Financial support for displaced California oil workers poised to expire
A pair of pilot programs meant to financially support and retrain thousands of oil industry workers at risk of losing their jobs due to the state’s climate policies are headed for termination, a year after their launch.
The move comes as those representing the oil industry’s workforce are advocating for the opposite — more public aid as California aggressively pursues its clean energy future. They say a growing number of the Californians who helped build the state’s oil and gas energy systems face an uncertain fate.
“That’s a slap in the face is what that is,” said Tyson Bagley, a secondgeneration oil worker, said about the state’s support up to this point. “If they want to do this transition the right way, they need our workers, our voices at the table.”
California is embarking on a complex evolution away from fossil fuels and harmful greenhouse gas emissions and toward electric-powered vehicles and appliances. Workers who help pull more than 150,000 barrels of crude oil from the ground each day in California, those who operate underground mining machinery, oversee drilling operations in the Central Valley and work in refineries fear becoming an afterthought.
To navigate the impending job losses, advocates and policy researchers call for more state investment to train and prepare the oil and gas workforce for jobs in other sectors. That includes financial assistance to those who may not be able to secure a comparable income, a policy referred to as a “just transition.”
California’s 2022-23 budget established a
$40 million workforce displacement fund and a $20 million pilot program for training displaced oil and gas workers in Kern and Los Angeles counties to help cap abandoned wells.
However, Newsom’s budget proposal for the fiscal year that begins
July 1 does not provide any new funding for the programs, meaning that they will expire when the money dries up. The state is in the process of releasing $6 million for the capping training program but the rest has not yet been allocated.
Daniel Villasenor, a spokesperson for the governor, said the program could be replicated in the future, if proven successful, but the administration wants to “make sure the money is being used effectively.”
Villasenor also touted more than $1 billion in recent investments into other programs that he said would help “support communities as the state transitions to a cleaner, greener economy.”
More than $500 million went toward the state’s new Community Economic Resilience Fund, which provides investments for projects that align with the state climate goals. Another $300 million went toward a grant program for local governments facing high unemployment and poverty to invest in new sustainable projects and jobs.
“We’re leading the way on how to achieve net-zero pollution while equitably supporting workers in every sector of the economy, especially workers on the front lines of California’s clean energy transition,” Villasenor wrote in the statement.
Bagley started his career in Central Valley oil fields nearly 12 years ago. He’s saved up money to buy a home and support his wife and two children on his sole income.
When industries across the nation shut down and employees were sent home during the COVID-19 pandemic, Bagley and his colleagues were deemed part of the state’s “critical workforce.” They continued to report to work each day despite a statewide order for the majority of Californians to stay at home.
Although Bagley, a union health and safety representative at the Phillips 66 Rodeo Refinery, supports and understands the state’s evolution toward clean energy, he takes issue with the way policymakers are approaching it.
“I’m definitely not a climate change denier, but I’m in the business of protecting good jobs,” he said.
The Phillips 66 refinery in Rodeo is transforming from a facility that processes oil into one that converts feedstocks into renewable diesel. While Bagley has been assured that he and the members he represents will keep their job after the conversion, that will not be the case for every California oil worker.
A report released last month by the Gender Equity Policy Institute, a Los Angeles think tank, found that two out of three oil and gas workers in the state will likely be able to move into new jobs without any retraining. Supporting those who struggle to find work with comparable pay by offering them income subsidies and relocation support would cost the state up to $68.9 million annually, the report estimated.
That was far below other projections. A 2021 study from the Department of Economics and Political Economy Research Institute at the University of Massachusetts-amherst estimated that assistance programs for California’s fossil fuel workers would cost the state up to $830 million per year.
One area where some displaced oil industry workers may find jobs is in the capping of abandoned wells.
California’s crude oil production has dropped steadily over the past three decades, leaving more than 37,000 idle wells across the state. Left unattended, they could contaminate waterways and soil and pollute the air.
As more wells cease production because of the state’s declining dependency on fossil fuels, operators will need more workers to cap them and decommission associated facilities.
Last year the Department of Conservation was allocated $200 million over two years to conduct that work and another $20 million to train displaced oil workers.
Erin Hickey, a spokesperson for the California Labor & Workforce Development Agency, said the state wants to be the “leader in both well remediation activity and workforce training to provide these workers with a way to transition into quality jobs.”
Although there won’t be enough jobs to help all of the displaced oil workers, Tim Rainey, executive director of the Workforce Investment Board, said it was a good start at creating “new pathways” for those affected by push toward clean energy.