said. Janelle Schneider is an air quality public information representative with the San Joaquin Valley Air Pollution Control District.

Photo courtesy of GlassPoint

In February 2011, GlassPoint unveiled the world’s first commercial solar enhanced oil recovery project at Berry Petroleum’s 21Z property in western Kern County.

Solar energy harnessed to help produce Kern’s oil By John O’Donnell

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s the oil and gas industry matures, a new challenge is becoming increasingly prevalent: going after the difficult barrels. Younger oil fields often have oil that’s easy to produce; whereas older wells contain heavy crude, or crude in tight formations, that is much more difficult to bring to the surface. Thermal enhanced oil recovery (EOR) – steam injection – is a primary tool to harvest these difficult barrels. Today, about half of California’s production relies on it. Thermal EOR works by injecting steam into a well to heat the formation, reducing oil viscosity and speeding up flow. Thermal EOR can add years to the economic life of an oil field and increase the total amount of oil produced. Making the steam needed for thermal EOR requires an enormous amount of fuel. In the 1960s, that fuel was crude oil. By the 1980s, natural gas became the primary source of steam. GlassPoint Solar has developed a new type of EOR steam generator, running on another unconventional resource: sunshine. Solar energy is now ready to deliver most of the steam for oil production in California -- reducing costs, expanding production and reducing emissions. In February 2011, GlassPoint unveiled the world’s first commercial solar EOR project at Berry Petroleum’s 21Z property in western Kern County. Built in less than six weeks, the system delivers approximately 1 million BTUs per hour by harvesting sunshine. GlassPoint worked with local firms TJ Cross Engineers and PCL Industrial Services to build the system, which spans 7,000 square feet of land on the 100-year-old oil field. The pilot “enclosed trough” steam generator system delivers heat into Berry’s operations, reducing fuel used to make steam at 21Z. The Kern County installation caught the attention of Petroleum Development Oman (PDO), a worldwide leader in EOR. In partnership with PDO, GlassPoint recently brought California’s solar EOR technology to the Middle East, commissioning a 7MWth system in PDO’s Amal West field in Oman on time and ahead of schedule. Like California, Oman is an ideal environment for solar EOR, with excellent sunshine and substantial heavy oil resources. GlassPoint’s technology addressed the challenges of the Middle Eastern oil field, including limited operations staff, high local dust and dirt from operations, integration into existing facilities and a large demand for thermal energy in a small space. GlassPoint’s system was designed to meet the oil field challenge and has now been proven in the field. Middle Eastern and

California oil fields are dusty and windy – which makes solar systems expensive to build and to keep clean. GlassPoint’s approach moved the problem indoors – into an agricultural greenhouse. The “enclosed trough” system puts the solar mirrors inside, allowing long-term durability in harsh environmental conditions. GlassPoint’s lightweight mirrors weigh one-tenth as much as traditional solar mirrors, and are shielded from the effects of wind, dew, rain, dust, sand and humidity. Fully automatic washing equipment for these structures allows daily washing to maintain operations, without the operational cost and safety challenges of large field crews. With the success of these two solar EOR projects, largerscale systems are on the horizon in both regions. California’s future oil production depends heavily on thermal recovery technology, with more than 40 percent of the state’s production coming from thermal EOR. Steam accounts for roughly 70 percent of perbarrel production costs. Solar EOR reduces costs for fuel, reduces risks of carbon price volatility, and offers premium pricing for solar-steamed fuel through the Low Carbon Fuel Standard (LCFS). Solar steam in California keeps our dollars in state. Instead of importing gas from outside California, we build construction and operating jobs, and tax revenues here in Kern County. By reducing the need for fuel, solar steam reduces the largest and most variable part of thermal recovery production costs, and will expand and keep our oil field operating and construction jobs longer. In the San Joaquin Valley, GlassPoint delivers steam at a fixed cost unaffected by changing fuel prices, while improving summertime air quality and reducing compliance costs. Oman faces additional unique conditions. Natural gas is scarce and expensive in Oman. By replacing natural gas with solar, GlassPoint’s solution enables Oman to redirect natural gas saved to higher-value applications within the country, such as industrial development. In turn, solar EOR helps to create local jobs and generates in-country value for Oman. Although pairing solar energy with oil recovery may seem like an unusual combination, solar EOR has proven to be an elegant solution for intelligent applications from Oman to California -- and beyond.

GlassPoint’s approach moved the problem indoors — into an agricultural greenhouse

John O’Donnell is the vice president of business development for GlassPoint.


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California sets grape records with 2012 â&#x20AC;&#x2DC;crushâ&#x20AC;&#x2122; Californiaâ&#x20AC;&#x2122;s 2012 grape harvest was the biggest ever, according to the California Department of Food and Agriculture. The 2012 â&#x20AC;&#x153;crushâ&#x20AC;? came to nearly 4.4 million tons. That was up 13 percent from the year before, and 1 percent higher than the previous record in 2005. Kern is one of the stateâ&#x20AC;&#x2122;s top grape-producing counties. California also set a record in 2012 for the volume of grapes its growers exported. California shipped the equivalent of 101.5 million 19-pound boxes of fresh California grapes during the 2012 season.

California produces 99 percent of the commercial fresh grapes grown in the U.S., exporting the commodity throughout the world. In 2012, a reported 41 percent of the crop was exported. That volume has significantly increased from just over 20 million boxes in 1971, 50 million in 1982, 60 million in 1988, 70 million in 1995, and 90 million boxes in 1997. Shipments approached 100 million boxes in 2008, 2010 and 2011 and broke through in 2012. â&#x20AC;&#x201D; Kern Business Journal

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KERN BUSINESS JOURNAL

Navy invention at China Lake leads to biofuel

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Turning switch grass to jet fuel

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ear Adm. Paul Sohl, commander of the Naval Air Warfare Center, Weapons Division, at China Lake, recently signed a coexclusive patent license agreement between the Weapons Division and Mountain View-based Cobalt Technologies that includes a suite of inventions covering technology capable of converting butanol to “drop-in” jet fuels. The technology was developed by scientists at the Weapons Division. The Weapons Division’s alcohol-to-jet fuel team developed and pursued patent protection for a series of catalytic reactions that effectively convert n-butanol to alternative fuels that, when blended with petroleum fuels, meet and exceed the strict Navy guidelines for JP-5 (jet fuel) and F-76 (ship fuel). This technology is considered a commercially viable solution toward meeting Navy Secretary Ray Mabus’ Great Green Fleet objective, which targets the production of 8 million gallons of alternative fuels for fleet use by 2020. Cobalt Technologies is a small business that produces bio-n-butanol from renewable feedstocks and the first industrial entity to license this technology. The company recently received a Department of Energy award to more fully develop this alternative fuel processing using the licensed inventions of the Naval Air Weapons Command’s Weapons Division. Scott O’Neil, the NAWCWD’s executive director, said he is pleased that the investment made in research and development has transitioned into a technology highly valued by industry. “We’re using innovative R&D (research and development) results to create intellectual property that’s now licensed to the commercial sector to create products that will ultimately benefit the warfighter,” he said. The Naval Air Warfare Center Aircraft Division, which tested the alternative fuels produced by this innovative technology, also played a critical role in its evaluation. “This whole Navy-industry collaboration presents an opportunity to bring a potentially costcompetitive route to alternative fuels from renewable resources,” O’Neil said, adding that the Weapons Division “will continue to develop new and innovative strategies for fuels that include JP-5 and F-76 and may eventually expand to alternative and heavy fuels related to tactical weapons. We invent, that’s what NAWCWD does.” — Naval Air Systems Command

Department of Defense

A Navy airman signals the launch of an E-2C Hawkeye aircraft from the catapult on the flight deck of the carrier USS Enterprise. Researchers at the Naval Air Weapons Center, China Lake, and Cobalt Technologies Lab are developing a biofuel that may one day power these jets.

Grass-to-jet fuel project taking shape in Navy T

he U.S. Energy Department’s National Renewable Energy Laboratory is partnering with Cobalt Technologies, the U.S. Navy and Show Me Energy Cooperative to demonstrate that jet fuel can be made economically and in large quantities from a renewable biomass feedstock, such as switch grass. “This can be an important step in the efforts to continue to displace petroleum by using biomass resources,” said Stan Schell, NREL manager for bioprocess integration R&D. “We’re converting biomass into sugars for subsequent conversion to butanol and then to JP-5 jet fuel.” It’s one of four biorefinery projects funded recently by the Energy Department as part of the administration’s efforts to support renewable biofuels as a domestic alternative to power military and civilian aircraft and vehicles NREL’s pretreatment reactor and enzymatic digester reactors will process switch grass into fermentable sugars. NREL’s 9,000-liter fermenters will then produce butanol from the sugars using Cobalt Technologies’ proprietary microorganisms and fermentation process. A co-exclusive patent license agreement between the Navy and Cobalt Technologies is providing the technology and expertise for converting the butanol to jet fuel. Show Me Energy Cooperative of Centerville, Mo., will provide the switch grass feedstock. Show Me Energy’s headquarters also is a potential site for a new, larger biorefinery if the demonstration succeeds. NREL will be combining its pretreatment, enzymatic hydrolysis and fermentation expertise with Cobalt’s promising

Department of Defense

The afterburners of a Navy F/A-18 Hornet glow as the aircraft launches from the aircraft carrier USS Theodore Roosevelt. Work is underway to someday power these jets with biofuels.

microorganisms to produce the butanol intermediate, said NREL engineer David Sievers. Technology originating from Cobalt and the Navy will be used to turn butanol into jet fuel at the NREL biorefinery pilot plant. The process will use the Navy’s unique catalyst systems. The goal is to show that the Cobalt-Navy bio-jet fuel can be a cost competitive alternative that meets military specifications, while using non-food based biomass as a feedstock, thus reducing the Department of Defense’s dependence on petroleumbased products. The results of testing will help determine whether the process is ready for commercial scale. If so, the U.S. Depart-

ment of Agriculture and the Department of Defense are poised to help private firms build the huge biorefineries that would be needed, Schell said. The project could lead to big gains in jet-fuel manufacturing in the United States and a boost for jobs in rural America. Using biomass, rather than petroleum, offers the advantages of improved energy security, less price volatility and a smaller impact on the environment, Bolin said. The process is expected to result in a 95% reduction in greenhouse gas emissions compared to the current production of jet fuel. — National Renewable Energy Laboratory


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Navy looks to sun, geothermal for energy By Peggy Shoaf

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â&#x20AC;&#x153;Flip the Switchâ&#x20AC;? ceremony was held last fall on board the Naval Air Weapons Station, China Lake, to recognize a 118-acre photovoltaic plant. â&#x20AC;&#x153;China Lake is a leader in R&D (research and development) for advanced weapons, so it is only fitting for China Lake to also be an energy leader for the state, for the country and for the Navy,â&#x20AC;? said Acting Assistant Secretary of the Navy for Energy, Installations and Environment Roger M. Natsurhara during the ceremony. â&#x20AC;&#x153;You already have an enormously important geothermal plant producing up to 270 megawatts, far beyond any other alternative energy source the Department of Defense has. And now youâ&#x20AC;&#x2122;ll have the second-largest solar array within DoD, as well,â&#x20AC;? Natsurhara noted. The array has the capability of producing 13.78 megawatts of renewable energy â&#x20AC;&#x201C; enough to power 3,500 homes. It was the first Navy solar power plant to be executed using a power purchase agreement under Title 10 USC 2922, a long-term contracting authority mechanism, which allows a defense agency project to be owned and maintained by a third-party investor, rather than through federal budgets and shorter term agreements. It required no upfront investment from the U.S. Navy and allows the station to secure electricity below cost and should (could) save the Navy up to $13 million dur-

U.S. Navy Photo

Coso Geothermal, constructed on the Naval Air Weapons Center, China Lake, is one of the worldâ&#x20AC;&#x2122;s largest geothermal plants. It began generating power in 1987.

