Survey of oil and gas workers shows little knowledge of energy transition

A report commissioned by international union coalition Industriall examines the geopolitics of fossil fuel producing countries (mainly, the United States, China, Europe and Russia) and the investments and performance of the Oil Majors (Chevron, ExxonMobil, Shell, BP, Total, as well as nationally-owned PetroChina, Gazprom and Equinor).  Energy transition, national strategies, and oil companies: what are the impacts for workers? was published in November 2020, with the research updated to reflect the impacts of Covid-19. 

In addition to a thorough examination of state and corporate actions, the report asked union representatives from four oil companies about how workers understand the energy transformation and its impact on their own jobs, and whether the concept of Just Transition has become part of their union’s agenda.     

Some highlights of the responses:

  • “the union members interviewed showed little knowledge about either the risks that the current transition process can generate for the industrial employee, or about the union discussion that seeks to equate the concern with the decarbonisation of the economy with the notions of equity and social justice. In some cases, even the term “Just Transition” was not known to respondents.”
  • Their lack of knowledge regarding the Just Transition can be justified by the fact that they do not believe that there will be any significant change in the energy mix of these companies.
  • Regarding information about energy transitions within the companies, “Managers are included, but the bottom of the work chain is not”
  • Lacking corporate policies or support, some  employees feel compelled to take responsibility for their own re-training

Echoing results of a similar survey of North Sea oil workers in the summer of 2020, published in Offshore: Oil and gas workers’ views on industry conditions and the energy transition, one European respondent is quoted saying: “In the end, everyone is looking for job security, good wages and healthy conditions. It doesn’t matter so much if the job is in another area, as long as it is in good working conditions”.

The researchers conclude that: “Far from being just a statement of how disconnected workers are from environmental issues, these researches reveal a window of opportunity for union movements to act in a better communication strategy with their union members, drawing their attention to the climate issue and transforming their hopes for job stability and better working conditions into an ecologically sustainable political agenda.”

The report was commissioned by Industriall and conducted by the Institute of Strategic Studies of Petroleum, Natural Gas and Biofuels (Ineep), a research organization created by Brazil’s United Federation of Oil and Gas Workers (FUP). 

Principles and best practices for a Just Transition for Canada’s fossil fuel workers

Economist Jim Stanford has written a timely new report which should be required reading for politicians setting their hair on fire about Joe Biden’s stated intention to cancel the Keystone XL pipeline project on Day one of his presidency.  Employment Transitions and the Phase-Out of Fossil Fuels, released on January 18, argues that “the actual number of fossil fuel jobs and the number of communities reliant on the industry is small enough that a just and equitable transition plan for workers is very feasible” – and the key is timing.

Stanford’s report begins by setting out the statistics regarding fossil fuel employment in Canada: “under 1% of total payroll employment in Canada (or about 160,000 jobs) is located in seven industrial sectors which together comprise most of the composite fossil fuel industry. “ Using 2016 Census data, the report discusses the distribution of fossil fuel jobs by province and community, showing that Alberta  accounts for 75% of fossil-related jobs in 2016, but even there, only it accounts for  7% of all provincial employment. 18 fossil fuel-dependent communities are named, where fossil fuel jobs account for 9.5% of employment – including two well-known examples, Wood Buffalo/Fort McMurray in Alberta and Estevan in Saskatchewan.  The report continues to compare employment in the fossil fuel industry and in the health care sector, Canada’s largest employer. The aim is not to diminish the importance of fossil fuel employment, but to illustrate that employment possibilities exist in other sectors, even within fossil fuel-reliant communities.

Stanford looks ahead and states: “given weakening global demand for fossil fuels, depressed prices, continued infrastructure constraints, and aggressive cost-cutting by fossil fuel employers (shedding labour to protect profits despite lower energy prices), fossil fuel industries will see continued downsizing of their employment footprint.”   He summarizes the employment transitions of other sectors in Canada’s history, notably fisheries, auto manufacturing, manufacturing – as well as other sectors currently transitioning, including retail, transportation, and newspapers and media, and documents the overall dynamics which are always churning labour markets. All these arguments build to the report’s final section, which is to outline the principles and best practices for planning effective employment and community transitions for the inevitable decline of fossil fuels. 

