California unions endorse a plan for Green Recovery and fossil fuel phase-out

A Program for Economic Recovery and Clean Energy Transition in California, released in June, is the ninth in a series of reports titled Green Economy Transition Programs for U.S. States, published by the Political Economy Research Institute (PERI), and written by researchers led by Robert Pollin. In this latest report, the authors address the challenge of economic recovery from the Covid-19 pandemic, and contend that it is possible to achieve California’s  official CO2 emissions reduction targets—a 50 percent emissions cut by 2030 and zero emissions by 2045— and at the same time create over 1 million jobs.  The investment programs they propose are based on the proposed national THRIVE Agenda, (introduced into the U.S. Congress in February 2021), and rely on private and public investment to energy efficiency, clean renewable energy, public infrastructure, land restoration and agriculture. The report discusses these sectors, as well as the manufacturing sector, and also includes a detailed just transition program for workers and communities in the fossil fuel industry.

In Chapter 6, “Contraction of California’s Fossil Fuel Industries and Just Transition for Fossil Fuel Workers”, the authors note that only 0.6% of California’s workforce was employed in fossil fuel-based industries in 2019 – approx.112,000 workers. They model two patterns for the industry contraction between 2021-2030:  steady contraction, in which employment losses proceed evenly, by about 5,800 jobs per year; and episodic contraction, in which 12,500 job losses occur in just three separate years, 2021, 2026, and 2030.  After developing transition programs for both scenarios, they estimate that the average annual costs of episodic contraction would be 80% higher ($830 million per year) than the costs of steady contraction  ($470 million per year). As with previous PERI reports, the authors emphasize the importance of the quality of jobs to which workers relocate:  “It is critical that all of these workers receive pension guarantees, health care coverage, re-employment guarantees along with wage subsidies to insure they will not experience income losses, along with retraining and relocation support, as needed. Enacting a generous just transition program for the displaced fossil fuel-based industry workers is especially important. At present, average compensation for these workers is around $130,000. This pay level is well above the roughly $85,000 received by workers in California’s current clean energy sectors.”  Relief Programs for Displaced Oil & Gas Workers Elements of an Equitable Transition for California’s Fossil Fuel Workers  is a 2-page Fact Sheet summarizing the chapter.

The report was commissioned by the American Federation of State, County and Municipal Employees Local 3299, the California Federation of Teachers, and the United Steelworkers Local 675, which represents workers in the oil and chemical industry.  The report has been endorsed by nineteen labour unions – not only those who commissioned it, but also the Alameda Labor Council, Communication Workers of America District 9 ;  International Federation of Professional and Technical Engineers Local 21 ; various locals of the  Service Employees International Union ; two locals of the  United Auto Workers; UNITE HERE Local 30 ; United Steelworkers Local 5 ; and the  University Professional and Technical Employees—Communications Workers of America 9119.  

Lead author Robert Pollin is interviewed about the report in two articles: “Labor Unions Rally Behind California’s Zero-Emissions Climate Plan“ (Truthout, June 10) and  “A Green Transition for California”  (American Prospect, June 11), which includes a video of the interview.

Oil well clean-up can create jobs – but not the way Alberta spent Green Recovery funding

The Big Cleanup: How enforcing the Polluter Pay principle can unlock Alberta’s next great jobs boom was released in June by the Alberta Liabilities Disclosure Project . It makes thirteen recommendations, including the creation of an independent, non-profit Reclamation Trust to wind down end-of-life companies and use their remaining revenue to fund the cleanup of their wells. The report states that implementing all its recommendations will create 10,400 jobs and generate $750 million in wages, and contribute nearly $2 billion  Alberta’s Gross Domestic Product annually for the next 25 years.  The report also includes new calculations and analysis on the growing crisis of Alberta’s oil and gas well liabilities, stating that the average projected cost of cleaning up Alberta’s over 300,000 unreclaimed oil and gas wells is $55 billion dollars, with the top 20 Alberta municipalities alone facing $34 billion in cleanup liabilities in their boundaries.  

In April 2020, the government of Canada announced its Covid-19 Economic Response Plan, including  $1.72 billion  directed toward the cleanup of inactive and abandoned oil and gas infrastructure across the western provinces. $1 billion of this funding was directed to Alberta. Dianne Saxe, the former Environmental Commissioner of Ontario, had been one of the early critics of this program, for example in “Canada’s murky bail-out deal for oil and gas will cost us all”  ( National Observer, April 21).   In early July, a further evaluation was published by Oxfam Canada, the Parkland Institute, and the Corporate Mapping Project : Not Well Spent: A review of $1-billion federal funding to clean up Alberta’s inactive oil and gas wells .  The report finds some alarming failures on many fronts – including that the program is not tracking methane emissions, so it is impossible to determine the emissions reduction impact.  Author Megan Egler also cautiously argues that the public funds were used to accomplish what industry should have been responsible for, according to a polluter pays principle.   