ing a 20-year span. The plant was designed and built by SunPower Corp. at no cost to the taxpayer. The Naval Air Weapons Station buys the electricity produced by the plant from SunPower. It provides up to 30 percent of the stationâ&#x20AC;&#x2122;s energy needs and up to 70 percent of the summer peak daytime electricity requirements. Coso Geothermal, one of the worldâ&#x20AC;&#x2122;s largest geothermal plants, was constructed using private capital, through a public-private venture capital contract agreement with a third-party developer. The first power was generated in July 1987. Using nine turbine generator sets at four power plant sites, the

plant has the capacity of producing 270 megawatts to Southern California Edison, enough to meet the needs of about 1.1 million people (27,500 households). Coso is a liquid-dominated resource that produces both hot brine and steam simultaneously. This is opposed to a vapor-dominated field, such as the Geysers, that produce only dry steam. The fluids at Coso flow to the surface under their own pressure. Once on the surface, they are transported via pipeline to a high pressure separator where the pressure is decreased and the fluids flashed to high pressure steam. The steam is recovered and sent

to the turbine on the power block. The brine (unflashed fluids) then passes to a low-pressure separator, where it undergoes another flash process that yields low-pressure steam, which is also sent to the power block to be introduced into the turbine. The remaining brine is injected into the ground where it is reheated and used to harvest additional heat from the surrounding hot rock. Once at the power block, geothermal electricity production is no different than processes using other fuels, except that the emissions from the power production process are very clean. There is minimal carbon monoxide, hydrogen sulfide, and no particulate hydrocarbons or fly ash. At Coso, all hydrogen sulfide is removed, converted to sulfur powder and sold to agricultural interests in Bakersfield. The carbon dioxide emissions are 20-times cleaner than the cleanest natural gas-fired power plant. In fact, geothermal energy is the cleanest of all baseload electricity generation. The Naval Air Weapons Station also is home to seven sets of photovoltaic carports, which produce 2,800,000 kilowatt hours, with an annual cost avoidance of $404,000. It also has photovoltaic rooftops on three facilities on base, generating 830,000 kilowatt hours, with an annual cost avoidance of $210,000. The Department of the Navy has set a goal of meeting half of its energy consumption with alternative sources by 2020. Peggy Shoaf is the public affairs officer at the Naval Air Weapons Station, China Lake.

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BUSINESS PROFILE: Braun Electric Co.

Braun Electric Co. services focus on oil field safety, innovation How has instrumentation in Kern County’s oil and gas fields changed over the more than four decades Braun Electric has been in business?

Ed Ott is the president and chief executive officer of Braun Electric Co. Ed Ott reflected on the increasing and changing demands of providing electrical service to Kern County’s oil fields. In Ed Ott this business profile, he answered questions posed by the Kern Business Journal staff.

An evolution from analog instruments to fully digital and wireless controls has fueled an extensive and rapid update of most facilities. As such, only firms dedicated to understanding the trend and adapting to the highly technical aspects are in a position to provide support to the tasks and activities required to complete the work. In some cases, it takes multiple companies to fully execute such a change, each specializing in a particular segment of the project. Braun is a major participant in the natural transition of electrical work to high tech transmitters and digital applications encompassing approximately 60 percent of the work. The company has invested in an internal team focused solely on keeping Braun Electric Co. on the cutting edge of technology. For instance, in the past, companies would write and fill out forms every day. It required time, it was vulnerable to human error, and it was not as efficient as it could be. Today, Braun is rolling out the use of iPads in the field to provide better service to clients. Accessibility to information is increasing in accuracy and faster than ever before.

What is Braun Electric?

Braun Electric Co. is a premier electrical and instrumentation contractor, based in Kern County since 1945. The company’s priorities remain employee safety, customer service and the delivery of the best equipment available today. Braun is the leading electrical and instrumentation contractor in the oil and gas industry for the San Joaquin Valley. Braun serves mostly the upstream oil and gas businesses on Western Slope and San Joaquin Valley assets. The company performs work on overhead power distribution, pumping units, processing stations, gas and water treatment facilities, transportation hubs, ductbanks, substations, motor control centers and PLC controls. By focusing on industrial projects, Braun has learned to refine processes and focus resources more specific to that type of work. Braun’s clients are confident in its preparation and execution of all work resulting in a high degree of quality without sacrificing safety. Braun maintains consistent quality for all clients and shares the same standards of safety.

What advances do you see in the future?

When was the company started?

In 1945, the Braun Electric Co. began providing contracting services from its location in Taft, Calif. When John Braun and Kevin Coghlin bought the business, the company grew to what it is today through a vision of putting employees and clients first. By making clients partners and employees cherished team members, Braun exceeded goals it had set out to meet. Considered a benchmark organization in many respects and functionally capable of managing a sizable workforce, Braun hangs its hat on investing in each team member and leader by fully developing each person to the best of their abilities, offering endless opportunities to those who are committed to the company’s vision. Braun Electric prides itself on its safety record. Why is that so important?

Safety is the foundation for Braun’s operations. No pursuit of a dollar or finished product is worth the life of even one individual. The work performed by the company and what the clients or partners do every day is dangerous work. Braun does not take safety lightly. As a result, everything from vehicle operation to working in the field is detailed in specific guidelines and requirements to ensure team and client safety. When the industry behaves with safety in mind, the probability of a catastrophic event is severely diminished and the community will benefit from it. Braun Electric is one of the founding donors to California State University, Bakersfield’s Aera Energy Occupational Safety and Health Management Program. Why invest in such an educational

Photos courtesy of Braun Electric Co.

Serving mostly upstream oil and gas businesses on Western Slope and San Joaquin Valley, Braun Electric Co. performs work on overhead power distribution, pumping units, processing stations, gas and water treatment facilities, transportation hubs, ductbanks, substations, motor control centers and PLC controls. program?

Investing in the community, education and fellow residents is the only way anyone will grow and succeed. Braun believes not only in human endeavor, but also in extending a helpful hand when fellow neighbors need it the most. When it comes to safety, Braun will always voice support 100 percent. Community, education and growth are keys to what Braun stands for. How does Braun Electric recruit and train its skilled staff?

Although college is important, Braun also tries to look at other avenues of op-

portunities. When the company is involved in hiring and recruiting, which is a regular occurrence, Braun looks not only for training and educational background on resumes, but also for experiences, such as work ethic, reliability, passion and dedication. Braun’s team members are not only educated, but also have the requirements and certifications to do the job. Team members are dedicated, determined and willing to go the extra mile. The company believes in having leadership that guides the team in the right direction. Braun is always accepting resumes and seeking people interested building careers.

There needs to be movement away from traditional business thinking and radically reinvent business systems to meet the extreme demands of a sector requiring extensive amounts of information in real time. To do this, there must be engagement with the best minds, technical tools, and feedback accessible within the business world. In an industry and business that is ever changing, Braun will rise to the challenge and meet all opportunity with open arms and strategic planning. Why are instrumentation and efficient electrical systems so important to oil and gas producers?

Environmental law and corporate governance are not just law. They are an excellent way to track the results of what businesses produce and the effects they have on the environmental output. Technology and electrical components/systems will lead the innovation to achieve the environmental targets of better air and water. Braun is proud to be part of the reinvention process and, at the same time, be able to work concurrently with clients to minimize down time, thus further reducing emissions and use of water. What oil field innovations has Braun Electric helped pioneer?

Braun innovations include fully automating safety planning in the field and cross integration of real time cost management. How does Braun Electric stay on the cutting edge of its industry?

Teamwork is critical to the technically precise work performed by Braun Electric Co. staff.

Braun stays on the cutting edge by setting goals, including a five-year plan with stretch goals and realistic objectives necessary to maintain benchmark status. Braun also provides leadership in the industry segment with regards to business management, safety, advanced planning and best value as a service provider. The company is known for meaningful innovation that provides clients value, which is based on client-defined value drivers. Braun operates on a principle of staying ahead of trends in the industry.


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KERN BUSINESS JOURNAL

Human Resources

New law keeps employers out of workers’ genes By Robin Paggi

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hen I conduct harassment and discrimination prevention workshops, I include the fact that it is illegal to discriminate against applicants and employees because of genetic information obtained by the employer. Invariably participants give me a puzzled look – how could an employer obtain genetic information about someone and why would they want to? A recent lawsuit answers those questions and demonstrates what can happen to an employer as a result. Title II of the Genetic Information Nondiscrimination Act (GINA) took effect in 2009. According to the Equal Employment Opportunity Commission (EEOC), the government agency that enforces GINA, genetic information includes, “Information about an individual’s genetic tests and the genetic tests of an individual’s family members, as well as information about the manifestation of a disease or disorder in an individual’s family members (i.e. family medical history).” In other words, employers are not allowed to ask applicants and employees about their family medical history to find out what kinds of diseases or disorders they might inherit and then base employment decisions (whether to hire, promote, fire, etc.) on that information. According to the EEOC, a company called Fabricut Inc. did just that and was sued by the agency for doing so. In a press release dated May 7, 2013, the EEOC reported that when Rhonda Jones, a temporary employee at Fabricut, applied for a permanent position there, she was sent to a medical examiner for a pre-employment drug screen and physical after being offered the job. While there, “she was required to fill out a questionnaire and disclose the existence of numerous separately listed disorders in her family medical history.”

After her medical testing, the examiner decided that Jones needed to be evaluated by her personal physician to determine whether she suffered from carpal tunnel syndrome (CTS). After a variety of tests, Jones’s physician said that she did not have CTS and Jones forwarded that information to Fabricut; however, the company rescinded the job offer because the lab it used Robin Paggi said she did have CTS. “Such alleged conduct violates GINA, which makes it illegal to discriminate against employees or applicants because of genetic information, which includes family medical history; and also restricts employers from requesting, requiring or purchasing such information,” the EEOC concluded. The agency sued Fabricut and the company agreed to pay $50,000. This was the first GINA-based employment discrimination lawsuit filed by the EEOC, but based upon this statement in its May 7 press release, it won’t be its last. “One of the six national priorities identified by the EEOC’s Strategic Enforcement Plan is for the agency to address emerging and developing issues in equal employment law, which includes genetic information,” the press release warned. “Although GINA has been law since 2009, many employers still do not understand that requesting family medical history, even through a contract medical examiner, violates this law,” EEOC Regional Attorney Barbara Seely explained. Employers that require medical examinations would be wise to check with their medical examiners to ensure they are in compliance this law. Robin Paggi is the training coordinator for Worklogic HR Legal Solutions.

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Kern’s economy continues to ‘gain steam’ As Kern County’s economic recovery continues to gain steam, federal data show that more local businesses and consumers have shaken off the Great Recession and resumed borrowing money and making loan payments on time. Besides reviving the generally profitable activity of lending, Bakersfield bankers say the recent trend amounts to a broad-based expression of economic confidence that they haven’t seen in years. Bruce Jay, president and CEO of Valley Republic Bank, said this spring has seen a dramatic increase in loan applications from local oil service companies, growers and real estate developers. Local credit unions are witnessing a similar surge in lending as growing numbers of consumers have rebounded financially and taken out loans to refinance their homes or buy a vehicle. The latest financial reports filed by Bakersfield-based banks and credit unions document solid improvements in lending, loan delinquencies, bad debt and overall profitability. These gains are considered encouraging because these banks serve primarily local businesses, just as the credit unions consist of mainly local consumers. — The Bakersfield Californian

SERVING AND GROWING SINCE 1945

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KERN BUSINESS JOURNAL

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BUSINESS PROFILE: Safety Management Systems (SMS)

National safety firm expands to serve Kern’s oil fields Jim Shackelford is the West Coast regional manager of Safety Management Systems. He holds an associate’s degree from Southeastern Louisiana University in occupational health and Jim Shackleford safety, and received his Certified Safety Professional (CSP) designation in 2008. The CSP credential is the mark of the safety professional and is awarded to individuals who have met educational and experience standards, and passed rigorous examinations validated against the practice of hundreds of safety professionals. Shackelford recently answered the Kern Business Journal’s questions about his company and the importance of safety management to all industries, particularly the oil and gas industries. What is Safety Management Systems (SMS)?

