daniel raimi is a fellow at Resources for the Future, an independent nonprofit environmental research institution in Washington.
Published October 11, 2021
The energy system of the United States is at an inflection point. Yes, you’ve probably read those words before — if you’re old enough, as far back as the Arab Oil Embargo, which Richard Nixon proposed to counter with the construction of 1,000 nuclear power plants. (A total of 90 are now in operation.) But this time around, the energy shock is already upon us, and the outlines of a rational response are well known.
Over the past two decades, the sorts of energy we use and where we get it have under-gone rapid, dislocating changes: a historic surge in oil and gas production from unexpected corners, the humbling of Big Coal despite a political full-court press to save it; an unexpected acceleration in wind and solar power, along with the electric vehicles that many hope will be powered by those renew-able sources. But, of course, it’s the monster on the horizon — climate change — that re-quires much more than the free market to as-sure an adequate and timely response.
A transition to a “net zero” energy system that on balance adds no greenhouse gases to the atmosphere will, if sufficiently rapid, prevent the most dire consequences of climate change. Moreover, the transition promises a multitude of ancillary benefits ranging from a reduction in local air pollutants that would save thousands of lives per year to a chance to remediate environmental injustices that have disproportionately harmed people of color.
But this transition will also entail costs, and unlike many of the benefits, these costs will not be distributed evenly. Indeed, the radical shift in our energy system will, if not managed well, dislocate rural communities that are disproportionately dependent on fossil fuel production and pile fresh challenges on tens of thousands of Americans who may lack the mobility or skills to roll with the punches.
Unanticipated economic dislocations in America’s past — trauma ranging from the prairie Dust Bowl in the 1930s to the collapse of heavy industry in the Rust Belt in the 1980s to the export drain of good blue-collar jobs since the 1990s — offer limited precedent, and even less guidance in terms of policies that have successfully managed the localized impacts of transitions. But there is some basis for optimism.
For one thing, there’s greater political awareness that failure to protect the vulnerable could stand in the way of the drastic measures needed to prevent everything from desertification of the Southwest to floods undermining coastal habitation in the East. For another, there’s a growing body of research confirming that much could be done to ease the burden of transition without slowing the effort to curb greenhouse gas emissions.
No Silver Bullets
Pollyanna's have heralded the rise of new energy technologies as the savior of the fossil energy work force — so that coal miners, gas frackers and oil refiners will seamlessly be transformed into solar panel installers, wind turbine technicians and battery manufacturers. If only it were so simple.
Although the deployment of these clean energy technologies will certainly create hundreds of thousands of jobs, the skills required — and the wages paid — in these rising sectors differ considerably from those in today’s fossil energy work force. What’s more, many of the jobs building and deploying new energy technologies won’t be centered in the coal-, oil- and gas-producing regions that are at greatest risk.
Assuming that the energy work force of the past will become the energy work force of the future is thus a fantasy. A better approach is to deploy a suite of policies that can support locally driven job- and income-creating initiatives that capitalize on the strengths that each at-risk community possesses. The drivers of future economic growth will look different in oil-rich West Texas than in Wyoming coal country or the petrochemical-dense Gulf Coast.
In some cases, fossil fuel energy communities may be able to become clean energy leaders by scaling up emerging technologies like wind energy manufacturing, geothermal, carbon capture and hydrogen. But the match will rarely be so neat, and policymakers will need to think far outside the energy box.
Enabling Local Solutions
So how will the federal government identify which industries and places to support? Simple: it can’t — and shouldn’t try.
It’s unlikely that technocrats in Washington, no matter how knowledgeable or well intentioned, can make the right decisions at the other end of a Zoom call. Instead, federal efforts need to be directed to empowering local and regional experts, identifying the most promising routes for future prosperity — whether that’s tourism, information processing or carbon capture.
First, affected communities need to be proactive in planning to identify options rather than putting their effort into holding back the tide of decarbonization. The federal Economic Development Administration, part of the Department of Commerce, already supports these efforts in a variety of ways, and could do more in at-risk energy communities if they had dedicated funding. Other federal agencies like the USDA, Appalachian Regional Commission and Small Business Administration could also play a role in these planning efforts. Some fossil fuel hubs, such as western North Dakota’s Bakken shale region, have recognized that volatility looms and have been engaged in long-term strategic planning for years.
But insightful local planning has been the exception. In most fossil-fuel-producing regions, economic diversification initiatives have long been just words on wish lists, with far more attention paid to hunkering down to wait out the lean years in expectation of the next boom. In recent months, however, new regional and state-level efforts have begun to emerge in a number of places, among them Colorado, New Mexico and California. These nascent initiatives should offer useful lessons for a national-scale efforts.
Second, federal investment can help secure future economic growth. That means infrastructure such as reliable broadband, transportation and even water sustainability. It also means managing the legacy of pollution that has accumulated over more than a century from abandoned coal mines, orphaned oil and gas wells, and other environmental hazards. Federal investments to clean up these sites not only provide short-term employment opportunities that often match the skills of fossil energy workers, but they also advance local development, enhance ecosystem services and reduce ongoing air and water pollution.
Scaling up remediation programs won’t always be easy. For example, there are hundreds of thousands — perhaps more than one million — orphaned oil and gas wells scattered across the country. These wells, which were abandoned when their owners went bankrupt and left them as wards of the state, are often undocumented and unmapped. In other words, we’re sure there are a whole lot of at risk wells out there, but we don’t know precisely where they are or how much damage they’re causing.
