Employment and Job loss experience of Canada’s oil and gas, coal workers

In September 2020, Canada’s oil and gas industry employed approximately 160,100 workers –a 0.9% increase from August 2020, but a 14% drop from September 2019.  In that same one-year period, employment in the services sub-sector decreased by 29%;  the pipelines sub-sector decreased by  30% and the exploration and production sub-sector increased by 3%.  These statistics are based on Statistics Canada’s Labour Force Survey (LFS) data,  made available on the  Employment and Labour Force Data Dashboard provided by PetroLMI, a labour market agency specializing in the oil and gas industry, jointly funded by government-industry.  Their September 2020 blog is here, summarizing the current trends ; an archive of PetroLMI reports re the trends and forecasts is here – most recently, The LNG Opportunity in Canada: Employment Prospects and Requirements (June 2020).

In addition to providing regular labour force data by industry, on September 22 Statistics Canada released two studies in its Economic Insights series:  How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from the Oil and Gas”  Industry    and How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from coal mining. Both studies use data, (including age),  from Statistics Canada’s Longitudinal Worker File, covering the period 1995 to 2016, for  workers permanently laid off from those industries..  

Job loss experience for oil and gas workers

How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from the Oil and Gas” Industry reports that “job loss leads to substantial and persistent earnings declines”, although “three years or five years after being displaced, a significant fraction of workers displaced from this sector earn more than they did in the year prior to job loss.”  Data show that re-employment has become progressively more difficult, and for workers laid-off in 2015 or 2016, less than two-thirds found paid employment in the following year, with most moving outside the oil and gas industry – construction being the most common sector for re-employment. CBC produced a summary of the Statistics Canada report in an article here , augmenting it with personal stories and commentary from economists.

Coal workers’ job loss experience

Similar analysis (the reports are authored by the same Statistics Canada economists) appears in  How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from coal mining . Contrary to the trend for oil and gas workers, finding employment within a year of lay-off became easier for coal workers more recently: 67% for workers laid-off in 1995 compared to 89% for those laid-off in 2005 . However, regarding earnings loss, the report compares coal data with all industries, and states: “These numbers imply that about half of workers laid-off from coal mining and from other industries during the 2004-to-2011 period saw their annual wages and salaries drop by at least 30% in the short term. Since coal miners are paid higher-than-average wages …. the median declines in annual wages and salaries of coal miners displaced from 2004 to 2011 amounted to roughly $14,800 (in 2016 dollars) in the short term, more than twice the median declines (of about $6,100) experienced by other laid-off workers.” Conclusions are similar to those in the report on oil and gas workers: a  transition to “green jobs” has not materialized, and “ for many coal miners and other workers, job loss leads to substantial and persistent earnings declines”, but, “the financial consequences of job loss are not uniform for all displaced workers. …. Three years after job loss or five years after job loss, a significant fraction of displaced workers earn more than they did in the year prior to job loss.”

Just Transition proposals for Australia’s Coal Industry workers

Flag_of_Australia.svgOutside of the United States, it seems that there is general recognition that the coal industry is in decline, and that this demands a planned response to transition both the energy mix and the communities and workers.  The Institute for Sustainable Development and International Relations (IDDRI) in Paris, for example, is coordinating a Coal Transitions Project, bringing together researchers from Australia, South Africa, Germany, Poland, India and China, to publish reports examining past experiences in the six countries in March 2017, culminating with a global report and a consideration of the future of coal by 2018.

Australia’s coal production has a long and highly-political  history – summarized in  “The long-term future of Australian coal is drying up”  in The Conversation (October 2015), or “Australia’s Addiction to Coal” in the New York Times (November 14, 2016) . Amidst this highly political climate, the current government established a  Senate Inquiry into the Retirement of Coal Fired Power Stations in October 2016,  to examine “the transition from ageing, high-carbon coal generation to clean energy”  in light of the Paris Agreement commitments on emissions reductions , and the Agreement’s  provisions re just transitions. The deadline for the Inquiry’s Final Report has been extended to the end of March; an  Interim Report was released at the end of November 2016, with Chapter 4 devoted to options for managing the transition for workers and communities.   Submissions to the Senate committee are here, listed by author. Three  noteworthy examples: the Australian Psychology Association reviews the “flow-on psychosocial impacts on individuals, families and whole communities” of mass closures, but argues for the possibility of  building “vibrant, diversified, energy sustainable communities with good local jobs, and capable of lifting the prospects of all citizens”. The submission states: “Community-led transitions that identify the community’s needs and resources, involve the community in the formulation and control of change, and strengthen the local people’s capacity for action, are critically important components of planned transitions. “”  The Appalachian Transition  and Renew Appalachia are cited as models of community building.

