Quantcast
Trump Watch
Pixabay

Only Renewables Can Provide the Jobs and Revenue Trump Promised From Oil

By Jeremy Deaton

Since the beginning, President Donald Trump promised that stripping regulations on oil companies would drive employment. "We're bringing back jobs big league," he said.

But, after six months of regulatory rollback, Trump has done almost nothing that will create jobs on oil fields or offshore rigs. That's because low oil prices, not environmental protections, are stunting job growth, and Trump's push to nix federal regulations and expand drilling will only make oil cheaper.


Foreign producers have flooded the market, driving down the price of crude oil. Oil giants like Exxon have seen earnings drop off as a result. In an effort to cut costs and salvage profits, oil companies are laying off workers or automating operations, replacing workers with machines. Drilling rigs have gotten more efficient, allowing companies to pump the same volume of oil with half as much equipment and far fewer workers. Automation is creating a small number of high-tech jobs for skilled workers, but it's eliminating the well-paid blue collar jobs Trump promised to deliver.

U.S. Energy Information Administration

The oil and gas extraction sector lost more than 140,000 jobs between 2014 and 2016, when the price of oil hit a slump. The industry lost three times as many jobs over that period than it did between 2008 and 2009, during the recession.

U.S. Energy Information Administration

"When the inputs to a business get cheaper, that causes the business to expand, increasing employment," said Mark Jacobsen, professor of economics at UC San Diego. "From the perspective of a U.S. oil producer, input costs haven't changed much, but the output they produce is [now] worth very little. This causes the business to shrink, decreasing employment."

Even if the price of oil rebounds, it likely won't do so permanently. Electric vehicles are getting cheaper every day, and sales numbers for EVs are growing by leaps and bounds. Over the next few years, this will likely stunt demand for gas, leading to an oversupply of oil and a further downturn in prices, according to analysis from Bloomberg. The situation isn't likely to change. The UK, France and Norway have all passed laws banning the sale of gas-powered cars by 2040 or, in the case of Norway, 2025. Other countries are likely to follow suit.

Technology and economics, not environmental protections, are driving the loss of jobs. There is very little that this president—or any president—can do about it.

Those environmental protections, however, are key to warding off the punishing heat waves, powerful storms and persistent drought associated with climate change. Trump, for example, has tried axing a rule that limits methane pollution from oil and gas drilling sites. The measure, which imposes marginal costs on energy firms, is vital to reining in emissions of this extremely potent greenhouse gas. A recent draft report from 13 federal agencies was leaked to the press. It shows that a high-emissions scenario will result in as much as 10 degrees F of warming in the U.S. and up to eight feet of sea level rise.

But Trump has turned a blind eye to the carbon crisis. His energy policies fall into two broad categories. There are those that ease restrictions on oil companies—like his decision to allow firms to lobby foreign governments in secret. Then, there are his efforts to open up federal lands and waters to drilling.

Trump's proposed budget calls for opening the Arctic National Wildlife Refuge to drilling. He has already signed executive orders calling for federal agencies to lift restrictions on offshore drilling, approve the construction of the Dakota Access and Keystone XL pipelines, and review monument designations with an eye to opening federal lands to oil drilling.

"By increasing the amount of government land available for drilling, this could reduce the price producers pay for the land," said Jacobsen. "However, the difficulty in the case of oil is that increases in supply will just continue to drive down the price of the product, making it a difficult proposition to help the sector."

In other words, making it easier and cheaper to drill oil will do nothing to increase prices and create jobs. While Trump appears to understand that more production will suppress prices, he fails to see that lower prices will hurt job prospects.

Trump took credit for Exxon's plans to revamp its Gulf Coast refining facilities and create 45,000 new jobs, but his policies had nothing to do with the effort. Exxon began work on the project in 2013. Trump said that lifting restrictions on oil and gas development will create half a million jobs, but that claim comes from a widely discredited report from the Koch-backed Institute for Energy Research.

As it is, the price of oil is simply too low to justify expanding production. The controversial Keystone XL pipeline offers a case in point. In the years since opponents first took up arms against the project, the price of oil has plummeted. Now, companies are backing away from the Canadian tar sands, which are difficult and costly to drill. Despite having the backing of the Trump administration, the project may ultimately go nowhere.

Is there anything the president can do to create oil jobs? Trump has called for a rollback of fuel standards for cars and trucks. The move could buoy demand for oil in the short term, but it will do nothing to stop the long-term shift to electric vehicles.

All of this throws a wrench into Trump's $1 trillion infrastructure plan, which he promised would be paid for by the tax revenue from fossil fuel production. As Inside Climate News reported, to raise that much revenue, the federal government would have to dramatically raise taxes on oil or oil prices would have to skyrocket. Neither is likely to happen under the current administration.

Trump wouldn't want to drive up the price of oil. Cheap gas is good for consumer spending. When people spend less on fuel, they have more money left over to put toward other purchases. Moreover, an analysis from the University of Virginia shows a link between the cost of gas and support for presidents. High gas prices would likely hurt Trump's already abysmal approval ratings.

If the president wants to invigorate the energy sector, he might look to renewables. Solar jobs are growing 17 times faster than the economy as a whole, while wind technician is the fastest-growing job in the country. These are blue-collar jobs that don't require a college degree and can't be automated or outsourced. Trump could use his office to spur the growth of these fields.

"Continued investment in research and development could bring down the costs of clean-energy inputs even further, continuing to help the sector," Jacobsen said. "Government commitment to improve air quality can also help the clean energy sector, since it makes the costs faced by their competition higher."