To address this issue, federal officials will need to catalog them and prioritize remediation according to the danger they pose. Which, by the way, raises another issue: if the federal government takes responsibility for plugging these wells, both oil and gas producers and state regulators will have less incentive to clean up their own messes, past and future. One way or another, a much greater portion of the cost needs to be passed on to the polluters.
Third, there’s the tough nut of job training to crack. Workers need new skills to take advantage of whatever economic sectors emerge in their communities. If experience is any guide, federal work force development programs might most profitably channel skills acquisition efforts through community colleges, as well as work closely with businesses and unions that can offer apprenticeship opportunities and accurate assessments of the skills in short supply. To be successful, these efforts will most likely need to dovetail with local economic revitalization initiatives. For example, a community that is focused on becoming a hub for clean hydrogen infrastructure would want to offer training in welding and chemical engineering rather than computer coding.
Finally, public benefits will need to play a role while workers are in transition. A mix of programs on development, training infrastructure and environmental remediation programs won’t get every displaced worker over the hump. There is going to be a vital role for more in the form of child care, temporary income support (beyond unemployment insurance) and relocation assistance for those who want or need to move.
Who’s on First?
How can Washington effectively coordinate and deliver for affected communities? The answer: with a lot of help from their friends.
Dozens of agencies ranging from the Departments of Agriculture and Energy to the Small Business Administration will need to be involved. What’s more, state governments have their own economic development priorities and bureaucracies, not to mention thousands of local and regional economic development entities that seek to spur growth through work force training, tax incentives, infrastructure planning and other activities.
The National Academies of Sciences recommended that the White House establish a new office dedicated solely to delivering an integrated set of services to communities affected by the energy transition.
A recent report from the National Academies of Sciences recommended that the White House establish a new office dedicated solely to delivering an integrated set of services to communities affected by the energy transition. The NAS also recommended that each state establish a transition office, which could help identify local solutions and work with the federal government to secure resources, technical assistance and other federal assets.
Other proposed approaches include the establishment of regional entities similar to the Appalachian Regional Commission, which some local economic development professionals see as a model for creating bottom-up solutions to local economic challenges. The ARC is governed jointly by the federal government and the Appalachian states, and its grant-making process facilitates connections among local businesses, colleges, and local economic and work force development agencies.
This approach might be fruitful for other regions that share historical and socioeconomic characteristics, notably the refinery heavy Gulf Coast, the Four Corners region of the Rockies and the industrial Midwest where a shift away from fossil fuels, internal combustion engines and other emissions-intensive processes is bound to take a toll on local economies.
Learning by Doing
It is not realistic to expect that a single comprehensive policy will get all the details right. Consider an example.
Suppose the costs for deploying carbon capture, use and storage (CCUS) — the process of redirecting CO2 from fossil fuel combustion into storage systems ranging from underground caverns to the deep ocean — fall much more rapidly than expected. By happy coincidence, many of today’s oil- and gas producing regions would be able to take advantage of the fact that their underground geology is well-suited to permanent storage of CO2. And because many of the skills needed to deploy CCUS are similar to those now used by the oil and gas industry to extract and process fuels, this new technology could offer excellent opportunities for many workers who might otherwise be displaced.
But despite decades of deployment, CCUS is still an infant technology, especially when we consider the scale needed to make a dent in emissions. What if technological, regulatory or economic barriers prevent its large scale adoption? What if other nascent technologies, such as “green” hydrogen (separated from water with renewable-fuel-driven electrolysis), humongous batteries (to store energy when the sun doesn’t shine or the wind doesn’t blow) or advanced nuclear power (safer, smaller, cheaper), eat CCUS’ lunch?
In that scenario, the comparative advantage that oil and gas regions bring to the table would quickly diminish, suggesting a larger role for policy to redirect economic development and diversification efforts.
There are plenty of similar examples that make the same point: we know the fossil-fuel dependent energy system needs to change rapidly, but we don’t know how those changes will play out. But these are known unknowns. And we can monitor them in near real time by commissioning applied research. This concept of adaptive management is nothing new in the context of energy and environmental systems, but deploying it effectively will be a critical part of any successful transition effort.
It’s a Big, Big World
The energy sector isn’t the only one that’s on the brink of major structural changes. If machine learning and artificial intelligence systems continue to improve at exponential rates, labor markets could be upended by systems that can learn to execute far faster and more accurately than humans. And it’s not just low-skill workers who are likely to be affected. Automation in manufacturing, retail and truck driving will almost certainly be followed by intelligent systems that can perform legal analysis, examine medical scans and write articles analyzing the fast-changing energy system (maybe they’ll even be able to refine my puns).
In that future, which some experts believe is coming sooner than generally understood, policymakers will need to examine deeper questions about the role that labor plays in our economy and, perhaps more important, our society. Seen from this perspective, the energy transition may in fact provide a dress rehearsal for bigger things to come.
Because the timeline for the emissions reductions needed to avoid the worst impacts of climate change is well understood, policy makers can begin planning today for an energy future we know is needed. That planning process, despite its challenges and uncertain ties, is an essential first step to providing an equitable transition to a clean energy future. But it may also be a first step in a much longer journey toward labor markets across the economy that look nothing like they do today.