March 7, 2021
Texas, U.S.

In bid to shift oil workers to clean energy, Biden faces pay gap

Even in downturn, clean energy may struggle to pull oil workers | James Osborne, Staff writer | Houston Chronicle | March 7, 2021 | www.houstonchronicle.com

WASHINGTON – Texans have found their way to oil and gas fields and refineries for generations, heading to places such as Midland and Beaumont, where, with little more than a capacity for strenuous and dirty work, they could earn incomes that offered entry into the middle class.

But as governments shift from fossil fuels to solar panels and wind turbines, hoping to hold off the worst effects of climate change, that way of life is expected to wind down in the decades ahead. President Joe Biden envisions the nation’s oil workers and coal miners finding new jobs in a clean energy economy, building solar farms and manufacturing batteries, and applying their experience to harness other forms of energy.

It’s a tall order, requiring not only hundreds of thousands of workers to start new careers but also a massive expansion of the nation’s clean energy industries. Most of the world’s renewable energy technologies, from lithium ion batteries to wind turbines, are produced in China and other East Asian nations, which offer low labor costs.

In addition, clean energy jobs in the United States, such as working on wind turbines or installing solar panels, don’t pay nearly as well as those in the oil and gas industry, where even workers in the lower ranks can earn six-figure salaries.

“Someone working in a refinery leaving to go install solar panels, they’re probably going to take a 75 percent cut in pay,” said Rick Levy, president of the Texas AFL-CIO, the state’s largest labor union. “What do we do for the folks that have been powering this country for the last 100 years? How do we shape this new economy so jobs can be sustaining in the same way jobs in the fossil fuel industry have been?”

It’s a conundrum plaguing communities from Appalachian coal country to Wyoming’s natural gas fields, and perhaps nowhere more than Houston, which has long reigned as the “energy capital of the world.”

Oil and gas made Houston’s economy hum, and now civic leaders are starting to ask whether they can take the capital and knowledge built over a century of drilling and refining and use it to create well-paying jobs in new industries such as advanced battery manufacturing and offshore wind farms.

Unlike oil, however, clean energy technology can be produced anywhere, regardless of the rocks, minerals and geological formations that lie beneath the surface.

China and other East Asian nations have steadily come to dominate global manufacturing, developing supply chains and amassing an expertise in producing the equipment that enables clean energy. More than 70 percent of the world’s solar panels are made in China, according to the research and consulting firm IHS Markit.

China now is looking to dominate the market for advanced batteries that will power the coming wave of electric vehicles.

Biden has pledged to build a domestic battery and electric car industry in the United States, promising to “lead the world in inventing, manufacturing and exporting clean energy technologies” by pumping hundreds of billions of subsidies into those industries – taking a page from China’s playbook.

It is a sharp pivot from the free trade gospel that Democrats and Republicans have touted for decades, as American companies developed cutting-edge technology here and then used cheap overseas labor to manufacture products such as iPhones and computers.

While that model has benefited those with college degrees, blue-collar workers have largely been left behind. Getting manufacturing jobs back in the United States will be a challenge, given the higher wages and stricter environmental regulations in the United States compared with East Asia.

Analysts also are skeptical that the United States can compete with China, which has spent the last three decades developing the most intricate and efficient supply chains the world has ever seen.

“There are certain industries the U.S. is much more competitive, like the designing of microchips, semiconductors and engineering,” said Huei Peng, director of the University of Michigan’s Mcity facility, which is testing autonomous vehicles on the road. “If you force battery plants in the U.S., there’s a lot of things to worry about. You’re better off picking the areas where you’re strong.”

But there are some positive signs the United States is making gains. The Tesla Gigafactory outside Austin, which will produce electric pickups and semitrucks, is expected to employ 5,000 workers once it opens later this year. And Texas’ relatively young wind energy industry sector, which has more capacity to produce electricity than the next three states combined, now supports approximately 25,000 jobs.

“These are industries that are steadily growing and gaining market share. And the thing I’m hearing is people can’t get hired fast enough,” said Susan Sloan, vice president of state affairs at the American Clean Power Association, a trade group. “We should be glad we’re in a spot where we’re blessed with so much wind and solar and have been able to build this state with fossil fuel investments.”

For now, clean energy jobs lag far behind those in the oil sector – almost 200,000 Texans work in drilling alone, not counting refineries and pipelines. But the expectation is the clean energy industry will grow for decades to come, as more wind turbines and solar farms are built atop Texas’ wide open spaces.

That would mean plenty of construction jobs for the foreseeable future. But the quality of permanent jobs that will be created worry labor leaders such as Levy.

A technician installing rooftop solar panels starts out at $30,000 a year, following a yearlong training program, said Hugh Whitted, an instructor in the solar program at Texas State Technical College in Waco. After a few years, when they move up to journeyman, installers can earn $50,000 to $60,000.

Not bad money, but it’s a long way from the six-figure incomes oil and gas workers driving trucks or manning a rig can earn starting out.

“We need to take off the rose-colored glasses and figure out how people are going to make a living,” Levy said. “A transition sounds like a fancy name for a funeral.”
Renewal

After years of political debate around climate change, efforts to shift the nation and workers from fossil fuel sectors are only just beginning in earnest

Rice University is working with oil companies such as Chevron and Exxon Mobil to attract clean energy startups and remake Houston as the nation’s clean energy hub, much as Pittsburgh recast itself as a center of advanced manufacturing, technology and health care after the demise of its steel industry, said Allison Thacker, president of the Rice Management System, which manages the university’s endowment.

“We’ve seen cities around the country doing this: Chicago, Detroit, Atlanta. All of these places have university-led initiatives to cultivate an ecosystem of entrepreneurial ventures,” she said. “Data shows entrepreneurs create new jobs, even if they don’t have the most jobs.”

In Washington, Biden’s team is looking to provide a lifeline to fossil fuel workers, who, in the words of Energy Secretary Jennifer Granholm, lose jobs through no fault of their own.

A paper from the University of California circulating around the Department of Energy is proposing that government can help ensure the creation of well-compensated clean energy jobs through strategies such as working with unions and community colleges to create training programs and writing compensation guidelines into law.

Similar strategies have been discussed for years for coal workers, who have steadily lost jobs as production began falling around 2000. But Democrats and Republicans have failed to come together with a response as coal states have fallen behind.

Between 2005 and 2020, the U.S. economy grew 26 percent, according to the Commerce Department. The Texas and California economies grew 51 percent and 40 percent, respectively.

Over that period, the economy of Wyoming, the country’s largest coal-producing state, grew by less than 10 percent.