It may sound paradoxical that low oil prices would stunt job growth in the oil sector, while low prices for wind and solar would create jobs in the clean-energy sector. That's because oil prices are being suppressed by glut of supply, which forces companies to lay off workers to remain profitable. The cost of renewables is falling thanks to technological advances, making the product more attractive to consumers.

"If oil prices are low, the oil industry has to curb its activities. That translates into job losses," said Karl Cates, a spokesperson for the Institute for Energy Economics and Financial Analysis. "Low prices for solar and wind are good for employment in the clean-energy sector because they drive deployment. Renewables represent an emerging sector that has huge cost advantages. It's growing because it's cheaper. Growth, of course, means more jobs."

Trump likely won't change course on energy policy. Too bad. He has the opportunity to create jobs "big league."

Reposted with permission from our media associate Nexus Media.

Show Comments ()
Sponsored
Leonardo DiCaprio/Getty

Leonardo DiCaprio Foundation Awards $20M in Largest-Ever Portfolio of Environmental Grants

Environmental activist and Oscar-winning actor Leonardo DiCaprio announced that his foundation has awarded $20 million to more than 100 organizations supporting environmental causes.

This is the Leonardo DiCaprio Foundation's (LDF) largest-ever portfolio of environmental grants to date. The organization has now offered more than $80 million in total direct financial impact since its founding in 1998.

Keep reading... Show less
Popular
Andrew Hart/Flickr

UN Environment Chief: Make Polluters, Not Taxpayers, Pay For Destroying Nature

Erik Solheim, the head of the United Nations' Environment Program, made an interesting point during a recent speech in New York: Companies, not taxpayers, should pay the costs of damaging the planet.

"The profit of destroying nature or polluting the planet is nearly always privatized, while the costs of polluting the planet or the cost of destroying ecosystems is nearly always socialized," Solheim said Monday, per Reuters, at the annual International Conference on Sustainable Development at Columbia University.

Keep reading... Show less
Soy was one of the key agricultural crops found to have decreased nutritional content when grown in a high C02 environment. Bigstockphoto

C02 and Food: We Can't Sacrifice Quality for Quantity

Bigger isn't always better. Too much of a good thing can be bad. Many anti-environmentalists throw these simple truths to the wind, along with caution.

You can see it in the deceitful realm of climate change denial. It's difficult to keep up with the constantly shifting—and debunked—denier arguments, but one common thread promoted by the likes of the Heartland Institute in the U.S. and its Canadian affiliate, the misnamed International Climate Science Coalition, illustrates the point. They claim carbon dioxide is good for plants, and plants are good for people, so we should aim to pump even more CO2 into the atmosphere than we already are.

Keep reading... Show less
Popular

Meet the 4 Horsemen of the EPA-pocalypse

By Mary Anne Hitt

Every week, another decision that endangers our families seems to come out of Scott Pruitt's and Donald Trump's U.S. Environmental Protection Agency (EPA).

The latest facepalm/outrage comes in the form of confirmation hearings that start this week for four completely unacceptable nominees to critical leadership positions at EPA.

Keep reading... Show less
Sponsored
Popular

Trump's Pick for Top EPA Post Under Scrutiny for Deep Ties to Chemical Industry

From Scott Pruitt to Betsy DeVos, President Donald Trump has notoriously appointed a slew of individuals with serious conflicts of interests with the departments they oversee.

The latest is Michael L. Dourson, Trump's pick to head the EPA's Office of Chemical Safety and Pollution Prevention, the government's chemical safety program. Media reports reveal that the toxicologist is under intense scrutiny for his extensive ties to the chemical industry and a resumé dotted with some of the biggest names in the field: Koch Industries Inc., Chevron Corp., Dow AgroSciences, DuPont and Monsanto.

Keep reading... Show less
Researchers warn that unchecked fossil fuel emissions would raise global temperatures to catastrophic levels. Gerry Machen / Flickr

New Study: Global Warming Limit Can Still Be Achieved

By Tim Radford

Scientists in the UK have good news for the 195 nations that pledged to limit global warming to well below 2°C: it can be done. The ideal limit of no more than 1.5°C above the average temperatures for most of human history is possible.

All it requires is an immediate reduction in the combustion of fossil fuels—a reduction that will continue for the next 40 years, until the world is driven only by renewable energy.

Keep reading... Show less
Sponsored
Popular
Hurricane-damaged Barbuda. Caribbean Community / Flickr

Devastated Island Leaders: Climate Change 'A Truth Which Hits Us'

As residents in Puerto Rico and the Virgin Islands prepared to take cover from Hurricane Maria, representatives of island nations devastated by hurricanes made a plea to the UN for recovery funding.

In a hastily-convened special session, leaders of Barbuda, the Dominican Republic, the Bahamas and other nations detailed the billions of dollars needed to rebuild after Hurricanes Irma and Maria, and argued that the increasing impacts of climate change on island nations required a rethinking of how the UN provides humanitarian aid.

Keep reading... Show less
Popular
Gen. Joseph L. Lengyel / Facebook

National Guard Chief Highlights Climate Change as Pruitt Touts Denial on TV

Climate change could be causing storms to become "bigger, larger, more violent," underlining the need to have a robust military response to disasters across the country, the top officer of the National Guard Bureau said Tuesday.

"I do think that the climate is changing, and I do think that it is becoming more severe," Gen. Joseph Lengyel told reporters, noting the number of severe storms that have hit the U.S. in the past month. The general might want to take U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt aside for a chat on climate change and disasters: Pruitt sat down for two friendly interviews on Fox yesterday to tout his idea for a red team/blue team "debate" on climate.

Keep reading... Show less
Sponsored

mail-copy

Get EcoWatch in your inbox