Safety Management Systems provides lifesaving services throughout the United States and Canada. As one of the largest providers of health, safety, environmental, medical, security and training services, we are committed to our mission of protecting lives and changing cultures, worldwide. We provide HSE consultants, industrial hygiene technicians, wellness coordinators, remote paramedics, and H2S services for many of our clients throughout the United States, including those in the Bakersfield area. Our world-class 96,000-square-foot training academy is located in Lafayette, La., and provides the most complete training services available. We offer customizable on-site training for many clients. We are always learning from our customers and currently expanding our service line to include security services, working with our sister company, Acadian Monitoring Services. Through our services, we can help clients achieve an injury-free work environment.

Photos courtesy of Safety Management Systems

SMS employees conduct a safety meeting before heading to a work site. Safety Management Systems’ main goal is “protecting lives and changing cultures.” SMS provides companies in the oil and gas industry with safety management and consulting services to promote and maintain an ethical workplace atmosphere that equally values health, safety and environmental responsibility. What trends are you seeing or expecting?

As jobs increase, the amount of training workers need to maintain high levels of safety also increases. With the advance in clients’ safety cultures, we work hard at facilitating knowledge of safer practices and ensuring the workforce complies with the client’s written plans and safety policies. The majority of the work force learns by doing, and even with classroom education, the skills have to be honed by on-the-job experience. We are working very hard to ensure safety is present during that period so the high-risk stage of building job skills necessary in the patch is achieved without incident.

How long has your company been in business?

Safety Management Systems (SMS) has been in business since 1981, currently operating in the United States and Canada. SMS’s corporate office is located in Lafayette, La., and regional offices located in Bakersfield, Calif.; Calgary, Canada; Houston, Texas; Denver, Colo.; Shreveport, La.; Mandeville, La,; and Wellsboro, Penn.

What does this trend mean for both independent producers and bigger companies?

Why has it expanded to Kern County?

As a local provider of remote paramedics in the Gulf of Mexico, SMS in 2009 made a conscious effort for regionalized expansion throughout the United States. We wanted to expand our footprint in the West Coast region and Kern County was a prime location. We acquired a local company with the same core values as SMS and opened our West Coast office in Bakersfield in 2012. We currently have over 50 employees in Kern County.

Ryan Hester, SMS industrial hygiene technician, tests for asbestos at a work site. SMS’ industrial hygiene team provides surveys that encompass numerous exposure issues for employees, such as asbestos, lead, NORM and radiation.

Why is safety so important in the oil patch?

How are you helping to make energy production safer for workers, the public and the environment?

Safety is important because it is a value and moral obligation to our clients and the families of the people who work for them, be it contractor or company personnel. We

help our clients and their work force with that value of being safe. While sometimes it is a challenge, it is always rewarding.

We help facilitate functional and effective solutions and understanding to what may seem to be confusing and conflicting regulations and requirements. We provide

support to the work force and provide real-time answers and support to challenging questions and issues that arise in the changing work place. We help maintain an injury-free work environment for our clients. Through our HSE consulting services, we support our clients’ operations by creating policies and procedures, interfacing with industry regulation databases, and implementing management programs for contractors.

Through this trend, SMS works with producers and contractors to identify at-risk behaviors. When we learn of these behaviors, we communicate them to the providers. This communication increases work site safety, thus creating a safer work environment. What does this trend mean for Safety Management Systems?

We are constantly learning and educating not only our clients, but ourselves on new safety standards and protocols. We identify at-risk behaviors through which we will assist our clients in creating a safer work environment and in maintaining a safety culture.


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KERN BUSINESS JOURNAL

Dick Taylor: Veterans Service Officer

Local veterans face challenges finding jobs Dick Taylor, a former Bakersfield business owner, who later entered Kern County government service, has spent a lifetime working with veterans. After his service in the U.S. Marine Corps from 1975 to 1979, he worked with such service-related groups as the annual Marine Corps Volkslauf Run, the Devil Pups youth encampment and the Honor Flight program. In Dick Taylor December, supervisors appointed Taylor to head the county’s Veterans Service Department. Taylor recently responded to questions posed by the Kern Business Journal about his new post. What challenges do young veterans face today?

The top challenges remain employment, education and housing, as well as obtaining counseling and treatment for medical and psychological issues. What steps can veterans take to transition from military to civilian lives?

Spending time in the military getting educated and better prepared for civilian life is a veteran’s responsibility. The military is a way up for many young men and women. It is an opportunity to grow up and learn job and life skills. While it is not an easy path, it is a great path if you take full advantage of all the opportunities that are available. The military is all about teamwork and competition. You don’t get promoted in the military by displaying mediocrity on the job. You get promoted by working hard and bettering yourself by becoming knowledgeable and skilled. The job market also is competitive. It’s not easy. Use the skills learned in the military to market yourself. Be flexible in your job search. Be smart. When applying for a position, be prepared to explain to potential employers in writing and verbally why you are better than other applicants. Trust in yourself, yet be humble. Veterans often have difficulties assessing their capabilities.

Some tend to have a narrow view of what they can pursue as a career. If you served as a machine gunner, an aircraft mechanic, or any one of a thousand other military occupation specialties, you are likely a candidate for wide range of jobs. And remember the 14 leadership traits learned in the military: Justice, judgment, dependability, initiative, decisiveness, tact, integrity, enthusiasm, bearing, unselfishness, courage, knowledge, loyalty and endurance. Employ these traits in your job search. Depending on your family situation, consider expanding your education by going back to school. Military service provides incredible after-service education benefits. Be cautious of work-athome employment scams and arrangements requiring applicants to pay for jobs. Make “looking for a job” your transitional job once you exit the military. If you delay, you may be outsmarted by other applicants. Apply for several jobs, not just the one you “must have.” The best outcome is to have multiple job offers. What can the business community do to help today’s veterans?

Seriously consider hiring veterans. For information about partnering with others in our community, or joining the Kern Patriot Partnership, call 661-868-7300 or kernvets@co.kern.ca.us What are your top priorities as the county’s veterans service officer?

Encourage veterans to visit the Kern County Veterans Service Department to learn about their benefits. Staff also is improving the department’s website to make it more useful. We plan to work our tails off to be advocates for veterans. That includes pressing the U.S. Veterans Administration to reduce the amount of time it takes to process claims. We also plan to partner with employers, federal, state and local agencies, businesses and organizations to provide employment opportunities for veterans. We hope to make Kern’s Veterans Service Department a nationally recognized, innovative leader.

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Mello received SBA’s Central California award The Small Business Administration Fresno District Office has awarded Gabriela Mello the 2013 Central California Financial Services of the Year Award. The award was presented by SBA as part of National Small Business Week celebrated nationally in June. The Kern County Hispanic Chamber and Mission Community Services Corp., as part of National Small Business Week, hosted the award presentation in Bakersfield. Mello was selected for the award due to her advocacy efforts and her commitment to support entrepreneurs in business entrepreneurship. Gabriela was nominated for the award by the Mission Community Services Corp., and Women Business Center, which provides services in Kern, San Luis Obispo and Monterey counties. Mello has an extensive background in business lending. Starting as a bank teller, she has worked her way up in the financial world to manage several valley bank branches and has worked as a community relations officer to promote programs for small business assistance. She currently serves as community development officer at Wells Fargo, covering five counties in Central California and the Central Coast. --U.S. Small Business Administration


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KERN BUSINESS JOURNAL

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BUSINESS PROFILE: Lincoln Financial Advisors

Planners help clients consider entire ‘financial picture’ retirement accounts and drafted a will at different times in their lives. It is our role to coordinate each part and make sure it all works together in a custom fit for you and your family. In addition, my team and I specialize in maximizing employee benefits packages according to our clients’ specific needs and goals. In recent months, we have enjoyed working with several area hospitals and have helped them in this area.

Debbie Charpentier is a registered representative of Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Debbie Charpentier Lincoln Marketing and Insurance Agency LLC, and Lincoln Associates Insurance Agency Inc. Debbie Charpentier answered the Kern Business Journal’s questions regarding financial planners and the services they provide to individuals and businesses.

How can a company help its employees prepare for retirement?

Technology offers wonderful tools that allow employees to take care of many different needs in shorter amounts of time. Consider the pace of life nowadays. The Internet is very much a blessing. But is it also a curse? Although there are numerous tasks that can be accomplished online, financial planning is not one of them. “Retirement” and “financial independence” means different things to different people. There is no one-formula solution, and as such, the preparation for these goals is customized for each individual and his/her circumstances. To plan someone’s future must be done with purpose, patience and understanding. It will also take time and attention -- the kind of attention technology cannot provide. While online enrollment for 401(k) and 403(b) plans is most definitely helpful with logistics in large companies, enrollment success will be much better when personalized customer service is also available for employees.

Why do people need the help of financial planners?

The right financial planner is an advocate who proactively plans for a better return on investments for his/her clients. The “planner” part of a financial “planner” also can steer a portfolio in the right direction when tax law changes are on the horizon. This takes what could be financial lemons and turns them into financial lemonade! Remember, planning ahead means taking advantage of changes, not the other way around. By taking the time to get a second set of eyes or second opinion, investments and financial plans are truly put in order. There is a relief that comes with knowing a road map is set and that there is a direction for creating a healthy portfolio. Of course, this often means adjustments and financial planners can help make smart adjustments. People can be paralyzed by information overload. Often, discussing money matters at home is not easy. Having a third party to objectively orchestrate the conversation may be a huge help! Working with an advisor who is independent and can offer a wide variety of financial solutions provides a client with the many possibilities for growth. Objectivity is key. Our office recommends many other products besides Lincoln products on a regular basis, according to clients’ needs and goals. With a “best of breed” approach, clients have access to products from other highly rated companies, private money managers, public and private REITs, mutual fund managers, life insurance and long-term care providers. What are some of the biggest challenges facing individuals and business owners regarding planning for their financial futures?

How can business owners better prepare for their own financial needs?

Henry Barrios / The Bakersfield Californian

Planner Debbie Charpentier, right, and associate Milan Torres help local business owners and their employees plan secure financial futures. Many clients work in Kern’s century-old oil industry.

Figure 21 Confidence That Retirement Savings Are Invested Wisely , Among Savers

Workers

Retirees

First of all, business owners need to get real about being “too busy” to prepare for their own financial needs. Face it, you will always be busy. Take the time today to sit down with a financial planner and start a plan. Don’t wait until you have it all organized, all put together in perfect order. Business owners have so many details to consider: Projects, revenue, employees, retaining key employees, etc. Add to this the pressure of a marriage and children. Balancing all of these is an extraordinary calling at best. Be the professional you are and look for the service of another professional to lay the groundwork for the rewards of your success. How can a business plan pass operations to the next generation?

