Amid a rush of institutional investment, renewables seem to have a bright future. And President Joe Biden has made a commitment, one way or another, to creating what he calls âgood quality jobsâ in green energy. The available evidence suggests that many of these jobs will come to fruition. But, at the same time, the decline in work in the oil and gas industry will not go up in smoke.
Indeed, while renewables such as solar and wind power have good prospects, traditional carbon-based energy providers are seen as necessary to bridge the gap to a totally clean energy future, which will likely take longer than many environmentalists hope. According to the United States Energy Information Administration (EIA), fossil fuels account for 60% of electricity production in the United States and nuclear power plants an additional 20%. Yes, renewable choices seem to be winning, and fossil fuels and nuclear power are expected to fall behind as a share of power generation, at least in many scenarios. That said, there will be plenty of oil and gas jobs left, but not as many as today.
EIA forecasts show that the use of natural gas in power generation will continue to increase through 2050, although renewables are ahead – levels will reach nearly 2,000 billion kilowatt-hours for the gas and 2,500 billion for renewable energies by then. Reason: The demand for natural gas is likely to survive, as renewables will not be ready to take all the reins.
Oil use in transportation is expected to stagnate by 2050. Nonetheless, said Raoul LeBlanc, vice president of research firm IHS Markit, it will take decades for the vast fleets of airplanes, automobiles and trucks running on petroleum are replaced. by electric vehicles (EVs) or other non-carbon propulsion systems.
Traditional energy, a booming and recessionary world that has seen more and more recessions in recent years, is not a place for secure employment. Oil prices skidded at the start of the pandemic in 2020, resulting in the fastest layoffs in the history of the US oil and gas industry. Although prices have risen and even increased than before, only about 50% of the jobs lost have returned, concludes a report from Deloitte. Cyclical hiring and firing of employees, along with the industry’s aging workforce, is shrinking the talent pool of traditional energy providers, the study finds. Jobs in oil and gas production in the United States hit a low in February and then began to add, reaching a total of 652,000 in October. That’s a far cry from the 2019 pre-coronavirus level of 780,000.
If traditional energy jobs are lost, they are likely to be found in the coal mining segment, which is shrinking due to falling demand for this dirtier fuel. Coal mining has seen more jobs decline than oil and gas, as utilities turn to natural gas. There are currently around 42,500 jobs in coal, 4,000 fewer than before the pandemic and half the number 10 years ago. Protests that well-paying jobs in coal should be allowed to return ring hollow with Elizabeth Levy, portfolio manager at Trillium Asset Management, as they now represent only a tiny fraction of the nation’s workforce. âThat’s less than the people of Cedar Rapids, Iowa,â she observed.
Renewable energy jobs have also been hit by the economic downturn of 2020. An estimated 3 million Americans are now working in clean energy, down about a tenth from last year. But a recovery is underway, with more robust growth forecasts for later. The US Department of Energy saw slight improvements in mid-year, with jobs in battery storage increasing 1%, positions in hybrid electric vehicles up 6% and increasing by 2 % of positions in wind power generation. These jobs are expected to continue to grow, by up to 8% over the next 10 years, which is as fast as the average job growth rate expected in the United States.
Category totals are not strictly comparable for traditional businesses and renewables, as employment in solar, wind, etc. is spread over many areas and requires more assembly than fossil fuel rigs. While the extraction, transportation and refining of fossil fuel products are concentrated, renewable work encompasses a wide range of areas, including rooftop solar panel installations and the production of wind turbine blades.
One of the advantages of solar and wind power is that, unlike fossil fuels, they won’t be depleted at some point, noted Shawn Reynolds, portfolio manager for global resources and environmental sustainability strategies at VanEck. . âWind and solar farms can be replacedâ if they wear out, he said.
A lot of money is expected to be invested in renewables, supporting their future as job creators. The International Energy Agency (IEA) reports that renewables are expected to dominate energy investments in 2021, accounting for around 70% of the $ 530 billion countries spend on new electricity. Wind turbine service technicians and solar PV panel installers are topping the list of fast-growing jobs as more businesses and homeowners seek renewable sources of electricity, according to the IEA.
To be sure, oil and gas companies are also spending millions on exploration and increased capacity. Liquefied natural gas terminals are being built around the world to transport goods to countries without any of their own deposits. Tellingly, however, parts of the traditional energy industry are launching their own initiatives to get into renewable energy. Oil and gas service companies Halliburton and Baker Hughes have established research centers to accelerate the development of renewable technologies. BP, Royal Dutch Shell and other European energy companies are selling oil fields, planning major carbon emission reductions and investing billions in renewables. (In contrast, US giants Chevron and ExxonMobil have only tiny renewable projects and focus on traditional fuels.)
Are renewable jobs well paid? While the data is patchy, there is evidence that workers’ compensation in renewable energy is comparable to that in carbon-focused jobs, at least in the skilled trades. Take the electricians: The Bureau of Labor Statistics (BLS) says the compensation of workers in solar industries is comparable to similar jobs in traditional energy, as well as other industries.
The infrastructure bill Biden just passed and his social spending measure, now before the Senate, aims to bolster America’s decaying electricity grid, serving all sources of energy it needs. they are underground or higher. And the continued availability of fossil fuels should give flexibility to producers of renewable energy, if the wind weakens or the sun is not shining, when sufficient storage is not yet available, underlines Trillium’s Levy. Thus, net-net green jobs should continue to sprout.
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Tags: Baker Hughes, BP, Department of Energy, ESG Special Report 2021, fossil fuels, green jobs, Halliburton, Halliburton and Baker Hughes, Natural gas, petroleum, renewable energy, Royal Dutch Shell, solar, wind