Biden’s energy plans set to rejig job market

Cathy Bussewitz, Associated Press

Good-paying jobs — many of them. That’s the seductive idea around which President Joe Biden is proposing a vast transformation of the energy sector, with the promise of making it far more energy-efficient and environmentally friendly. As Biden portrays it, his plan to invest in infrastructure — and accelerate a shift to renewable energy and electric vehicles, to more efficient homes and upgrades to the power grid — would produce jobs at least as good as the ones that might be lost in the process.

His plans call for 100% renewable energy in the power sector by 2035. To people who have devoted careers to the fossil fuel industries, those plans may look more like a dire threat. To the president, though, out-of-work oil workers could be shifted to other jobs — plugging uncapped oil wells, for example — and thousands more positions would be created to help string power lines and build electric vehicles and their components.

“We think that’s a lot of jobs to fill, and one of the key questions is: How do we build the right skill base that can help fill those jobs?” said Matt Sigelman, CEO of Burning Glass Technologies, a labour market analytics firm.

The outlook for the energy industry’s coming decades, as Biden’s plan would have it, includes good wages and good benefits, reinforced by a revival of labour unions.

“I’m a union guy,” he said at a union training center in Pittsburgh. “I support unions, unions built the middle class, and it’s about time they started to get a piece of the action.”

A speedier transition from fossil fuels to renewable energy would hardly be as simple as longtime wildcatters transforming themselves into solar installers. So many unknowns overhang the shift toward greener energy that no one knows how the industries and its jobs will evolve in the coming years.

For one thing, many experts say the transition to electric vehicles will likely mean fewer factory workers than are now employed in producing internal combustion engines and complex transmissions. EVs have 30% to 40% fewer moving parts than vehicles that run on petroleum.

Yet economists have warned that climate change poses such a grave threat that the United States must accelerate its transition to renewable energy to ensure its economic security.

Even with favourable policies, it can take generations to create jobs in individual industries. During his presidency, for example, Barack Obama encouraged tax incentives for the development of solar and wind energy. That effort did achieve some progress. Yet solar and wind remain to this day small sectors of the overall energy industry.

“If you’re thinking about incentives and disincentives, it’s easy to kill something; it’s hard to create something,” said Rob Sentz, chief innovation officer at Emsi, a data analytics firm.

The renewable energy industry employed about 410,000 people in 2019, including those in the solar, wind, geothermal, hydroelectric, biomass and biofuels industries, according to Burning Glass. By comparison, employment for oil and gas alone in 2020 was 516,000 counting extraction, pipelines, refining and other elements of the industry. An additional 485,000 people were working at gas stations, though gas station jobs are technically classified as retail, according to Burning Glass.

“It’s a pipe dream to imagine that we’re going to achieve full decarbonization in a short period of time,” Sigelman said. “Jobs in the carbon economy will continue in great numbers for some time to come.”

That said, Sigelman estimates that the renewable energy industry could grow up to 22% over the next five years to a total of 465,000 jobs.

What about pay? It depends on the type of job — and whom you ask. Many in the oil and gas industry say they fear that their wages would shrink if they transitioned to a job in renewable energy. But many economists say incomes might be comparable, whether a worker is labouring in an oil field or a wind farm.

The median annual pay of solar installers was about $44,650 in 2020, according to Emsi. For wind turbine service technicians it was about $52,100.

In the oil industry, derrick operators, rotary drill operators, service unit operators and excavating and loading machine operators earned median annual pay ranging from $44,700 to $55,000, Emsi says. The median for roustabouts and extraction work helpers was $37,000 to $39,000.

Oil and gas field service technicians earn a median of about $39,000 a year, Sigelman said. Those workers could, in theory, transition into such areas as electrical technician work, which pays roughly $25,000 more a year, or construction foreman jobs, whose median is about $27,000 more per year.

One point often missed in any debate over green energy vs. fossil fuel jobs is that the line between the two can blur. To install wind turbines, for example, you need truckers, electricians and mechanics.

“It’s the same people doing the work,” Sentz said. “You call it green, but it’s still a trucker.”

Likewise, jobs involved in installing or repairing power and transmission lines are critical to both the renewable energy and fossil fuel industries. The renewables growth that Biden envisions will need a massive buildout of transmission and power lines to deliver electricity from the solar farms and wind farms on sunny plains to energy-gulping coasts. Whether for fossil fuel or renewable projects, electrical workers who string the lines are already in demand.

The number of advertisements for job postings in the electric power distribution industry grew 35% in the past two years, Emsi says, and the number for jobs in power and communication line construction rose 63%.

“They’re having a hard time finding the people they need for the jobs they’re doing,” Sentz said.

Power line installers, in demand everywhere, earn around $72,000 a year, higher than some others in the energy sector, according to Emsi.

“Every county in the country needs them,” Sentz said. An electrician who spent 20 years working on transmission lines for coal-fired power plants will be in high-demand when building infrastructure for renewable energy projects, and those tend to be union jobs, said Bob Keefe, executive director of E2, a nonpartisan group that advocates for policies that serve the economy and the environment.

“Stringing power lines is stringing power lines,” Keefe said. “We’re just doing it better and more efficiently and hooking them up to the right places that need it to move some of the renewable energy that we’re producing now where it needs to be.”

Are old jobs disappearing faster than new ones are appearing?  It’s hard to say. The oil, gas and chemical industries lost 107,000 jobs from March to August last year, according to a Deloitte study. That occurred after the pandemic crushed demand for jet fuel and gasoline as tens of millions of people stayed home.

Coal mining jobs have been declining for years, from a high of 92,000 workers in 2011 to 52,804 in 2019, according to the Energy Information Administration.

Biden wants to spend $16 billion to put hundreds of thousands of those people back to work capping unplugged oil wells and mines. Any such spending, though, would need congressional approval, so the number of jobs that might be created remains unclear.