54%

The success of a business over the long term hinges on the foresight to know noth34% 31% Successful people multitask and wear ing lasts forever. While it does not have to many hats. It’s a juggling act that takes time, be as morbid as a key person in the busiexpertise and dedication. But everyone has ness operations dying – although that is 14% 10% 9% limits. There is only so much time in any certainly a fact of life – there are many other 6% 5% one day. When it comes to taking care of reasons to prepare a well-thought-out, well0% intricate personal financial details, while also documented and well-executed succession Very Confident Somewhat Not Too Confident Not At All Confident Don't know / busy making money/running a business, plan. People retire, health issues can occur Confident Refused why not leave that up to another more-thansuddenly, or perhaps it is just simply time capable group: financial planners? Like their to pass the torch on to the next generation. multitasking clients, financial planners can Financial planners can assist business ownSource:  Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2013 Retirement Confidence Survey. also perform plenty of juggling. They can ers and key executives maximize their equity 21 take this pressure off clients by fine-tuning and ensure the financial future of their busia financial plan for them which best meets ness. When assembling succession plans, you help people nancial details with a planner. Once theinto pro-theirfinancial Thirty-one percent of workers report they had to dip savings needs to pay that for basic expenses within the past 12 their needs/goals. financial planners will focus specifically on address? cess begins, however, it’s a (25 different story.down In from 33 percent in 2011 but statistically equivalent to percentage of retirees percent, Perhaps one of the biggest months. misunder-A smaller protecting assets, transferring the business, We look at their entire financial picture fact,say clients practice of to pay for basic expenses (Figure 22). The reported likelihood 22 percent theycome had to toembrace dip into the their savings standings people have about meeting with ain 2012) building for retirement and preserving at one time, not just from a tax or legal makingand decisions with thedecreases potential toasgrow dipping investments savings and investments or household incomes rise. wealth. It’s a way to hand down a thriving financial planner is that “all theofducks needinto savings perspective, but across the board. We look their financial portfolios. For many, it even to be in a row” prior to that appointment. business to the next generation and creating for creative ideas and opportunities, which becomes Plans an enjoyable, empowering routine. Keep in mind that it is perfectlyRetirement normal to be Savings a safety net that will make that transition a our clients may not have considered before. a little uncomfortable when first sharing fi-primary vehicles that workers use to save for retirement One of the is an employer-sponsored retirement savings smooth plan, one. Most people have established insurance, What are some of the most common 36%

such as a 401(k). Eighty-two percent of eligible workers (38 percent of all workers) say they participate in such a plan with their current employer, and another 8 percent of eligible workers report they have money in such a plan, although


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KERN BUSINESS JOURNAL

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Gotcha Grab Bar inventor receiving SBDC help By Kelly Bearden

J

ack Bailey is an inventive guy. And for decades he has tried to turn his creative ideas into marketable products. Finally, at age 87, Bailey has hit the creative “jackpot.” His dream of developing a much improved “grab bar” has come true. In January, he was granted U.S. Utility Patent Number 8,353,068 B1 for his trademark “Gotcha Grab Bar.” And with the help of consultants with the Small Business Development Center at California State University, Bakersfield, Bailey is on his way to bringing his Gotcha Grab Bar to market. Bailey’s story, which illustrates the wide range of free help small business owners and entrepreneurs can receive from consultants at the SBDC program, began a few years ago when he installed grab bars in the bathroom of his Bakersfield home. Bailey’s wife complained that the commercially available bars he had installed became slick and hard to grab when wet. At least one-third of all falls in the elderly involve hazards around the house, including slipping in a bathtub or shower. The Bakersfield man set about creating a better, safer grab bar. The retired realtor consulted with engineers, builders and manufacturers as his project advanced from concept to a prototype. He also received help from consultants Tom Weir and Rod Blair at the SBDC. Blair is an inventor, himself, and a local manufac-

turer. While Bailey secured a patent for his device, Blair focused on adjusting the Gotcha Grab Bar’s design to reduce manufacturing and consumer costs. Blair, who Kelly Bearden helped develop Bailey’s prototypes, concluded that using laser-cut stainless steel and some plastic would significantly reduce costs, while maintaining quality. “What makes Jack’s grab bar so unique is that the handicapped or infirmed may grab the rail and, using an index finger trigger, twist and adjust the handle 360 degrees for optimal leveraging,” explained Weir, who is helping Bailey and his son, Steve, a “co-inventor,” find a manufacturer to mass produce the Gotcha Grab Bar. Bailey’s goal is to sell or lease the patent, or enter into a licensing agreement. Bailey is just one of many local small business owners and entrepreneurs being helped by consultants at the CSUB-based Small Business Development Center, which is one of five service centers that make up the UC Merced SBDC Network in California. The goal of the nearly three-decades-old program that is funded by the U.S. Small Business Administration is to create economic growth in communities by providing free one-on-one consulting services and educational programs. The program is designed

to help small business owners become more productive and profitable. Helping locate and secure working capital is a focus of the program, as is helping with the creation of viable business plans. This includes developing strategies that use current data and marketing research. Whether it is an entrepreneur trying to market his invention or a small business owner offering a service, the guidance and help consultants at the SBDC service center in Bakersfield provide can make a difference. Kelly Bearden is the director of the Small Business Development Center at CSUB. Photo courtesy of the Bakersfield Association of Realtors

Retired Bakersfield Realtor Jack Bailey has invented an innovative grab bar.

She’s Got Your Back “Most of us need help making practical financial decisions. I want to be encouraging, helping people move ahead with their financial lives no matter what is going on … Above all, I watch over my clients.” —Debbie Charpentier, 2012 Southern California Planner of the Year for Lincoln Financial Advisors

Debbie Charpentier 841 Mohawk Street, Suite 170 • Bakersfield, CA 93309 t. 661-322-5204 • f. 661-322-5412 debbie.charpentier@lfg.com www.debbiecharpentier.com RETIREMENT PLANNING • INVESTMENT PLANNING • LIFE INSURANCE • LONG TERM CARE • ESTATE PLANNING


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KERN BUSINESS JOURNAL

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BUSINESS PROFILE: Robert Heely Construction

Four decades in the oil patch make RHC superior, safe Craig Bonna is the president and chief executive officer of Robert Heely Construction (RHC). Headquartered in Paso Robles, Calif., since 1977, RHC is in the process of opening new corporate offices in Bakersfield. The Paso Robles office will continue to house the company’s administrative functions. RHC performs work Craig Bonna on oil leases throughout the San Joaquin Valley and Central Coast, with its largest operations in Belridge, San Ardo and Coalinga. Craig Bonna recently responded to the Kern Business Journal’s questions concerning his company and its oil field work experiences. What is Robert Heely Construction?

RHC is a full service construction company, serving the energy industry in the San Joaquin Valley and on the Central Coast. We offer a wide variety of services, including mechanical and civil construction, maintenance, abandonments, well completions support, drilling, hydro excavation, concrete services, and more. Customers include some of the largest oil producers in the world, including the largest independent producer in North America. When was RHC established?

Robert Heely started out as a contract welder in San Ardo in the early 1970s. After successfully working in the energy sector for several years, his customers encouraged him to expand his business. In 1977, he founded Robert Heely Construction Inc., headquartered in his hometown of Paso Robles.

Photos courtesy of Robert Heely Construction

Robert Heely Construction crew grades a road in an oil lease. RHC offers a wide variety of services, including mechanical and civil construction, maintenance, abandonments, well completion support, drilling, hydro excavation, concrete services, and more.

How has RHC changed and grown over its nearly four decades in the oil business?

We have both grown and improved in the last four decades. Our operations expanded to Coalinga, Belridge, and other Central and Southern California locations. In addition, our services expanded from welding and mechanical work to civil work and drilling. In 2006, Craig Bonna, our current president and CEO, became a co-owner with Robert. We adopted the red RHC logo you see on our trucks today, added more services, and grew significantly. It has been important to us to maintain our focus on safety and innovation, even as we have grown. Why is it important for an oil field service company to have years-long experience in an oil field?

The oil fields pose unique hazards. Companies need both expertise and experience to work safely and efficiently in such a dangerous setting. We are fortunate to have built great long-term relationships with our key customers. Working with oil producers is really a partnership. We collaborate closely on safety, project planning, improvements and innovation. Our long experience in the industry also allows us to see opportunities for improvement. We have a continuous improvement team specifically tasked to improve our work processes, using Lean Six Sigma. RHC has a good safety record within the industry. How did you achieve – and maintain – that record?

Safety is a core value at RHC, balanced with quality and production. We place responsibility for safety on all of our employees – from the newest to the most experienced. All of our employees receive extensive safety training, and they are encouraged to stop work if anything appears unsafe. Our supervisors, safety personnel, and managers visit the field frequently and audit our crews to ensure they are working safely and have the resources they need. In addition, we have a behavior-based safety process in which employees observe each other and help each other with safety issues. We take pride in celebrating our safety milestones with our employees. We have also been fortunate to receive regional and national awards for our safety achievements, including the Associated Builders & Contractors National Safety Merit Award. Why is this safety record so important?

We work hard to create a strong safety culture, because we want our employees to return safely to their families each day. When an incident occurs, everyone suffers – not just

Robert Heely Construction welders work on a pipeline. A Spiradrill is used to prepare a hole for a conductor on an RHC oil field job.

the person injured. Although incidents also have business and financial impacts, we value safety primarily because we care about our people. Our customers share the belief that we should never compromise our employees’ safety in favor of production, and they closely monitor their contractors’ safety performance. Besides a focus on safety, what else does RHC find critical for success as an oil field contractor?

Besides safety, our other core values are quality and production. We take pride in our expertise in project management and project controls. Our industry has become increasingly competitive. Providing high quality work on time and on budget – while remaining vigilant about safety – is critical for success. As such, we have invested heavily in fine-tuning our project management processes. Oil field construction seems like challenging and dangerous work. How do you build a team qualified for the type of work you do?

Our employees must have specialized skills – welding, heavy equipment operation, project management expertise, etc. – as well as value safety. We hire experienced workers for our higher skilled roles, but we also develop our employees’ skills in-house. We train and test our employees on all of the equipment and tools they use, as well as the job tasks

they perform. We also provide extensive safety training. What do you see in the future for Robert Heely Construction?

We expect to continue growing, but plan to do so at a smart pace. In the last two years, we have expanded our mechanical work in the San Joaquin Valley and created a concrete division. We have also taken on several new projects on the Central Coast. As we grow, we remain focused on working with customers who align with our values. Much of our growth will occur within California, but we are exploring opportunities in other states as well. As our operations grow, so do our support functions – project controls, accounting, EHS, etc. Our team in Paso Robles moved to a larger space this summer. And – perhaps most exciting for our Kern County operations – we are opening a new headquarters in Bakersfield this fall. What are some of the biggest challenges facing producers and companies like yours that are helping lift oil out of the ground?

One of the biggest challenges is finding and hiring qualified employees. There are many companies hiring from the same pool. We offer competitive wages, benefits and development opportunities to attract and retain good people. New technologies also offer exciting opportunities. The producers are developing better ways to extract and transport oil, and we enjoy the challenge of helping them implement those advances in the field.


