Don’t kill clean jobs amid Big Oil layoffs
The Biden administration rolled out a “whole of government” response to climate change last week including, among other things, federal procurement of carbon pollution-free electricity and clean, zero emissions vehicles. Biden’s climate message came amid reports of ExxonMobil’s first annual loss since 1999 and its worst financial year ever. The response from opponents was as expected — that President Joe Biden’s plan will be a job killer.
Mike Sommers, the president of the American Petroleum Institute, the oil industry’s main lobbyist, opposes the plan claiming that it’s a case of “American jobs or outsourced jobs. Economic revival or small-town decline.” It’s an old argument and one increasingly divorced from reality. But more importantly, throwing up obstacles to Biden’s Clean Jobs Agenda will likely hurt the very workers that API claims to support.
We now have considerable evidence that the effects of environmental policy on overall U.S. employment are modest, especially in the long run. Over time (and sometimes quickly, depending on the right policies), there is a reallocation of workers across multiple industries — think offshore oil rig welders and engineers shifting to deep water wind, or energy data scientists to health care industries. Economic research shows that to be true for the United States, as well as for the 15 European countries that implemented a carbon tax as far back as the early 1990s.
This is what the Washington lobbyists are missing. Even if the Biden administration did nothing, those sectors would continue to hemorrhage jobs. The sad truth is that during years that the Trump administration removed the oil industry’s so-called burdensome yoke of environmental regulations, Labor Department statistics show the U.S. drilling industry lost 20 percent of its jobs from the near term peak in the first half of 2018 when oil prices were strong.
Europe has initiated a $1.1 trillion initiative for low carbon technologies. Last week, the European Union paved the way for Tesla and BMW, among other companies, to get $3.5 billion in state assistance for battery projects aimed to keep green jobs on that continent. It also plans to unveil a carbon border tax on key imported products, such as methane-leaking U.S. oil and gas. China has made zero emission automobiles, batteries and charging stations a national priority as well, with over $17 billion already spent in the country’s 12th-year plan on the sector.
These kinds of foreign initiatives mean oil jobs won’t be coming back. Several major economies, including the U.K., France and China, already plan to outright ban the sale of new gasoline cars. No matter how many clean technology jobs are killed in the United States by retrograde politicians, it won’t change the trajectory. Even GM announced last week it would abandon the internal combustion engine by 2035.
The industry’s opposition to Biden’s clean energy plan could be a dismal repeat of past decades when U.S. politicians dithered on whether to renew subsidies for wind installations, and Spain grabbed up wind manufacturing jobs by having a focused national effort. We cannot let the oil industry’s lobbyists convince us to kill new American clean technology jobs at the same time the oil companies are laying off their own workers. That would give the U.S. economy a double whammy. Put simply, we would still lose our oil and gas jobs, but workers from other countries would gain the new clean energy jobs that could replace lost jobs in U.S. oil and gas.
The stakes for Houston and for Texas couldn’t be higher. The Greater Houston Partnership has made clean energy part of its new initiative for creating jobs and vitality in Houston. Instead of lapsing to old ways of thinking, our leaders need to face these facts that are motivating the GHP. It’s not possible to hold back the tide of global trends away from oil toward clean energy. Trying to do so inside the United States is self-defeating.
The Biden administration understands that any stimulus must consider equity issues as it moves forward to rebuild the U.S. economy. Past energy stimulus dollars favored states with shovel ready programs and local green banks that could absorb the funds most quickly. This time around, the stimulus must find better ways to reach hard hit regions. Federal dollars can support local infrastructure, including research and development hubs for companies and entrepreneurs willing to consider new venues in states heavily dependent on fossil fuel production for employment.
The API and other fossil fuel industry groups — as well as those politicians from fossil fuel dependent states — would do well to rethink efforts to block green jobs initiatives, like a national EV charging network that would drive related investment in charging equipment manufacturing, battery plants, power engineering analytics and a host of other products that are needed to support a national EV charging network. Rather than continue to oppose the inevitable, they should ride the wave of green innovation that will be the hallmark of the 21st century. Even ExxonMobil could agree with that given its announcement that it will invest $3 billion in green innovation via new carbon capture and sequestration projects.
Metcalf is the John DiBiaggio Professor of Economics at Tufts University. He was the deputy assistant secretary for Environment and Energy at the U.S. Department of the Treasury in 2011 and 2012. Jaffe is a research professor at Tufts University’s Fletcher School and managing director of the school’s Climate Policy Lab. She recently served on the advisory panel for The Center for Houston’s Future special report to Texas 2036.