It’s Oil, Not Renewables, That Seems to be Killing Jobs

Workers in the oil industry are about to become victims of their own success. As the American oil industry has hit its boom through the advent of new drilling techniques such as tar sands extraction and hydraulic fracking, oil prices have plummeted -- bringing gasoline prices down with them.

But these new techniques, which were developed years ago, only came into play in recent years as oil prices went up to the point where they became economical. The techniques have been so successful that the U.S. has climbed to the head of the pack, surpassing Saudi Arabia as the world’s largest oil producer. Inventory is at record levels, and prices have tanked. As production peaked, hiring was on the rise -- creating instant boom towns in states like North Dakota and Texas, and overseas in places like Perth, Australia, Brazil, and in towns along the coast of the North Sea.

Oil companies don’t like prices this low, but the only way to get prices back up is to cut production, and that means laying off workers. That started in January. By now, worldwide layoffs have already exceeded 100,000. The cuts will tear a wide swatch through the economy as not only will the laid-off workers cut back on their spending, but also a great deal of collateral spending associated with oil production will also see a decline. The 59,000 layoffs among oil service workers in the U.S. dwarfs the 7,100 layoffs in manufacturing that occurred over the same period.

There is more than a little bit of irony here, as conservatives and fossil fuel interests have long pushed back against any number of measures to encourage energy conservation and the growth of renewable supply, calling them “job-killers.” Meanwhile, when it comes to jobs, renewable energy is lighting up the scoreboard. The U.S. solar industry added 23,000 new jobs in 2013, bringing that total up to 142,000. That’s a 20 percent growth rate.

According to the National Electrical Contractors Association, there are now over a million American jobs associated with renewable energy. The breakdown is something like this:

• Solar                                    142,000


• Wind                                    75,000 to 80,700


• Hydro                                   200,000 to 300,000


• Geothermal                          25,000


• Biomass                               470,000


• Energy efficiency                 380,000

Internationally, the numbers are even greater. According to the International Renewable Energy Agency (IRENA), the number of jobs associated with renewable energy (direct and indirect) worldwide, was a total of 6.5 million by the end of 2012. China had the largest number, following by Brazil, then the U.S.

Meanwhile, in the American oil fields, rig counts, drilling permits and well completion rates continue to head south. Some are looking to the government to repeal a 40-year-old law that prohibits American oil companies from exporting crude. If the ban was lifted, inventory levels would drop, and prices would begin to rise again. In the meantime, production keeps chugging along, like a runaway train. Some experts predict that oil could hit $20 a barrel at the bottom.

A study by the consultancy HIS, claims that anywhere from 394,000 to 859,000 new jobs could be created by 2030 if the oil export ban was lifted. Roughly three indirect supply chain jobs would accompany each job in the oilfields, while twice that many would occur in the broader economy.

It’s hard to say exactly what the impact of this would be on climate change. On one hand, rising gas prices would likely lead to people curtailing their driving, but it would also mean more fracking and more tar sands production.

The bottom line for surviving climate change seems to rest on leaving as much fossil fuel in the ground as possible. And as Alex Taurel, deputy legislative director at the League of Conservation Voters, says: “It doesn’t make any sense to export oil and spur destruction of public lands to only benefit oil companies and provide oil to China.”

So, those jobs would come at a high price to the planet. Why bother with that when energy efficiency alone is expected to create 1.3 million new jobs over the same time interval, while clean energy can add another 4.5 million net new jobs?

For more information, check out this story on Alternet.

Image credit: aoenday: Flickr Creative Commons