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KERN BUSINESS JOURNAL

Ignoring contracts’ fine print can have devastating consequences By John Pryor

I

ndemnification clauses tend to “look alike” – yet each can be very different. Some are innocuous. Others are devastating! A local example occurred when a trucking firm was contracted to provide services to a drilling contractor who properly required a written contract. The agreement’s “fine print” included a broad-form holdharmless (indemnification) provision. This clause transfers the total risk from one party to the other – including the “sole negligence,” in this case, of the driller. As luck would have it, an employee of the contractor negligently injured an employee of the trucking company. What normally follows is: • The trucker’s workers’ compensation insurer provides statutory medical and disability income benefits to its employee. • The injured employee files a liability claim for damages sustained and not covered by workers’ compensation, e.g., pain, suffering, etc. – plus the difference between statutory disability income payments and the employee’s actual income. • The trucker’s workers’ compensation carrier “subrogates” against the drilling contractor for reimbursement of benefits it paid to the injured employee. Here’s the “kicker!” Because the con-

tract included a broadform hold-harmless (sole negligence) clause, each of the above steps was blocked! Instead, this is what happened: • The injured employee still files the John Pryor same liability claim – but with his employer’s own liability insurance carrier! • The employer’s workers’ compensation carrier is prohibited from recovering – through its right of subrogation -- its payments for the employee’s workers’ compensation benefits on the theory that you can’t sue yourself. • Insurance costs of the employer go way up because these claims costs are factored into the formula for calculation of future premiums — for the ensuing three years! The drilling contractor’s liability record is unaffected. Bizarre, right? Fundamentally unfair, correct? Absolutely permissible? Correct. This outcome flies in the face of a longstanding principle. It’s called the “exclusive remedy” doctrine. It means that workers’ compensation benefits are intended to be the sole obligation of an employer to an injured employee. This broad-form hold-harmless clause is so onerous that some states, such as

Texas, Louisiana and Oklahoma – all major oil producing states — have declared it unenforceable in energy contracts. They’re called “anti-indemnity” statutes. A similar bill was defeated in California’s Legislature. (It should be submitted again – and again – until it becomes law!) The solution is simple: • Read contracts very carefully before you sign them. • Recognize this unacceptable clause whenever you see “sole negligence.” • Attempt to negotiate “sole negligence” out of any contract. More acceptable forms are: • Limited hold-harmless clauses in which each party assumes responsibility for its own liability. • Intermediate hold-harmless clauses in which one party assumes the liability of the other — when both parties are mutually liable to third parties – but not the sole negligence of the other party. Your alertness to this clause and its negative outcome should be all you need to do to avoid this kind of after-the-fact “surprise” – a costly kind of surprise no one enjoys! John Pryor, a risk management consultant, can be contacted through the Small Business Development Center at California State University, Bakersfield at www.csub.edu/sbdc

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Are you an ‘Ag Fan?’ Did you know that California is the nation’s leading farm state? Agriculture fans have taken their bragging rights “on the road.” A commemorative “California Agriculture” license plate now is on sale. The plate, featuring a yellow sunburst rising over a pastoral green field of row crops with the words “Food, fiber, fuel, flora,” is California’s first new specialty license plate in 11 years. The “Ag Fan” plate will generate cash for the Future Farmers of America, 4H and other agricultural education programs. “We need new farmers in California because the average age of a farmer in our state is nearing 60,” explained Steve Lyle, a spokesman for the California Department of Food and Agriculture. The new “California Agriculture” license plate is available for sale on the state’s DMV website. The initial cost is $50, with $40 charged for annual renewal. — Kern Business Journal


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KERN BUSINESS JOURNAL

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Aera Energy partnership creates ‘leaner’ Gleaners system By Kathy Miller

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hen you combine a zeal for community service and an obsession for achieving world class performance, the result is nothing short of inspirational. Passion exudes from both sides of a unique partnership forged between the Golden Empire Gleaners and Aera Energy LLC. Together, the two organizations are on a quest to achieve maximum efficiency and safety, while meeting a significant community need. The Gleaners are on a mission to feed the hungry. They annually distribute 1.5 million pounds of donated food to more than 200,000 people. They receive no government funding and rely solely on donations, a small army of volunteers and just two paid staff members. “We do a lot, but we wanted to find a way to do more,” said Pam Fiorini, executive director of the Gleaners. “We felt that by using our warehouse space more efficiently we could increase the number of orders we fulfill by 30 percent, depending on food donations. We just had no idea where to start.” Enter Aera efficiency experts, who answered the call to enhance the “lean” in Gleaners. For more than a year Chris Hooper and Eric Nielson, process analysts, employed the manufacturing concept of Lean Six Sigma. At the Gleaners’ facility, training and coaching were conducted for the Gleaners’ staff, board and volunteers. The Aera team, with the help and support of the Gleaners, made hundreds of recommendations. “This project has been absolutely energizing,” Hooper said. “We wanted to ‘teach them to fish’ so that they could look at circumstances from a different perspective, identify waste, and take action on their own to make incremental changes. We took them through a hands-on session, where they learned lean principles by building Lego airplanes, a training that we have used at Area.” Fiorini noted the Lego lesson was a “turning point” for her staff and volunteers who had been initially skeptical. “Our team went from thinking I was nuts to being completely sold on the concepts Aera was offering. We have

Photo courtesy of Aera Energy

Aera Energy and the Golden Empire Gleaners have teamed up in a unique corporate partnership that has increased the Gleaners’ capacity to fulfill food orders for the hungry in Bakersfield by 30 percent.

already made significant changes to our flow, as we fill food orders, and in our use of space. It’s been a remarkable transition,” she said. The leaner Gleaners’ warehouse looks significantly different than prior to the project’s inception. Cumbersome shelving units were relocated and redesigned. The product order form and sequence for fulfilling food orders was aligned. Visual aids were installed throughout the facility to help volunteers manage orders and avoid rework. The time and expertise donated to develop the process improvements was topped with a $25,000 Aera donation making implementation possible. The funds bought 80 rolling carts to replace bulky pallets which had to be moved manually with a jack. Food orders are now packaged efficiently with reduced body strain and movement of materials. Warehouse safety and food handling issues also have been improved. As more food is donated, the operational changes have

increased the Gleaners’ capacity to fulfill food orders for the hungry in Bakersfield by 30 percent. The Area-Gleaners partnership is unique in that the commitment goes far beyond a corporate donation to fulfill a single need. The sharing of business expertise and the willingness to commit to a community group for a longterm, hands-on project has transformed the Gleaners operations and way of thinking. Personnel from both Aera and the Gleaners are energized and look forward to continuing improvements for services to the community. “For us, this is just phase one. We plan to look at other aspects of our business and use what Aera has taught us,” Fiorini said. “Our goal is to serve more people in our community and we could never have made these changes without Aera’s generosity and expertise.” Kathy Miller is the communications coordinator for Aera Energy LLC.

R.M. Pyles Boys Camp: ‘Miracle in the Sequoias’ By Stan Moe

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M. Pyles Boys Camp is a haven of hope, adventure and new beginnings for boys with family challenges, tough neighborhoods, poverty and difficulties at school. The camp was founded in 1949, by Robert M. “Bob” Pyles, an independent oil man who believed that all young men should have the opportunity to be challenged by the wealth of experiences that nature has to offer, regardless of their family or economic circumstances. The camp offers everything a young man could want — horseback riding, a ROPES Course, archery, athletics, arts and crafts, a full nature program and a challenging extended out-camp experience in the Golden Trout Wilderness Area. But Pyles Camp offers much more than a good time. It is a place of transformation, where young men learn to make positive choices, set goals for themselves and experience positive peer relationships in a context of positive value and male mentoring. In its 64-year history, Pyles Camp has

developed an effective multi-year character development and prevention program that has been proven to help disadvantaged boys stay in school and out of the criminal justice system. It develops their leadership skills and teaches them to become role models for younger boys, while gaining valuable work skills in the process. A college scholarship program was established in 1977 to encourage the goal of higher education. Scholarships can be used for college or vocational training. To date, scholarships totaling over $900,000 have been dispersed. Equipped with the requisite core values and skills for success, Pyles campers go on to create lives that they can be proud of and that benefit society. Former campers have become caring fathers and leaders in their communities. Many remain friends of the camp for life and help other boys learn what it means to be a good man. For more information about the R. M. Pyles Boys Camp and to get involved, call the office at (661) 294-1394, ext. 1, or cell phone (661) 703-7663. Stan Moe is the executive director of the R. M. Pyles Boys Camp.

Photos courtesy of Pyles Boys Camp

A camper prepares to begin a two-hour ride at the R. M. Pyles Boys Camp. The camp was established with the belief that all young men, regardless of background, should have the opportunity to be challenged by a wealth of experiences.


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Kern Economic Development Corporation

Kern County: Energy giant By Richard D. Chapman

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ern County is the leading energy provider in the state and is connected to the strongest components in the global energy industry. Oil was first discovered in Kern County in the late 1880s when a hand-dug hole produced “black gold.” It has been a boom for major economic growth ever since. Currently, the petroleum industry is one of the top employers in Kern County and contributes about 40 percent of the county’s total output. Significant regional companies include Aera Energy, Berry Petroleum, Chevron, and Occidental of Elk Hills. The industry is a significant source of the region’s employment and provides high-paying, moderate-to-high skill jobs, such as those in technical and engineering (i.e., STEM) occupations. Richard Chapman In 2010, according to the Bureau of Economic Analysis, oil and gas related jobs in Kern County paid an annual average salary of $142,400, while energy support-related jobs paid $71,595 per year. The average salary for Kern County jobs was $44,000. Industry facts:

• Kern County produces about 550,000 barrels of crude oil per day, enough to fuel about 5.5 million automobiles. • If Kern County were a state, it would rank fourth in the U.S. in oil production. • Three of the six largest oil fields in the U.S. are located in Kern County. • Kern County produces more oil in a year than the entire state of Oklahoma.

Photo courtesy of Ed Snowden

The setting sun casts an eerie light and creates a familiar silhouette in a Kern County oil field.

• Kern County produces 57 percent of the natural gas produced in California. Elk Hills is the largest gas producing field in the state. • Kern County is the world capital for steam and thermal oil recovery technology. • The Kern County Oil & Energy Industry employs roughly 20,000 people. • The oil industry provides over one-third of Kern County’s property tax base. According to Economic Modeling Specialists Interna-

tional (EMSI), in 2012, Kern County had roughly nine times the energy sector employment vs. the U.S average. In addition, the local industry grew last year by 2.4 percent. The recent Monterey shale discovery in the southern San Joaquin Valley (potentially bringing Kern County’s recoverable oil to an estimated 15 billion barrels) has further bolstered Kern County’s standing as an energy behemoth. Richard D. Chapman is the president/CEO of Kern Economic Development Corp.


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Bike Bakersfield helps shape Chevron commute By Jason Cater

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n a cool fall morning, Winston Seiler rides his bicycle along the tree-lined Kern River bike path. Vistas of the Temblor Range rise to the west. He finds himself in a relaxing, peaceful state of mind. As he rides past the intersection of Coffee Road and Truxtun Avenue, he notices the two lines of cars waiting at the light, as if in parallel parking aisles. He cannot help but wonder if some of his co-workers are stuck in this traffic; perhaps he will arrive at his Chevron office before they will. Bike Bakersfield has been hired as a consultant to encouragemore of Winston’s coworkers to use alternatives to the single occupancy vehicle trips that clog roads and increase air pollution. Since 2005, Bike Bakersfield has used various methods to advocate for balanced transportation choices in Bakersfield. With this history and expertise, the organization has become a consultant on employee trip reduction programs. In December 2009, the San Joaquin Valley Air Pollution Control District created the Employer Trip Reduction Program (Rule

… the organization has become a consultant on employee trip reduction programs.

The Bakersfield Californian

Winston Seiler of Bakersfield begins his bicycle commute to his Chevron office.

9410). The purpose of this rule is to reduce vehicle miles traveled by private vehicles used by employees to commute to and from worksites – in turn reducing emission and particulate matter. Chevron has five worksites complying with the Air District’s program. For about two

years, Bike Bakersfield has been providing consulting services to Chevron to comply with Rule 9410, and also create a shift in the commute patterns of their employees. With Chevron’s assistance, they have surveyed employee perceptions and concerns about alternative transportation and provided infor-

mation needed to address those issues. Bike Bakersfield offers numerous programs to assist with compliance. Quarterly newsletters: A complying measure for Rule 9410 is a quarterly newsletter. Bike Bakersfield provides pertinent information to encourage people to use various alternative forms of transportation. In addition to bicycling, articles about carpooling, public transit, walking, and combinations of these are included. Site visits: Bike Bakersfield visits worksites to engage employees one-on-one. These visits allow discussion of transportation choices. Lunch time rides: Part of encouraging an active transportation lifestyle is to demonstrate the joy biking can bring. Lunchtime rides eliminate vehicle trips during the lunch hour and give employers points toward compliance. Participants become comfortable with bicycling on the streets around their workplace. Route requests: Personalized route planning from people who bike and use transit frequently is an important part of helping inexperienced bikers. Bike Bakersfield’s knowledge of the most pleasant routes in town points interested people towards safe and efficient bicycling and transit routes. As Winston bicycles home from work, he has the satisfaction of knowing that he is helping meet the community’s air pollution goals. Beyond that, he is having a great time. Jason Cater is the executive director of Bike Bakersfield

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We’ve got oil in our veins!

