Transitioning to the Green Economy with Rural America
With President Biden’s “American Jobs Plan” kicking-off a fresh discussion on infrastructure priorities across the nation, the Plan notably places clean energy and climate-friendly investments at the forefront by allocating 47% of the $2.2 trillion package dedicated towards such activities. The debate on the transition towards renewable energy is not new – Americans have been barraged by arguments related to humans’ contributions towards climate change, Earth’s “12-year lifespan” prior to irreversible damage, America’s energy independence, and the job opportunities present with the renewable energy industry. Though I’m a supporter of renewable energy and recognize the need to transition to clean energy, my discussions with rural community members, in communities where the sole economic driver is the oil & gas industry, highlighted the shortcomings of the national conversation on clean energy, and the urgent need for state and national legislation to bridge communities towards a robust renewable energy economy.
Rural Utahns viewed tradeoffs between natural gas production and clean energy by two criteria: job creation and stability, and energy efficiency (a distant second). From an employment standpoint, in 2019, ~1.7K statewide are employed in oil & gas extraction, with an average monthly wage of $8.5K (+107% compared to the state average); in an oil & gas dependent county like Duchesne, ~550 individuals are employed in the industry, paid on average $8.3K per month (+113% of the county average). Opposition to the transition to renewable energy stems from both the fear of hollowing out a key revenue and employment stream for the town, and lack of immediate job opportunities, for which previous skills from oil & gas work are generally relatable, in the clean energy industry. A resident of Duchesne County mentioned, “when the oil field goes down, everything here goes down too. Sure there is a need for other jobs in those moments, but more people start moving out, or they’re out of work in general, or not spending money in restaurants or gas stations.” Clean energy employers may not be physically present in rural communities, nor have the capacity to employ and train workers directly and quickly from the oil & gas industry. Many Americans feel the blueprint isn’t readily present to retrain and transition workers towards the new economy, nor has the blueprint “guaranteed” reasonably similar income in the green economy.
In terms of energy efficiency, the mainstream political left needs to better de-couple and develop policy solutions for coal and natural gas as separate sources of energy, recognize the energy dependence of our economy on natural gas, and realistically map the transition of the many natural gas processes to renewable energy. 40% of America’s electricity production is fueled by natural gas, natural gas is estimated to produce 50% - 60% less carbon dioxide than coal when producing electricity, and natural gas produces 90% of U.S. olefins, petrochemicals used in a range of paints, plastics, solar panels, medicines, mobile phones, and cars. The Duchesne County Commissioner vociferously defended natural gas, stating, “let’s see how people survive without being able to produce plastics and more without natural gas right away”. She also cited America’s better environmental standards compared to Russia, the Middle East, and other areas as reasons for expanding natural gas production, as a way to ensure cleaner natural gas production for the good of the environment.
As I wrote above, I’m a clean energy advocate and believe we ultimately need to move to clean fuel sources and recognize the harmful effects of fracking and oil drilling, but also recognize the incomplete economic vision we’re providing the rest of the country. A state representative in Utah acknowledged “the train has left the station”, and for a number of reasons, the market is dictating a swift transition to renewable energy. With the transition to renewable energy imminent over the next decade, there are numerous ways in which we can bring coal & natural gas-dependent communities towards renewable energy production incrementally, while ensuring families can sustain themselves economically with this new model of work.
Utah Coal Country Strike Team: An initiative in Carbon and Emery Counties in UT whose goal is to diversify the local coal-based economy and raise incomes for 10,000 households by 10%, through workforce training and new jobs, housing revitalization, enhancing the tourism infrastructure, and providing economic development incentives.
Expand tax credits to additional renewable energy sources: In 2021, Governor Cox in UT signed a bill to increase tax credits for hydrogen-based energy production, and hydrogen infrastructure. In 2018, Congress extended nuclear production tax credits apportioned in the 2005 Energy Policy Act to provide federal support for advanced nuclear power plants.
On-shore mining and production of lithium batteries, solar panels, and additional renewable energy technology: Chinese companies own ~50% of global lithium production, and 60% of electric battery production capacity; the US contributes <2% of global lithium supply, despite holding ~17% of global lithium reserves. State and federal governments could provide incentives to mining corporations to expand lithium mining, or increase tariffs on batteries produced by China to further incent battery production in the US.
Educate communities on the full catalog of jobs in the green economy: The renewable energy economy is reliant on more than the production of solar panels or wind farms. The National Association of State Energy Officials lists 5 categories of energy-associated employment opportunities: “Fuels”, “Electric Power Generation”, “Transmission, Distribution, and Storage”, “Energy Efficiency”, “Motor Vehicles”. Energy Efficiency, entailing jobs such as high efficiency & renewable heating & cooling, efficient lighting, and advanced materials and insulation, comprises the largest share of employment in the energy sector in Utah.
Create incentives for renewable energy companies to move to rural communities: State and local governments can consider several tax incentives to encourage companies to relocate to rural communities, particularly in communities who will transition from coal or natural gas-based economies towards a new industry.
Develop workforce training programs to retrain workers with skills necessary for new jobs in the green economy: My former employer, Social Finance, and the New York State Energy Research and Development Authority was recently awarded $8.2M from the US Departments of Treasury and Labor to design a social impact bond which enables energy efficiency job training to New Yorkers who are (1) long-term unemployed, (2) low-wage workers, or (3) youths aged 16-24. States can develop similar models for their respective communities to ensure residents are able to transition towards new employment with the requisite skills.
While the transition to the green energy economy is imminent, we need to be thoughtful about inviting rural Americans to the conversation to ensure policy enables their success during the transition. Ultimately, rural Americans also desire a stable job with a wage to support their families, and whether that’s through the renewable energy economy or other alternatives, governments and corporations need to provide a better roadmap for how all Americans will be supported in this transition.
Future blog posts will discuss additional implications of renewable energy on several industries (e.g. agriculture in Nebraska, manufacturing in Ohio), and articulate additional recommendations to smooth the transition to renewable energy.
What other policies and initiatives should state and federal governments undertake to ease the transition towards the renewable energy economy? Please comment below with any reactions, ideas, or recommendations for The Next Tide to improve in the future. Thanks for reading!
Blogs will be posted on a biweekly schedule on Mondays. The next blog will be posted on Monday, 4/26/2021.
