Quantcast
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

Slaughter of 90,000 Wild Horses Could Proceed Despite 80% Objection From American Public

The American Wild Horse Campaign on Thursday harshly criticized Interior Sec. Ryan Zinke's appointment of Brian Steed, the former chief of staff for U.S. Rep. Chris Stewart (R-UT), as the acting director of the Bureau of Land Management (BLM) as dangerous and out of step with the wishes of the vast majority of Americans.

"Rep. Stewart is leading the charge to slaughter America's wild horses and burros over the opposition of 80 percent of Americans," said Suzanne Roy, AWHC Executive Director. "Putting his deputy at the helm of the agency charged with protecting these national icons is like putting the wolf in charge of the chicken coop."

Keep reading... Show less
Renewable Energy

Bright Idea: This Lamp Harvests Its Own Energy From Plants

Now that's green energy. Dutch product designer Ermi van Oers and her team are working on the first atmospheric lamp powered by living plants.

The Living Light does not require an electric socket. It can harvest its own energy through the photosynthetic process of the encased plant, which means the potential of this off-grid light source could be "huge," as Van Oers told Dezeen.

Keep reading... Show less

Landmark Youth Climate Lawsuit Heads to Federal Appeals Court

There has been a significant development in the constitutional climate change lawsuit so far successfully prosecuted by 21 youth plaintiffs: The Ninth Circuit Court of Appeals has decided to hear oral argument over whether the Trump administration can evade trial currently set for Feb. 5, 2018. Oral arguments will be heard before the Ninth Circuit Court of Appeals in San Francisco on Dec. 11 and can be watched on a live stream beginning at 10 a.m. PST.

Keep reading... Show less
Martin Schulz / Flickr

Pope Francis: These 4 'Perverse Attitudes' Could Push Earth to Its Brink

Pope Francis issued a strong message to negotiators at the COP23 climate talks in Bonn, Germany on Thursday, warning them not to fall into "four perverse attitudes" regarding the future of the planet—"denial, indifference, resignation and trust in inadequate solutions."

Francis, who has long pressed for strong climate action and wrote his 2015 encyclical on the environment, renewed his "urgent call" for renewed dialogue "on how we are building the future of the planet."

Keep reading... Show less
Sponsored
The Greenpeace ship Esperanza sits near the Statoil contracted oil rig Transocean Spitsbergen. Greenpeacce

Groups Sue Norway Over Failure to Protect Environment for Future Generations

By David Leestma

Greenpeace and the Nature and Youth environmental group opened a lawsuit this week over Norway's failure to abide by its constitutional obligation to safeguard the environment for future generations.

The lawsuit, which focuses on local environmental damage and the contribution that oil extraction will make to climate change, challenges 10 licenses issued by the Norwegian government for exploration in the Barents Sea. Given to Statoil, Chevron and other oil companies, the licenses violate Norway's constitution and the Paris agreement, according to the plaintiffs. Government lawyers claim the case is a publicity stunt that risks valuable jobs.

Keep reading... Show less
Food
Lia Heifetz of Barnacle Foods hauls kelp for salsa. Bethany Sonsini Goodrich

A Plea for Kelp: These Farmers and Chefs Want to Make Seaweed the Next Superfood

By Sarah Bedolfe

Summer in southeast Alaska is kelp season for the cofounders of Barnacle Foods, Lia Heifetz and Matt Kern. Each week, the pair watches the tides and weather, waiting for the right moment to cruise out to the abundant kelp beds offshore. They lean over the side of the boat and pull up the fronds and stalks, one piece at a time. As soon as they get back to shore, they start processing the day's harvest into a local delicacy: kelp salsa.

Salsa and Alaskan algae might seem like odd bedfellows, but for Barnacle Foods, it's a calculated decision. The kelp's savory notes make the salsa's flavor "a little more explosive," according to Kern. And the pairing is also a practical one. "Salsa is such a familiar food item," Heifetz said. It's "a gateway to getting more people to eat seaweed."

Keep reading... Show less
Sponsored
Popular
Lorie Shaull / Flickr

Massive Pipeline Leak Shows Why Nebraska Should Reject Keystone XL

About 210,000 gallons (5,000 barrels) of oil leaked Thursday from TransCanada's Keystone oil pipeline near Amherst, South Dakota, drawing fierce outcry from pipeline opponents.

The leak, the largest spill to date in South Dakota, comes just days before Nebraska regulators decide on whether its controversial sister project—the Keystone XL (KXL) Pipeline—will go forward.

Keep reading... Show less
Male lion and lion cub in Zambia. Lip Kee / Flickr

Lion 'Trophy' Importation Ban Was Quietly Lifted by Trump Administration in October

By David Leestma

Last month the U.S. Fish and Wildlife Service (USFSW) began issuing hunting permits for the import of lion trophies hunted in Zambia and Zimbabwe.

Although the USFSW announced Wednesday it was lifting a ban on the import of elephant trophies, the new guidelines for importing sport-hunted lions have been quietly in effect and permits have been accepted since Oct. 20. Due to a 45-day waiting period, it's unclear if any permits have been granted so far. The decision is touted as "contributing to the conservation of lions in the wild" on the USFSW website.

Keep reading... Show less
Sponsored

mail-copy

The best of EcoWatch, right in your inbox. Sign up for our email newsletter!