BROWN ARMSTRONG Certified Public Accountants Whether you’re drilling for oil or providing production or support services, you are provding the energy that drives our nation and the world. You need an accounting firm that understands your local business and its global impact. Brown Armstrong understands. With over 35 years of experience, Brown Armstrong has the experience and insight that makes us an industry leader. Some would say we have oil in our veins. Contact us to learn more and discover why our clients consider Brown Armstrong’s Oil and Energy Services Team their trusted advisors.

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Keeping Kern’s workforce healthy

Kern employers selected for worksite wellness program By Ashley Vorhees

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hirteen Kern County employers have been selected by the federal Centers for Disease Control and Prevention to participate in the National Healthy Worksite Program. Bakersfield companies selected to participate include STEPS Inc., DV Assisted Living, JVD Assisted Living, Work Logic HR, Around the Clock Home Care, San Dimas Medical Group, Klein DeNatale Goldner Cooper Rosenlieb & Kimball LLP, Community Action Partnership of Kern, Housing Authority of Kern County, Bakersfield Heart Hospital and National Health Services. The Spaceship Co. of Mojave and the City of Taft also will participate. Kern County was selected last year by the CDC to participate in the National Healthy Worksite Program, with Viridian Health Management, a leader in worksite health, selected as the implementation contractor. Kern County and seven other communities were selected because of their high rates of chronic diseases and health risk factors, such as smoking and physical inactivity. Also

important in the selection of Kern was the availability of local resources to support a sustainable workplace health program, such as proximity to hospitals and existing community health promotion programs. Preference also was given to counties, such as Kern, that have significant health disparities, and which include both urban and rural communities, and diverse industry sectors and demographics. Supported by the Affordable Care Act’s Prevention and Public Health Fund, the National Healthy Worksite Program focuses primarily on small- and mid-size companies, with the goal of helping employers lower healthcare costs and providing the tools to help Kern County residents live long, more productive lives. All program and implementation support to participating employers will be provided by Viridian over a 12-month period. Together, the Centers for Disease Control and Prevention and Viridian have produced science- and evidencedbased tools, such as the CDC Health Scorecard and Employee Health Risk Assessment, along with other quantifiable surveys, to help employers assess and improve the

assistance they provide workers in making healthy lifestyle choices. In addition to the assessment tools, the program offers in-person and online training that focuses on building and implementing a successful wellness program. In addition to these 13 participating employers, resources also are being made available to many more Kern County employers that were are not selected to formally participate in the program. For this larger group of Kern County employers, health promotion experts will provide some training, tools, networking and mentoring opportunities. At the end of the program, national evaluation will show best practices and develop models of how to successfully implement workplace health programs in small workplaces. For additional information, email avorhees@viridianhealth.com or go to www.cdc.gov/NationalHealthyWorksite. Ashley Vorhees is the Kern County community director for the National Healthy Worksite Program. Dave Anderson with Anderson Interactive Marcom assisted in updating this article.

Paramount serves up healthy meals to its workers By Daniel Garcia

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he Paramount Agricultural Companies are committed to the health and wellness of their Central Valley employees. That includes providing free access to on-site fitness centers, subsidies for nearby gyms, discounted registration fees for local races to promote an active lifestyle, and healthy on-site dining options at many company locations. Paramount Citrus in Delano is home to two of these on-site dining facilities – the “Citrus Grill” at the Paramount Citrus lemon and orange packinghouse and a café at the new Paramount Citrus Wonderful Halos plant next door. In 2011, when Paramount Citrus officials decided to build an on-site dining facility at the company’s lemon and orange packinghouse, they knew they needed to enlist experts to ensure employees received the highest quality food and experience. Through his years of catering of company events, employees had developed a relationship with Ralph Fruguglietti – owner of Frugatti’s in Bakersfield. Fruguglietti was asked to help design the dining facility’s kitchen. He brought in Skip Slayton of Jake’s Tex Mex to help. This led to Fruguglietti being asked to run the Citrus Grill. Fruguglietti worked with Paramount Citrus employees to develop the restaurant’s company-subsidized “fitness menu,” which has since been lauded by the Kern County Health Department and incorporated into the menu at Frugatti’s. Last year, when Paramount Citrus celebrated the grand opening of its new mandarin plant, there was no doubt that another healthy dining option was needed. The café at the Paramount Citrus Wonderful Halos plant, which also is run by Fruguglietti, features a company-subsidized menu of healthy choices. The focus of both menus is “fresh, fast and healthy.” Everything is prepared when ordered and only the highest

Photo courtesy of Roll Global

Employee dining in the Citrus Grill at the Paramount Citrus packinghouse in Delano features a healthy, company-subsidized menu.

quality ingredients are used. Both dining facilities are open 7 a.m. to 3 p.m., Monday through Friday, which has the potential to provide three meals a day to employees, depending on the start of shifts. The company may expand hours to Saturday during the busiest seasons. These on-site dining options not only provide convenient and healthy food choices, but they also are part of the Paramount Agricultural Companies’ commitment to the overall health and well-being of its employees. Other Paramount Agricultural Companies throughout the Central Valley also offer healthy dining and fitness options to employees. Paramount Farms in Lost Hills – where the company processes its Wonderful® Pistachios and Wonderful® Almonds

Share your success story Your company may not be big enough to set up a “healthy food” cafeteria for your workers or hire a medical staff to provide workplace health care. But you may have a “wellness” success story to share. The Kern Business Journal wants to hear about the programs Kern County employers have established to keep their workers healthy and, yes, happy. Email your success story to: kernbusinessjournal@gmail.com Briefly describe your program and how you measure its success. Please include your contact information – your name; your company’s name; telephone number; and email address. Journal staff will contact you to find out more about your program. Wellness success stories will be shared with readers in upcoming issues of the Kern Business Journal. — Kern Business Journal

– is home to the Wonderful Café and Wonderful Fitness Center. POM Wonderful in Del Rey recently unveiled its POM Café

and POM Fitness Center. Daniel Garcia is Paramount Citrus’ director of human resources.


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Cities, counties can stem job losses, despite state policies By Dianne Hardisty

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or a guy who grew up in Tehachapi and cut his Republican political teeth in Kern County campaigns, Jeff Miller’s rise to power in Sacramento was by anyone’s measure “mighty impressive.” Year after year, the young lobbyist finished near the top of a capital newspaper’s list of “Top 100” most influential people in Sacramento. That was until last year, when Miller packed up his wife, kids and dogs, and moved to Austin, Texas. “After this last election in California, (my wife and I) decided enough is enough,” explained Miller, during a recent interview in the Texas capital. “We wanted to move somewhere that we knew our family could have a great quality of life and where the opportunities are endless.” Miller’s decision was a bit more complicated than that. Miller’s wife grew up in Dallas. So, in a sense, it was a bit like going home. And Miller’s political rug had been pulled out from under him. As a partner in Capitol Advocacy, one of Sacramento’s top lobbying firms, Miller’s influence came largely from working with Republican office holders. He had served as the finance director for the state Republican Party, a political advisor to former Gov. Arnold Schwarzenegger and co-finance director of the national Republican Governors Association. The November 2012 election was the straw that broke Miller’s political back. Republican losses in 2010 were bad enough. In fact, they were so bad that Miller quit his volunteer party post, begging California Republican leaders to be more inclusive before their influence in Sacramento disappeared altogether. Last year, that’s basically what happened. Republicans lost so many legislative seats that Democrats now hold super-majorities in the Assembly and Senate. Bills can be rammed through the Legislature without a single Republican vote. So what’s a Republican lobbyist to do? He moves to Texas, where the state’s Republican governor, Rick Perry, is a long-time friend and political ally. Miller worked with Perry at the Republican Governors Association and was the California director of the Texan’s failed 2012 presidential campaign.

Dianne Hardisty/Kern Business Journall

Jeff Miller takes a break in a park bordering the Texas state capitol in Austin.

But Miller hasn’t just set up shop as a lobbyist in Austin. Russo Miller Associates, the lobbying firm Miller established with partner, Sacramento lobbyist Tony Russo,

Council named to counter Defense Department cuts

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he former executive director of the Air Force Flight Test Center at Edwards Air Force Base and a Republican state senator who represents the Antelope Valley are among the 18 people Gov. Jerry Brown appointed this spring to his new Military Council to head off the impact of federal defense spending cuts. “California plays a crucial role in our nation’s defense, and military bases and activities are vital to our state’s economy,” Brown noted, as he announced the council’s creation. “As federal priorities shift to cyber security and new military technology, this council will work to expand defense-industry jobs and investment in California.” California is home to 29 federal installations, including eastern Kern County’s Edwards Air Force Base, NASA’s Dryden Flight Research Center and the Naval Air Weapons Station at China Lake. The Department of

Defense directly employs more than 236,000 people in California. The Governor’s Military Council, which is headed by former Congresswoman and Under Secretary of State Ellen Tauscher, works to protect California’s military installations and operations amid ongoing Defense Department budget cuts, and leverage changes in federal military strategy to position the state to continue innovation and leadership in its military mission. Appointed to the bipartisan council, which is comprised of legislators and former high-ranking military officials, were Thomas R. Bernard, the former executive director of the Air Force Flight Test Center at Edwards, and Republican Steve Knight, who represents the 21st Senate District. The council has convened for one year to draft specific recommendations for the governor and Legislature. The council was not intended to impact the auto-

specializes in luring businesses – especially California businesses – to Texas. Remember the dust-up this spring over Perry’s California radio ad campaign and business recruiting trip to the Golden State? That was the campaign California Gov. Jerry Brown dismissed as “barely a fart.” And did you hear about Perry’s other recent “job poaching” forays into the Blue states of Illinois, Connecticut and New York? You wouldn’t have to dust too hard to find Miller’s fingerprints all over those campaigns. And Miller is optimistic about the results. “By the end of the year, I am confident we, as a firm, will have brought thousands of high-paying jobs to Texas in practically every industry,” he said. “California companies that don’t have their assets nailed to the ground are looking for relief from the state’s escalating costs and regulatory mandates.” Miller uses a personal story to illustrate his point. Russo Miller Associates has offices in Sacramento and Austin. When the company formed at the end of the year, it took Russo three months to process paperwork through the California bureaucracy. Miller filed papers to operate in Texas on a Tuesday and had approval on Thursday. “We are screwing up business in California. We should be helping people do business,” he said. Although frustrated by the hurdles the state is placing in the way of businesses, Miller believes there still is hope for California counties and cities. They have many tools in their economic development box that can be used to grow and attract businesses, despite state policies. His advice: • Streamline permitting procedures. • Develop regulations that make sense, rather than present unnecessary hurdles to businesses that want to continue operating or expand, and others that want to relocate. • Create “incentives,” including tax breaks, to retain and attract businesses. • Help train workers. Often one of the biggest obstacles to a company moving to a new community is the lack of workers with specific job skills. Identify required skills and recruit community and private colleges to train workers. Dianne Hardisty is the Kern Business Journal’s editor.

matic federal spending cuts that went into effect March 1. Rather, the council focuses on influencing future spending decisions, as the Defense Department winds down the war in Afghanistan and turns more attention to the Pacific Rim. Noting the Defense Department contributes billions of dollars in wages and supports California’s construction, manufacturing and R & D sectors, California Sen. Dianne Feinstein said, “It is my hope that the Governor’s Military Council will help protect jobs and investments, and attract new missions associated with California’s military presence.” California’s aerospace industry is expected to be hard hit by Defense Department spending cuts. But the diversity of the state’s economy will provide some cushion. A study by the Pew Center on the States found that California ranked below the national average in various categories of “federal dependence.” For example, 4 percent of the state’s economic output in 2010 came from federal spending on contracts and salaries, compared with the nationwide average of 5.3 percent. The Virginia, Maryland and Washington, D.C., area, where many federal employees live and work, reported a combined 19.7 percent. --Kern Business Journal and wire service reports.