Principles and Best Practices for Transition

Repeating a point he made in a similar report about Australia, Stanford speaks out for younger workers: “Fossil fuels will disappear as a major source of energy within the foreseeable future. Given that reality, it is unhelpful, and indeed cruel, to encourage more workers – including some just entering the workforce – to try to build their livelihoods in an industry that will soon disappear.”

And further

 “ …in an effective, orderly labour market transition….. Most fossil fuel workers will not end up producing solar panels or windmills; in fact, if we manage this transition effectively, most fossil fuel workers will not need to find new jobs at all. As with the climate itself, the sooner we start this transition, the lower its ultimate costs will be, and the greater its net benefits. Delaying these necessary actions only makes matters worse – including for fossil fuel workers. In this context, statements of supposed “solidarity” with fossil fuel workers expressed by some business leaders and political representatives are entirely dubious. Pretending that fossil fuel industries can carry on as “normal” for decades to come (or worse could actually be expanded) is a cruel hoax.”

Employment Transitions and the Phase-Out of Fossil Fuels  was published by the Centre for Future Work, which is a project of the Australia Institute – which also operates in Canada in collaboration with the Canadian Centre for Policy Alternatives, housed in the CCPA’s Vancouver office.   The report was commissioned by Environmental Defence Canada, which released its own graphically-enhanced summary version, Steady Path: How a transition to a fossil-free Canada is in reach for workers and their communities . 

Reports documenting the state of global climate change released in advance of the Climate Ambition Summit

The online Climate Ambition Summit on December 12 marks the fifth anniversary of the Paris Agreement, to be co-hosted by the U.N. and the United Kingdom and France, in partnership with Chile and Italy. It calls itself “a monumental step on the road to the UK-hosted COP26 next November in Glasgow….. countries will set out new and ambitious commitments under the three pillars of the Paris Agreement: mitigation, adaptation and finance commitments. There will be no space for general statements.”

In the weeks before the meeting, intergovernmental agencies have released a number of reports documenting the urgency of the issue:

State of the Global Climate 2020 from the World Meteorological Organization  – a detailed discussion of global climate change impacts related to temperature, ocean temperature, precipitation, storms, GHG emissions and Covid-19.  The highlight:  “The average global temperature in 2020 is set to be about 1.2 °C above the pre-industrial (1850-1900) level. There is at least a one in five chance of it temporarily exceeding 1.5 °C by 2024”.

The Production Gap Report measures the gap between the aspirations of the Paris Agreement and countries’ planned production of coal, oil, and gas. This year’s report concluded that countries plan to increase their fossil fuel production over the next decade – and singled out Canada, Australia and the U.S. in this regard. The takeaway message: “the world needs to decrease production by 6% per year to limit global warming to 1.5°C”.  The report also outlines six areas of policy action needed in COVID-19 recovery plans, including reduced government support for fossil fuels, restrictions on fossil fuel production, and commitment to direct stimulus funds to green investments. The Production Gap Report is produced jointly by the Stockholm Environment Institute , International Institute for Sustainable Development (IISD), Overseas Development Institute, and E3G, as well as the United Nations Environment Programme.

The Emissions Gap Report  published on December 9 by the United Nations Environment Programme documents  global greenhouse gas emissions: GHG’s have grown 1.4 per cent per year since 2010 on average, with a more rapid increase of 2.6 per cent in 2019 due to a large increase in forest fires. Even with a brief dip in carbon dioxide emissions caused by the COVID-19 pandemic in 2020, the world is still heading for a temperature rise in excess of 3°C this century. Hope lies in a low-carbon pandemic recovery which could cut 25 per cent off the greenhouse emissions expected in 2030. The report analyses low-carbon recovery measures so far, summarizes the scale of new net-zero emissions pledges by nations and looks at the potential of the lifestyle, aviation and shipping sectors to bridge the gap.   It concludes with a chapter titled The Six Sector Solution to Climate Change, which argues that reducing emissions in the sectors of  Energy, Industry, Agriculture and Food, Forest and Land Use, Transportation, and Buildings and Cities has the potential to limit emissions enough to hold the world temperature increase to 1.5 degrees.

