Monday, May 18, 2020

Energy Job Losses in the US Due to COVID-19

COVID-19 has caused massive energy job losses. Some sectors have been hit harder than others and while many energy jobs will return others may not. Our economies will be decimated by the coronavirus and millions of jobs have disappeared forever, however, there is an upside to this deadly pandemic that bodes well for employment opportunities in some sectors over the long term.

This is the worst unemployment situation since the Great Depression. So far 36 million Americans have lost their jobs and according to Fed estimates, a total of 47 million jobs could be lost resulting in an unemployment rate of 32 percent. The energy sector has not been spared and fossil fuels have been hit particularly hard. While 20 percent of the clean energy and efficiency jobs could be lost up to 33 percent of the fossil fuel exploration and production workforce could lose their jobs.

The coronavirus is merely hastening the demise of dirty energy.  Long before the pandemic hits the fossil fuel industry was in decline. In Canada more than 53,000 oil industry jobs were lost between 2014 and 2019. The the oil crash of 2020 sent the industry into a tailspin and is causing a spate of bankruptcies. Shale oil and other more expensive forms of fossil fuel extraction are no longer economically viable.

Despite massive subsidies directed towards the fossil fuel industry the green economy continues to provide far more jobs than oil, gas and coal combined. Clean energy is driving green job growth and 5 years ago it was already apparent that renewables were replacing fossil fuels. This is a trend that continued into 2020 and accelerated by the outbreak of COVID-19.

According to the U.S. Energy and Employment Report, in 2019 clean energy workers outnumbered fossil fuel workers three to one. According to E2, the clean energy sector is one of the fastest-growing sectors in the country with a 10.4 percent increase in job creation since 2010. At the beginning of 2020 the clean energy and energy efficiency sectors employed 3.4 million workers. This included more than 2 million jobs in energy efficiency and half a million jobs in renewable energy.

Billions of dollars worth of renewable energy projects have been delayed or canceled in the U.S. An April report indicates that almost 100,000 renewable energy jobs have been lost due to COVID-19 public health measures. The U.S. clean energy and energy efficiency sectors have lost 594,300 jobs representing 17.8 percent of the clean energy workforce and another 255,653 positions could be lost by the end of June.

At the start of the year the US oil industry employed over 150,000 people in extraction, The U.S. oil and gas industry lost 51,000 drilling and refining jobs in March many thousands more are expected to follow. In Texas alone 30,000 jobs have been lost in the industry and that could go up to 100,000 which is one third of the states exploration and production workforce. When related jobs are factored the total number of jobs lost could be as high as one million people in Texas alone.

There are many who are reluctant to celebrate the demise of the fossil fuel industry because of concerns about the economic and employment impacts. However, clean energy jobs are better jobs than those afforded by the fossil fuel industry for a number of reasons. This includes the fact that clean energy provides more jobs and a wider diversity of jobs. These jobs are not centralized and therefore they are more resilient and contribute to economic diversity. These jobs are part of a growth industry and they are therefor more secure than those in the fossil fuel sector.

Perhaps most importantly clean energy does not contribute to pollution and death (millions die each year because of polluted air). Nor does it contribute to climate change which represents an existential threat to all life on this planet. Fossil fuels are the leading cause of climate change. All the way back in 2012 fossil fuels were the most hated industry in the U.S., since then we have seen how oil spills destroy the environment, we have seen report on fossil fuel corruption, deception and disinformation. All of these factors are driving an increasingly vigorous fossil fuel divestment efforts.

We have to factor the costs associated with failing to reign-in climate change as well as the windfall of benefits associated with the green economy. Climate action offers trillions of dollars in savings and stellar ROI. The benefits of climate action far outweigh the costs. In addition to direct benefits from climate action there are a raft of co-benefits that prove the net economic gains. Every dollar invested in climate resilience offers a tenfold return. Business leaders are also coming to terms with the fact that they cannot afford to deny climate risks. Fossil fuels are destined to die because the industry is destroying the planet upon which all economic activity depends. One of the many lessons that we have learned from the COVID-19 pandemic is that there is a tremendously high cost associated with inaction.

Energy has taken a dramatic hit but renewables will bounce back while many dirty energy jobs are gone for good.

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