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Saving’s Kern tax dollars

KMC plan improving care, cutting costs By Jacey Cooper

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ealth care for the uninsured in Kern County historically has been fragmented and difficult to access. In 2007, Kern Medical Center established the Kern Medical Center Health Plan, an integrated delivery network to improve health care access and quality for uninsured patients in Kern County, with partial funding from a Medicaid demonstration project. In addition to the services offered by KMC, the plan contracted with National Health Services, Clinica Sierra Vista and Kern County Mental Health to provide primary care, mental health and substance abuse services to participating patients near their homes. The plan has 28 primary care clinics and 14 mental health and substance abuse locations across Kern County providing care to over 7,000 people who would otherwise have no other options for health care coverage. Additionally, it manages several programs to promote appropriate delivery of care. Safety net patients face compounding social, mental and health issues that affect their ability to appropriately manage their diseases and care. The Kern Medical Center Health Plan has a “care navigation” team, comprised

The Bakersfield Californian

Kern Medical Center Health Plan offers services at Kern Medical Center, National Health Services, Clinica Sierra Vista and Kern County Mental Health

of care managers, an emergency department care coordinator and behavioral health coordinator, who focus on care coordination, patient education and appropriate utilization. The care managers aim to decrease avoidable utilization of the emergency department and inpatient services among plan patients who are identified as “frequent users.” Care managers empower patients

to manage their own health by educating patients on such things as their medical conditions and treatment history. Data comparing patient utilization before and after enrollment in the care management program indicate that participants experienced a 56 percent reduction in emergency department visits and a 68 percent reduction in inpatient admissions.

The emergency department care coordinator is stationed at the emergency department during peak hours to educate patients about the importance of primary and preventive care and schedule follow-up appointments, as needed. The behavioral health coordinator assists in coordinating physical and behavioral health services for clients moving between physical health, mental health and substance abuse care systems. Now in its sixth year, Kern Medical Center Health Plan demonstrates a means to improve the quality, coordination and appropriate utilization of health care in Kern County for the uninsured. Overall, average health care expenditures decreased from $5,748 per member in year 1 to $3,484 per member in year 5, a 39 percent decrease in cost per member. Furthermore, the plan was able to reduce administrative costs for the program in 2011 by 24 percent, actually providing more services for less money. Through strategies designed to provide patients with an assigned medical home and optimize coordination of care, Kern Medical Center Health Plan strives to ensure that more people have access to a quality health care system that is comprehensive, efficient, patient-centered, and cost-effective. Jacey Cooper is the executive director of managed care at Kern Medical Center. Go to www.kmchp.com.


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Private insurance billed for county vaccinations By Denise Smith and Timi Granados

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housands of taxpayer dollars have been saved as a result of an innovative billing project developed by the Kern County Public Health Services Department. Utilizing grant funds from the Centers for Disease Control’s Immunization Branch, Kern County has pioneered a program to recoup some of the costs of providing public health clinic services. Launched in January 2010, the project has given the Public Health Services Department a way to maximize revenue collected for services through a billing system. As a result, clinic revenues have increased by more than $400,000 annually. Although still in the early phase of the project, it is hoped that the program will capitalize on its success and significantly increase future revenues, saving Kern County taxpayer dollars. With funds from a planning grant, the department hired a health insurance specialist and certified coder. Her expertise enabled the department to create a billing infrastructure and negotiate contracts with four private insurance companies for “preferred provider” status. A step-by-step instructional manual also was created that now is being used by

health departments across the country. As a result of Kern County’s successes, an implementation grant was awarded through the Centers for Disease Control to take Kern County’s experience “on the road” to train other public health jurisdictions in California, pumping more money into local government budgets and providing a greater level of protection to communities. Probably one of the biggest philosophy shifts, particularly in the vaccine arena, is that public health services are not free. Approximately half of U.S. children are covered by private health insurance, which includes coverage for vaccines.

Prior to this project, government-purchased vaccine was being used on individuals with private insurance, because they came to the department for services and a system did not exist to bill private insurance. A national study done in 2001 revealed 70 percent of local health department clinics across the country did not bill private health plans for the immunization services. As a result of this project, the department is now able to bill many private insurance companies. Additionally, government-purchased vaccine is being utilized by those individuals who have no other way to pay for them. California was one of 14 states selected to receive funds for this innovative project, which has improved government efficiency and saved taxpayer dollars. Coming on the heels of some newly emerging health threats, such as H1N1 and Avian flu, and the ongoing annual threat of influenza, this new billing system has allowed the Kern County Public Health Services Department to better respond to the community’s needs, providing services regardless of a person’s ability to pay or insurance status. Denise Smith is the Kern County Health Department’s disease control director. Timi Granados is the health insurance project coordinator.

Entertaining, meeting, working or just relaxing ...with impeccable style.

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Activity center added to Mill Creek project It has been called the “frosting on the cake” of a linear park and downtown renewal project that stretches north from California Avenue and through the heart of the city. Bakersfield’s Mill House, a 1,001-square-foot, reservation-only activity center with a working, 12-foot by 3-foot metal mill wheel attached, opened to the public in July. The metal mill wheel generates about 2 kilowatts of power at peak production. Located near 17th and S streets, the project was designed by Meyer Civil Engineering. During an open house, Richard Meyer explained the two-story center was designed to be reminiscent of the original flour mill that once stood immediately to the south. Water from the Kern Island Canal flows through the mill’s wheel. Also featured along the canal’s path are Mill Creek Park, the new U.S. Courthouse and various businesses. Inspiration for the decades-long Mill Creek project was obtained from tours by city officials of canal projects in San Antonio, Texas, and Scottsdale, Ariz. Amenities included in the Mill House activity center are a restroom, wet bar, loft, patio and Wi-Fi. For more information about the center and reservations, go to www.bakersfieldparks.us — Kern Business Journal


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House GOP posts regulatory watch list Republicans in the House of Representatives have created a website to alert small business owners and managers when federal regulations are proposed. “Small Biz Reg Watch,” a creation of the G.O.P.-led House Small Business Committee, was unveiled in February with the posting of six new rules, two of which stemmed from the Affordable Care Act and two from the Environmental Protection Agency. The Small Business Administration has reported that complying with regulations is often more expensive for small companies than their larger competitors. The website’s goals are to highlight rule-making initiatives undertaken across the federal government that could affect small businesses and to provide links to information about the proposed rules. Although the business community has welcomed the website’s creation, Leo Bottary, vice president of Vistage International, a business advisory organization, noted, “The question is going to be, how are small-business owners going to find this site?” Bottary has a point. The website’s address is http://smallbusiness.house.gov/ resources/regulatory-watch.htm Until the website’s creators figure out they need to shorten the address – maybe even make it a bit catchy – just do a Google search for “Small Biz Reg Watch” to find it. — Kern Business Journal

The Bakersfield Californian

Tesla’s chief designer Franz Vonholzhausen charges a Tesla Model S during a press conference last year for the opening of the Tesla Motors Supercharging station located at Tejon Ranch Commerce Center off I-5, south of Bakersfield.

Tesla rolling out more ‘supercharger’ stations

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esla Motors Inc. Chief Executive Elon Musk has announced an accelerated rollout of fast supercharger stations across the U.S. and parts of Canada, promising to boost the current eight stations to 25 by midsummer. One of the company’s eight current stations was opened last year in the Tejon Ranch Commerce Center, forming a network along Interstate 5. By the end of the year, Musk said, coast-to-coast travel for the company’s electric car will be possible along Interstate 80. Musk said that 80 percent of the U.S. would have access to the stations by 2014, and that 98 percent of the nation would be covered by 2015. The network of supercharger stations is capable of giving a

two-thirds charge to a Tesla Model S sedan with a 60-kilowatt battery in just 20 minutes. Industry analysts believe Tesla’s announcement will ease the range-anxiety fears of potential buyers and make long road trips practical and convenient for the all-electric car. Tesla reportedly officially turned its first profit for the first quarter of this year, causing the company’s stock to jump 57 percent in May. Other good news for Tesla was Consumer Reports’ glowing review of the Model S and Green Car Reports’ observation that the Model S had outsold Audi, BMW, Lexus and Mercedes-Benz in the first quarter. — Kern Business Journal and wire services

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661-325-EYES (3937)

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APPOINTMENT & INFORMATION HOTLINE: 1-888-560-0047


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Worldwide market requires increased inspections By Ruben J. Arroyo

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ne of the guiding principles of the Kern County Department of Agriculture is to protect and promote agriculture within the county. As part of this mandate, the office conducts inspections and witnesses treatments of agricultural commodities to facilitate export and meet the import requirements of countries throughout the world. The primary document issued in cooperation with the USDA is a phytosanitary certificate, which verifies that the county Agriculture Department has inspected a shipment and found it to be free of pests. Countries are increasingly implementing “work-plans” that require additional inspections that target insects of particular concern to the country. On average, the Kern County department issues 30,000 certificates each year. As worldwide travel and commerce becomes more prevalent, the spread of insects and diseases that affect plants is of greater concern. As a result, the department is experiencing an annual increase in the numbers of workplans. Often, these inspections are conducted jointly with agricultural officials from importing countries. The Australia Grape Pre-Clearance Program is the longest running program of this type. The black widow spider is of particular concern to Australia and for more than 10

years, the country has required not only additional inspections of grapes exported to Australia, but specific fumigation treatments to kill spiders. These inspections require the county’s biologists to be present during fumigation and during a follow-up, combined inspection with Australian inspectors to ensure that the spiders are killed prior to grapes being exported. While Kern County is reimbursed for the time biologists spend on inspections, scheduling treatments and inspections can cause logistical nightmares. As each year passes and more pests of concern are discovered, increased inspection and treatment requirements are imposed. It is of paramount concern that Kern County biologists are available to shippers and growers to perform inspections in a timely manner and that buyers receive produce shipments promptly. Price fluctuations in Kern County’s commodities make timely inspections critical. As markets become more competitive, growers are looking for additional places to sell their products. Many have found exporting to other countries to be particularly lucrative. This can only be seen as a boon to the Kern County agricultural industry, as a whole. Ruben J. Arroyo is Kern County’s agricultural commissioner/sealer.

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Visit bakersfield.com/jobs or call 1.661.322.JOBS.

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Marketing tips

Bakersfield Visitors Guide showcases hotels, events, attractions A new 50-page glossy Bakersfield Visitors Guide, which includes detailed listings of the city’s hotels, events and attractions, as well as “20 Free Things to Do in Bakersfield” and “10 Snapshot Spots,” has been published. The guide also offers tips on exploring Bakersfield’s food, music and arts scene. The guide is available at the bureau’s Visitor Information Center at 515 Truxtun Ave., as well as online at VisitBakersfield.com. It will also be available at local hotels and attractions. — Bakersfield Convention and Visitors Bureau

Consistency important in ‘brand development’ By Marlene B. Heise

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any people believe that a brand begins and ends with a company name and corresponding visual elements. However, a brand is much more. In today’s vastly evolving marketplace, the concept of a brand and how we use it is ever changing. The power of a brand lies in its ability to remain constant across all platforms — from traditional sources, such as print, television and radio, to emerging media, such as websites, smartphones, apps and social media. The consistency of your brand’s message is how consumers will remember who you are and recognize you later. If people can distinguish your name, logo and message from others, they are more likely to connect with you and your business. But, what is a brand? Is it the visual elements? Is it a message? The answer: All of the above. Visual elements have always been important in brand recognition. Today they are more vital than ever. The basic graphic elements of your brand, such as your logo, typeface, colors and graphic style should stay constant and consistent. If your brand is visually recognizable, your company will have more room for creative and distinctive advertisements aimed at your target audience. But a brand is much more than just a logo and colors. Your brand should include a clear description of the product you are selling, the story your product is telling and a call to action to the consumer. Your company’s mission, principles and personality, a message to the consumer and the people who are communicating that message are part your brand, as well.

