The pandemic has resulted in thousands of lost jobs in the energy sector, hitting coal, oil and gas, as well as renewable energy.
The pandemic also offered something of a preview of bigger structural changes underway. While the collapse of oil demand unfolded over the course of several weeks, the impact is illustrative of what a slower-motion collapse in demand for fossil fuels might portend. Fortunately, the transition to clean energy will employ millions, and many jobs can be created in traditional fossil fuel hubs.
Fossil fuel and renewables hubs
An estimated 1.7 million people worked in fossil fuel industries – a comprehensive category that includes oil and gas drilling, mining, pipelines, utility construction, and other related manufacturing. However, they are geographically concentrated in specific hubs, such as Houston, West Texas, North Dakota, Wyoming and Pennsylvania. Even as these areas have lost jobs over the past year due to the market downturn, “no community rich in fossil fuel jobs would willingly want to give up even more without a clear alternative,” the Brookings Institution wrote in a new report.
However, many fossil fuel hubs are “ideal sites for renewable energy production,” the report found. Roughly a quarter of the counties in the U.S. with the greatest potential for wind and solar are also currently major centers for fossil fuel production.
First, the natural resources are there – powerful winds across the Plains states from West Texas all the way up to the Canadian border, and abundant sunshine across most of the U.S. West and the Southeast.
However, this is not just a story about resource potential. Using data from the University of Texas at Austin, Brookings overlaid those resources with the economic competitiveness of wind and solar energy. They found that in terms of competitiveness, the same fossil fuel hubs are also highly competitive for wind and solar. For example, all but one of Wyoming’s 23 counties are competitive in either wind or solar, and seven are competitive in both.
New Mexico, home to a major oil and gas presence, is also home to five of the top ten most competitive solar counties. West Texas and the Great Plains, also with huge extractive industries, are competitive in both wind and solar. In total, a quarter of the best wind and solar counties are also fossil fuel hubs, the Brookings report found.
According to Brookings, of the 155 Congressional districts with the most renewables potential, 91 are represented by Republicans.
Moreover, many are Republican-leaning districts. According to Brookings, of the 155 Congressional districts with the most renewables potential, 91 are represented by Republicans. Many also have Republican Senators, such as in Louisiana, Texas, Oklahoma, Wyoming and Utah.
There are some obvious but significant takeaways from this data. Republican-led and fossil fuel-dependent districts have often opposed action to accelerate the clean energy transition. While at times the opposition is cynical, some of the objection is legitimate – in the aggregate, there is plenty of data to suggest the economic opportunity of transition is enormous, but a lost job in one locality made up by a job created elsewhere is of little comfort to those who lose out.
Helping smooth and speed up the transition
However, the Brookings data suggests that need not be the case. The “clean energy transition offers a grand opportunity to retrain local workers and repurpose the industrial infrastructure in these communities. If the country needs to make targeted, big bets on renewable energy investments, why not prioritize the communities that already have workers with complementary skills and experience in the traditional energy industry?” Brookings concludes. There are plenty of caveats – job skills are not entirely transferable, investments in various energy segments won’t neatly offset each other, and the jobs created and lost won’t be perfectly like-for-like. Still, it is important to note that the transition is already unfolding, only it is occurring largely in a chaotic and unplanned fashion.
Offshore wind offers one small example. Global offshore wind employment could triple by the end of the decade to 868,000 full-time jobs, up from 297,000 jobs in 2020, according to Rystad Energy. Those jobs will not necessarily be backloaded – Rystad estimates that offshore wind could employ 589,000 people by 2025. These jobs run the gamut from manufacturing, construction, installation, to operation and maintenance of offshore wind farms.
Workers in oil and gas who lost their jobs have transferable skills to clean energy.
Workers in oil and gas who lost their jobs have transferable skills to clean energy. “Oil and gas workers…share some skills sets and essential offshore knowledge. Offshore wind areas such as foundation manufacturing, offshore construction, project development, and O&M have been highly relevant to oil and gas operations,“ Alexander Fløtre, Rystad Energy’s Product Manager for Offshore Wind, said in a statement.
Europe is expected to lead, as it already has a head start in offshore wind, with the U.S. lagging behind. But the U.S. could put 15 gigawatts of offshore wind onto the grid over the next decade, up from nearly nothing today. But if the U.S. Congress passes ambitious clean energy legislation, employment in offshore wind could balloon. Newly created offshore wind jobs along the Gulf Coast could help cushion the blow for lost drilling jobs, although for now, the Northeast is a few steps ahead.
While pushing a sweeping piece of energy legislation through Congress may seem like an insurmountable task, there are some signs of movement. The House Energy & Commerce Committee just released the CLEAN Future Act, which, among other things, would require a clean electricity standard of 100 percent clean electricity by 2035.
“The inclusion of a federal high-penetration clean energy standard represents one of the most direct and reliable ways to ensure critical emissions reductions in the power sector,” the American Council on Renewable Energy (ACORE) said in a statement.
It would also amount to a major shift in employment from coal, oil and gas to renewable energy. Government policy could accelerate the shift, and also ensure the transition is “just.” There are many principles encompassed in a “just transition,” a popular buzzword these days, but ensuring that fossil fuel communities are not left behind is one of them.