The 2020 Arctic Report Card was published on December 8 by the National Oceanic and Atmospheric Administration (NOAA), written by 133 scientists from 15 countries. It finds that the Arctic as a whole is warming at nearly three times the rate of the rest of the world, owing to feedback loops between snow, ice and land cover.  The report summarizes trends that are growing more extreme and have far-reaching implications for people living far outside the region.   A Canadian view of this report appears in “Scientists Plead for Action as Soaring Temperatures Show Arctic in Crisis” in The Energy Mix   (Dec. 11).

Ocean Solutions that Benefit People, Nature and the Economy  is  a report released by the High-level Panel for a Sustainable Ocean Economy in December as part of the launch of a new campaign, Transformations for a Sustainable Ocean Economy.   Canada is among the 14 nations who are members of the Panel; the Secretariat is at the World Resources Institute.  The report “ builds on the latest scientific research, analyses and debates from around the world—including the insights from 16 Blue Papers and 3 special reports commissioned by the Ocean Panel: ‘The Ocean as a Solution to Climate Change: Five Opportunities for Action’, ‘A Sustainable and Equitable Blue Recovery to the COVID-19 Crisis’ and ‘A Sustainable Ocean Economy for 2050: Approximating Its Benefits and Costs’. “  A compilation of the many reports of the Panel is here .

No new pipeline construction needed in Canada, and domestic fossil fuel consumption peaked in 2019

The key takeaway from a new flagship government report is that no new pipeline construction is needed in Canada, and  the current pipelines under construction – the TransMountain Expansion, Keystone XL, and Enbridge Line 3 Replacement- are sufficient to accommodate all future crude oil production.  The  new report, Canada’s Energy Future 2020: Energy Supply and Demand Projections to 2050, is the latest annual report by the Canada Energy Regulator CER- (formerly the National Energy Board) and discusses the future of all energy commodities under two scenarios – a Reference case and an Evolving Scenario, which includes a carbon price of $75 per tonne in 2040 and $125 per tonne in 2050.

Under the Evolving Scenario of increased policy intervention, Canada’s domestic fossil fuel consumption peaked in 2019 and by 2050, it will be 35% lower than the 2019 level. However, the report states that even under the Evolving Scenario, fossil fuel consumption is forecast to make up over 60% of Canada’s fuel mix in 2050.  It is worth noting that these CER reports have been criticized in the past for overestimating fossil fuel demand – for example, by the Pembina Institute in 2019, in “Why Canada’s Energy Future report leads us astray” . In 2020, Pembina calls for changes to the modelling assumptions for future reports, saying “the scenarios modelled in the report are still not aligned with commitments set out in the Canadian Net-Zero Emissions Accountability Act. This model of Canada’s energy future is not consistent with the future that Canada has committed to in the Paris Agreement.” Further, it points out “Canada’s Energy Future 2020 report does not reflect the range of recent scenarios for global oil demand, such as those recently released by the International Energy Agency and BP, where demand is predicted to fall by 50 to 75 per cent over the next 20 to 30 years in order to achieve net-zero emissions.”

Other reactions to the CER report focus on the forecast of declining need for pipelines , summarized in  “No Future Need for Trans Mountain, Keystone XL Pipelines, Canadian Energy Regulator Report Shows”  (The Energy Mix, Nov. 25), and even echoed in the conservative Financial Post .  Followers of David Hughes will recognize this argument that he has made many times, most recently in Reassessment of Need for the Trans Mountain Pipeline Expansion Project , published by the Canadian Centre for Policy Alternatives at the end of October .