The Australian Council of Trade Unions (ACTU) submitted a thorough, 30-page proposal:  Sharing the challenges and opportunities of a clean energy economy: Policy discussion paper. A Just Transition for coal-fired electricity sector workers and communities.  Amongst the recommendations: establish  a “national independent statutory authority”, named Energy Transition Australia (ETA), within the environment and energy portfolio, and reporting to the Minister and parliament.   The  ETA would be overseen by a tripartite advisory board comprised of industry, unions and government, with a mandate to  oversee a planned and orderly closure of Australia’s coal fired power stations;  “manage an industry-wide multi-employer pooling and redeployment scheme, where existing workers would have an opportunity to be redeployed to remaining power stations or low-emissions generators; and  develop a labour adjustment package to support workers obtain new decent and secure jobs, including by providing funding for workers to access job assistance support, retraining, early retirement and travel and relocation assistance.”

Finally, a submission by Professor John Wiseman  of the Melbourne Sustainable Society Institute lists and synthesizes many of the recommendations from recent  Just Transition publications, including   Life After Coal: Pathways to a Just and Sustainable Transition for the Latrobe Valley  (October 2016). This report by the Environment department of the province of Victoria  focuses on the four Hazelwood coal-fired power plants, scheduled to close as early as April 2017.

U.S. Fossil fuel workers need early retirement, guaranteed pensions, and clean energy futures

A Just Transition program of income and pension-fund support for workers in fossil fuel–dependent communities could be provided for approximately $500 million per year, according to the Just Transition proposals by Robert Pollin and Brian Callaci. “A Just Transition for U.S. Fossil Fuel Industry Workers” was published in American Prospect in July and re-posted to Portside on July 11. It estimates the numbers of jobs at risk in the fossil fuel industry, contrasting coal and the oil and gas industry, and assumes  that displaced workers will be re-employed in a growing clean energy industry. The Just Transition proposals focus on: Retirements at age 64 with full compensation; Guaranteed fully-funded pensions; and Community transition.  For coal workers, pension funds are managed through the United Mine Workers of America Health and Retirement Funds, which is currently underfunded by $1.8 billion. The authors call for the federal government to  bridge that gap with funding from  companies and the government. In the oil industry, the authors call on the U.S.  Pension Benefit Guaranty Corporation to use its legislated  power to prohibit the oil companies from paying dividends or financing share buybacks until the pension funds are fully funded, and to place liens on company assets if pension funds are underfunded.  Acknowledging that the decline of the fossil fuel industry, already underway, will bring hardships to entire communities, they point to past experience: the Worker and Community Transition program operated by the Department of Energy from 1994 to 2004 to cushion the impact of nuclear decommissioning. Once example from that program:  a successful economic diversification program in Nevada, which repurposed a nuclear test site to what is now a solar proving ground.  Another previous community assistance program, the Defense Reinvestment and Conversion Initiative,  is deemed less successful.  The authors conclude that a Just Transition program is eminently affordable at approximately  1 percent of the $50 billion in overall public spending needed to build a U.S. clean energy economy. And they state,  “ It is also an imperative—both a moral and strategic imperative.”

The Human Face of Displacement in the Oil, Coal Industries

A June 17  article in The Tyee, “Oil Sands Workers Fear Becoming Climate Change Casualties”   gives voice to a Unifor worker from Fort MacMurray, and his opinions about Just Transition.  Also from the Canadian oil sands, the workers’ organization  Iron and Earth has posted an online survey seeking such workers’ views;  the group  proposes a Workers Plan  with 3 main goals:   Build up Canada’s renewable energy workforce capacity; Build up Canadian manufacturing of renewable energy technologies, and  Position existing energy sector workers, developers, contractors, and unions within the renewable energy sector.  The  plight of coal workers is described  in “Alberta coal communities look at what future holds as age of coal comes to end”   in the  National Observer (June 22); so far,  the community stakes its hopes on promised “consultations”.   For  the U.S., see “As Wind Power Lifts Wyoming’s Fortunes, Coal Miners are left in the Dust”   in the New York Times (June 20), which puts a personal face on the plight of laid-off workers from the Peabody coal bankruptcy. Although a nascent wind industry is being encouraged in Wyoming, it is not forecast to replace all of the estimated 10,000 jobs to be lost in the coal industry.   And from Australia, a June paper from the Green Institute, The End of coal: How should the next government respond? states that rather than propping up the dying fossil fuel industry,.. “the most honest approach, and the one that will be best for people and the planet, is to immediately prepare for a staged transition, facilitate a dignified exit from the coal industry for workers and communities, and ensure that the corporations which have caused this mess cover the cost.” Further, the author proposes a trial of guaranteed basic income provided to coal workers in the worst affected coal areas.