Oil Revenue Decline Could Impact Essential Services In Long Beach

LONG BEACH, CA — With the anticipated transition away from crude oil and natural gas production in California, Long Beach officials are projecting the city will have a decline in oil revenue up to $301 million by 2035.

City Auditor Laura Doud released the Review of Economic Impacts to the City this week and forecasted a 54 percent decrease in oil revenue by 2035 due to the natural production decline. In 2023, the total oil revenue generated $56.5 million for the city, Doud said.

In November, voters will decide whether to pass Senate Bill 1137, which would ban new oil production wells or retrofits within 3,200 feet of homes, schools and hospitals. If the bill passes, Doud said Long Beach's cumulative oil revenue would decrease by $301 million over the years from 2024 through 2035.

"Oil revenue has a long history in funding services and projects that safeguard the environment, improve infrastructure, enhance beaches, and keep residents safe,” said Long Beach City Auditor Laura Doud. “With the anticipated decline in oil production and oil revenue, the City needs to develop and execute alternative strategies to bridge the revenue shortfall for capital projects, public safety operations, and all other essential City services that residents rely upon.”

According to the review, the decrease in oil production and oil revenue will significantly impact funding for essential city services and projects. In 2023, oil revenue funded infrastructure improvements and vital services in the Tidelands area, General Fund expenses and community development.

The complete report is available on the City Auditor's website.