Creating consistent themes and a voice that can transfer across all platforms will help maintain a cohesive brand message. Consumer trust is maintained when a brand is standardized, because consumers see an identifiable message and visuals making them more familiar with the business, thus creating positive, memorable associations. In today’s cluttered marketplace, branding is Marlene Heise more complex and more important. With so many different platforms, a company’s brand must remain consistent in order to maintain consumer recognition. Because of its ability to share information quickly and easily, social media has become a very important marketing component. If your company has Facebook and Twitter pages, make sure that you are updating the Facebook cover photo, posts, and profile images. They should match the theme and voice with your tweets, photos and background image on Twitter, and other social media sites you are using. No matter where a customer sees your brand, they must recognize it. But having brand consistency across all platforms does not mean that the creativity of your marketing efforts has to be limited. You can be as creative as you want with your brand, just make sure that your message is consistent. You must establish how you want your company to be perceived and keep it consistent throughout all marketing efforts. Marlene B. Heise of Bakersfield is owner of Heise Media Group and Marlene B. Heise Consulting.


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What’s up with App(s)?

Bakersfield No. 5 in ‘strong job growth’ Bakersfield has placed No. 5 on Forbes list of medium-sized cities showing strong job growth. The region has the ongoing oil and gas boom to thank for the strong showing. In the same category, Corpus Christi, Texas, was listed No. 4 and Lafayette, La., No. 6. In the listing for smaller metro areas, other oil-rich cities were noted, including Midland, Texas, which placed No. 1. — Forbes

Jeffrey Bell is a financial advisor for Edward Jones in Bakersfield. “What’s up with App(s)?” is an occasional Kern Business Journal feature that asks Kern County business leaders to identify their favorite App(s) for mobile devices and how they use them.

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wo years ago, my mobile world categorically changed as I upgraded from the standard, throw away device provided gratis after signing a renewed cell phone contract to a brand new iPhone. From that day forward, I have been immersed in that universe of music, commerce, networking and information made possible by the app store. Today, between my iPhone 4S and my iPad 4, I utilize a little over 100 apps to make my work and my life simpler, sweeter and more efficient than ever. As I consider how these devices have impacted my business life, three categories immediately come to mind. First, the Apple Newsstand. As a financial advisor, a significant portion of my work day is spent reading up on the latest developments in the worlds of business and finance, not to mention domestic and global politics. This app provides me instant and worldwide access to such publications as the Wall Street Journal, The New York Times, The Economist and The Financial Times. Updated publications are then pushed to my devices instantly and automatically as they become available, and before they would ever arrive in hardcopy through the mail or on the doorstep! Second, the ability to organize. As with most business men and women, the greatest and most valuable asset I own is time. Anything that helps to simplify and economize my efforts in accomplishing daily tasks leaves me more time to focus on my business or family. Within the iOS 6 operating system, I can organize my apps into groups so I can locate them quickly and efficiently. For example, I have a folder called personal finance, where I store relevant apps from my bank, my mortgage

California economy No. 8 in world California is on target to recapture its No. 8 ranking in the global economy, according the Center for Continuing Study of the California Economy. The state’s economic recovery, which includes strong job growth, and the economic crisis in Europe account for California moving up in the rankings. The center cited the latest data on California’s $2 trillion economy and numbers from the World Bank to conclude that the state should stand alone in the No. 8 position behind the entire United States, China, Japan, Germany, France, United Kingdom (Britain) and Brazil. — Wire services

present

INSIDE THE

STUDIOS

company, my HSA company and my investment firm (Edward Jones, of course!) Here I can quickly check balances, file claims, deposit checks, pay bills and transfer funds. Third, the ability to create individual website icons. Some websites have not created an app to download or their site is more robust than the app itself. In these instances, the Jeffrey Bell iPhone and the iPad each enable me to create icons linking a particular webpage. For instance, my firm has a remote access website which enables me to securely log into my office’s computer and access client contact information, portfolio balances, emails, etc. Because no information is stored on the iPhone or iPad itself, client privacy is greatly preserved. Unfortunately, the web address to access the login page is long and tedious to enter. However with individual icons, I go there once, save the login page to my screen top and then simply click on that icon each time I need to access it. Plus, I can organize these icons into folders, just like my other apps! Ultimately, today’s combination of mobile hardware and software allow me to be more efficient and effective at the office and at home!


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KERN BUSINESS JOURNAL

Put the power of Wells Fargo behind your business

At Wells Fargo Commercial Banking, we focus on building relationships and getting to know your business. Our relationship managers are established in their local business communities, and dedicated to understanding your short-term and long-range goals. To learn more, contact Ben Hanson, SVP/Regional Manager 661-637-2605 ƌ bhanson@wellsfargo.com Jeff Stone, VP/Business Development Officer 661-637-2632 ƌ stonejb@wellsfargo.com

© 2013 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. MC-6336

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Employee benefits also benefit companies The Bakersfield Californian

By Paul Anderson

During holiday weekends, Jawbone Canyon in eastern Kern County can see as many as 30,000 riders.

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Kern County visitor spending breaks record Visitor spending in Kern County reached a record $1.28 billion in 2011, eclipsing the previous record set three years earlier by about $37 million, according to a California Travel and Tourism Commission study done by Dean Runyan Associates. Exceeding the previous year’s total by more than 8 percent, the achievement marks the seventh consecutive year visitors spent more than $1 billion in the county. It makes Kern the 15th biggest tourism county in California, by total dollars spent. Earlier this year, by the Outdoor Industry Association noted that California’s outdoor recreation economy generates $85.4 billion in consumer spending, $27 billion in wages and salaries, $6.7 billion in state and local tax revenue, and creates 732,100 direct jobs. The report found that with $646 billion in annual consumer spending, Americans spend more on outdoor recreation (everything from four-wheeling to bird-watching) than on motor vehicles or pharmaceuticals. The Outdoor Industry Association’s findings are based on national surveys conducted for the association in 2011 and 2012, as well as reports from public agencies, such as the U.S. Fish and Wildlife Service. — Kern Business Journal

Bruce Barnhard 661.444.5196

Belinda Capilla 661.303.8270

Richard Clasen 661.201.6086

or a small business, especially one that is just starting out, employee benefits can look like an unjustified extravagance. Yet small businesses need employee loyalty to succeed — perhaps even more than their larger counterparts. Smaller companies may find it harder to replace skilled staff if workers leave. Offering a package of employee benefits can help retain staff and encourage productivity. Benefits do not need to cost the farm, either; some can be offered for free or at a comparatively low cost. Supplemental Insurance — Offering life insurance, dental plans and disability insurance can make your company stand out to potential hires, as well as help retain current staff. You may find that these are not cost prohibitive. Wellness Programs — Programs to help staff maintain good health are attractive and communicate a sense of investment in people. These programs can help boost loyalty and reduce healthcare costs. Food and Drink — When deadlines are tight, show staff appreciation with free tea and coffee. Consider providing food, as well. Free coffee or sodas can help boost morale and encourage a sense of loyalty. No-Cost Benefits — Flexible working hours, a floating day off, the option to telecommute are a few benefits that may be no-cost or low-cost, yet employees appreciate them. Other benefits to consider — Sam’s Club

David Gay

661.333.3940

Laura Gieger

661.623.3014

Jared Mitchell 661.496.8850

or Costco memberships; gym memberships; adjusted or reduced work schedules on birthdays; staff nights at movies, miniature golf and bowling; exclusive discounts with local vendors; annual clothing allowances; and contests (Super Bowl, Oscars, costume, Paul Anderson cookie baking, etc.) Do not assume that one benefits package will appeal to everyone. Different age groups may have very different concerns. Single employees will have different needs, compared to staff with a family at home. A manager may view benefits differently than a teenager filling an entry level position. Employees with relatives to care for may prioritize flexible working hours, while the “young, free and single” staff member may find a free gym membership, or the opportunity for training more enticing. To ensure the maximum return on an investment in benefits, survey your staff and determine their interests and priorities. Encouraging benefits awareness is important, as staff will feel more invested if they appreciate the benefits that are being provided. The benefit of provided benefits will far exceed their costs. Loyalty and commitment will increase, resulting in better service and improved retention. Paul Anderson is an investment advisor and partner at Moneywise Wealth Management. He is also a host of the Moneywise Guys radio program on KERN 1180 weekdays.

Kevin Palla

661.932.3600

Frank Simon

661.301.1643

Pat Skrable

661.706.7243

661-654-1601

1620 Mill Rock Way Ste. 100 Bakersfield, CA. 93311 DRE Lic. # 00577493

www.PrudentialTobias.com 601-2145 ©2011 Prudential Financial. Prudential Real Estate brokerage services are offered through the independently owned and operated network of broker member franchisees of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. and Prudential are registered service marks of The Prudential Insurance Company of America and are used herein under license. Equal Housing Opportunity.


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KERN BUSINESS JOURNAL

The right choice for good health Your experience...

Choosing your doctor

With some health plans...

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Kaiser Permanente is uniquely structured to give you everything you need–all together in one easy-to-use package. See how having the right partner can make all the difference... With Kaiser Permanente...*

Pick from a list of names, often based on nothing more than if he or she accepts your insurance.

We help walk you through the process of becoming a new member, including choosing a doctor who’s right for you. You can even view all our doctors’ profiles online.

Call. Get placed on hold. Call back. Seeing your doctor starts to seem like trying to win a radio contest.

Schedule or cancel routine appointments with your doctor - by phone, online, or from your mobile device.

Your doctor flips through a file full of papers, asking things you’ve already answered or can’t remember.

Your doctor, backed by a secure, innovative electronic health record system, is up to speed and ready to take care of you.

You drive all over town to take lab tests, get X-rays, or fill prescriptions. You’ve spent half your day in the car.

At all our Kern County locations, your doctor, lab services, X-rays, and pharmacy are under the same roof, so you can save time and do more in one visit.

Show up with your fingers crossed that your primary care doctor faxed or mailed your records.

When you arrive, your specialist will have your health information right at his or her fingertips, making your care virtually seamless.

Remembering your doctor’s instructions

Take lots of notes during your visit, listen carefully and trust your memory later.

You get a printed summary report at the end of each visit. You can also view details of your visits online whenever you want, including most test results.

Asking routine questions without a visit

Call your doctor’s office. Leave a message. Hope you don’t miss the return phone call.

Email your doctor’s office, and get a reply normally within 48 hours.

Making an appointment

During your visit

Getting other services

Visiting a specialist

Along with getting excellent care, as a Kaiser Permanente member, you have access to lots of preventive health resources like classes, wellness coaching, and more. (Some classes may require a fee.) To learn all about the many benefits of membership, visit kp.org/thrive or call 661-334-2005. *These features are available when you receive care at Kaiser Permanente facilities.


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Congratulations to San Joaquin Community Hospital’s Accredited Chest Pain Center and Nationally Certified Stroke Center! Chest Pain Center The Accredited Chest Pain Center at San Joaquin Community Hospital (SJCH) has received the ACTION Registry – GWTG Silver Performance Achievement Award. This National Cardiovascular Data Registry award recognizes participating hospitals that have maintained a rate of 90% or better for four consecutive quarters. Stroke Center As a recipient of the American Heart Association/American Stroke Association’s Get With The Guidelines®-Stroke Gold Plus Quality Achievement Award SJCH’s commitment and success is recognized, in implementing excellent care for stroke patients, improving patient care and outcomes. On average someone suffers a stroke every 40 seconds. The goal of participating in Get With The Guidelines is to save lives.

If you or a family member suffer a heart attack or stroke, call 911. Tell them to take you to San Joaquin Community Hospital’s Nationally Accredited Chest Pain Center and Certified Stroke Center.

To discover more about your risk for heart attack or stroke, scan here: (Heart Attack) (Stroke)

661-395-3000 www.sjch.us


Kern Business Journal August 2013