The press release and summary from the Canada Energy Regulator report is here, with data sets and interactive tables here  and an archive of past annual reports here.  Beyond fossil fuel projections, this year’s Report includes a discussion of the transition to a  Net-Zero Emissions energy system, focusing on  personal passenger transportation, oil sands production, and remote and northern communities. It also briefly notes the impact of  the Covid pandemic, stating  “Canadian end-use energy demand will fall by 6% in 2020 compared to 2019, the biggest annual drop since at least 1990. Energy to move people and goods will fall the most due to less travel and increased remote work and learning.” (A report  published by the World Meteorological Office on Nov. 23 provides preliminary estimates of a reduction in the annual global emission between 4.2% and 7.5% because of Covid).

 

 

 

Costs and job impacts of Green Recovery and Just Transition programs for Ohio, Pennsylvania

 Impacts of the Reimagine Appalachia & Clean Energy Transition Programs for Ohio:  Job Creation, Economic Recovery, and Long-Term Sustainability was published by the Political Economy Research Institute (PERI) in October, written by Robert Pollin and co-authors Jeannette Wicks-Lim, Shouvik Chakraborty, and Gregor Semieniuk. To achieve a 50 percent reduction relative to 2008 emissions by 2030, the authors propose public and private investment programs, and then estimate the job creation benefits to 2030. “Our annual average job estimates for 2021 – 2030 include: 165,000 jobs per year through $21 billion in spending on energy efficiency and clean renewable energy;  30,000 jobs per year through investing $3.5 billion in manufacturing and public infrastructure. 43,000 jobs per year through investing $3.5 billion in land restoration and agriculture.  The total employment creation through clean energy, manufacturing/infrastructure and land restoration/agriculture will total to about 235,000 jobs. “ 

There are almost 50,000 workers currently working in the Ohio fossil fuel and bioenergy industries, with an estimated 1,000 per year who will be displaced through declining fossil fuel demand.  As he has before, Pollin advocates for a Just Transition program which includes:  Pension guarantees; Retraining; Re-employment for displaced workers through an employment guarantee, with 100 percent wage insurance; Relocation support; and full just transition support for older workers who choose to work past age 65. The report estimates the average costs of supporting approximately 1,000 workers per year in such transition programs will amount to approximately $145 million per year (or $145,000 per worker).

Pennsylvania report

Using an identical structure, the same authors modelled a Green Recovery program for Pennsylvania, released as a preliminary document, Impacts of the Reimagine Appalachia & Clean Energy Transition Programs for Pennsylvania. They estimate that, “as an average over 2021 – 2030, a clean energy investment program scaled at about $26 billion per year will generate roughly 174,000 jobs per year in Pennsylvania.”

The authors estimate that oil and natural gas consumption in Pennsylvania will fall by 40 percent by 2030, and coal will fall by 70 percent, resulting in the loss of 2,870 fossil fuel-based jobs per year between 2021 – 2030. Given the demographic composition of the workforce, they estimate that 1,056 workers in the industry will voluntarily retire – leaving 1,814 workers per year who will experience displacement (0.03 percent of the total workforce). Just Transition measures similar to those called for in Ohio are presented, with the statement that “the overall costs of providing these displaced workers with generous just transition support will be trivial relative to the size of Pennsylvania’s economy. The just transition program should be financed jointly by federal and state government funding sources.” More detailed costing is promised when the final study for Pennsylvania is released.

The Political Economy Research Institute (PERI) at University of Massachusetts has published related studies in a “Green Growth” series, available from this link. States studied are Colorado (2019) , Maine (August 2020), New York (2017), and Washington State (Dec. 2017). In September 2020, PERI released Job Creation Estimates Through Proposed Economic Stimulus Measures, in which Robert Pollin and Shouvik Chakraborty modelled the impact of a $6 trillion, 10-year economic stimulus program for clean energy and infrastructure across the U.S.