One of the stated goals of Alberta’s $1 Billion Site Rehabilitation Program (SRP) was to create 5,300 jobs. However, Not Well Spent states: “ If this is met, funding of $1billion will create 5,300 jobs at $188,680 per job. This is $41,800 more per job than money injected into the industry through the Orphaned Well Association to do similar work in 2018. There has been no clear explanation from the Government of Alberta why the public dollars to create one job are higher in the SRP program.” The report also notes that 23% of the total amount of funds disbursed went to only five companies out of the 363; only 10% was allocated to clean-ups on Indigenous lands.  The author makes recommendations for improvement in future funding, to ensure better accountability and transparency, which would be more consistent with a “polluter pays” objective.

69% of Canada’s fossil fuel workers willing to move to clean energy jobs, says new poll

On July 14, Iron and Earth Canada released the results of online poll done on their behalf by Abacus Data , surveying 300 Canadians who currently work in the oil, gas, or coal sectors. The survey showed that  61% agreed with the statement:  “Canada should pivot towards a net-zero emissions economy by 2050 to remain a competitive global economy”, and 69% answered “yes” to “Would you consider making a career switch to, or expanding your work involvement in, a job in the net-zero economy?”.  The survey also measured workers’ interest in skills training and development for jobs in the net-zero economy, with 88% interested for themselves, and 80% supporting a National Upskilling Initiative . 

Although workers reported a high degree of optimism for the future (58% agreed that “ I will likely thrive in a Canadian economy that transitions to net-zero emissions by 2050”), workers also expressed their concerns – with 79% of workers under age 45 worried about reduced wages, and 77% of workers under 45 worried about losing their job.  44% of all workers would not consider taking a clean economy job if it resulted in a wage cut.

The full survey results are here , with breakdowns by age, sex, province, occupation, and Indigenous vs. Non-Indigenous.   Articles summarizing the survey appeared in The National Observer, The Narwhal , and The Energy Mix.

On a related note: many younger people are not attracted to a future in the fossil fuel industry, as described in the recent CBC News article “University of Calgary hits pause on bachelor’s program in oil and gas engineering” (July 8), and “U of C sees ‘remarkable’ drop in undergrads focusing on oilpatch engineering and geology “ (Oct. 6 2020).

Job growth in clean energy will more than offset fossil fuel losses

Clean Energy Canada released a new report on June 17,  projecting that Canada’s clean energy sector will grow by almost 50% (over 200,000 jobs) by 2030, to reach 639,200 jobs. The report states that this will far exceed the 125,800 jobs expected to be lost in fossil fuels.  Surprisingly, the province with the greatest increase in clean energy jobs will be Alberta – forecast  to increase by 164% by 2030.  As the introduction concludes: “Oil and gas may have dominated Canada’s energy past, but it’s Canada’s clean energy sector that will define its new reality.”

The New Reality report is the latest in the “Tracking the Energy Transition” series, updating the 2019 report.  It is based on modelling by Navius Research – presented in a technical report here. Employment and GDP numbers are considered under two policy scenarios: the Pan-Canadian Framework for Clean Growth and Climate Change (the Liberal government’s previous policy) , and the Healthy Environment, Healthy Economy policy, unveiled in December 2020.  The definition of “clean energy jobs” is broad, and forecasting breaks down into industry sectors – for example, stating that  jobs in electric vehicle technology are on track to grow 39% per year, with 184,000 people set to be employed in the industry in 2030—a 26-fold increase over 2020. The report also highlights specific examples of the pioneering clean energy companies in Canada.

Updated: Agreement reached to save Terra Nova offshore oil and gas field in Newfoundland

UPDATE: As reported by CBC News on June 16 in “New hope for Terra Nova as Suncor announces tentative deal to save N.L. oilfield” , and by a Unifor press release, an agreement in principle has been reached to restructure ownership of the Terra Nova oil fields, offering a path forward which may save the jobs of the workers. Details are not yet available, but Suncor will increase its equity stake and previous owners may participate in the new structure, contingent on the province honouring its commitment to provide $205 million from the oil industry recovery fund, and some $300 million in royalty relief .

Workers demonstrated outside the Newfoundland legislature on June 14 and 15 , as politicians debated inside about the fate of the Terra Nova oil field and an ultimatum from Suncor Energy, asking for the government to buy the assets of the Terra Nova FPSO, an offshore production and storage platform which employed nearly 1,000 workers in 2019, which is the last time oil was produced. Suncor is the last company remaining in the consortium which owned the oil field.  The complexity of the situation is described in several CBC articles, including:  “Talks to save Terra Nova oilfield collapse after N.L. government rules out equity stake” (June 10), and  “As deadline for Terra Nova approaches, pressure mounts to save troubled oilfield” (June 11). To date, the government has refused to buy the asset, saying that the risks are too great because the oilfield is estimated to be 85% depleted. Instead, it has agreed to provide about $500 million in cash and incentives to the company.  As of June 16, Suncor Energy has still not announced a decision, as reported by CBC in “Terra Nova deadline comes — and goes — without word of its fate” .

Unifor Local 2121 represents the workers at Terra Nova, and organized the demonstrations at the legislature.   Unifor describes the rally here, and in this press release asserts that the Terra Nova decision is a harbinger of the future of the Newfoundland oil and gas industry.