➤ The energy transition is creating jobs in the renewable sector but systematically destroying them in the fossil fuel sector, especially coal country.
➤ The move away from fossil fuels will be painful for U.S. workers unless the government steps in.
➤ President Joe Biden's Build Back Better plan may need tweaks to pass, but it offers crucial provisions toward making life easier for workers.
BlueGreen Alliance Executive Director Jason Walsh |
U.S. President Joe Biden's Build Back Better agenda has, so far, hit a wall on its way through the U.S. Congress. However, in addition to several utility leaders, the president can count on a coalition of labor and environmental organizations to support some of the energy-related parts of the sweeping infrastructure plan.
The BlueGreen Alliance is a coalition of labor unions and environmental organizations founded by the Sierra Club environmental group and the United Steelworkers labor union. The alliance has grown to include 13 national labor unions and environmental groups collectively representing 15 million members and supporters. Its primary focus is on public policy dealing with climate, clean energy, jobs and infrastructure at the state and federal levels.
S&P Global Market Intelligence spoke with BlueGreen Alliance Executive Director Jason Walsh about the energy transition and issues facing the affected workers. The following conversation has been edited for clarity and length.
Jason Walsh:
It is particularly egregious when it comes to energy sector workers like coal miners who are losing what are often high-quality jobs that pay them a decent wage, and they're living in communities where there are not a whole lot of alternatives to that. It has not been a good trade-off for coal miners who are making $30 an hour, $35 an hour in the mines to take a long-haul truck driving job making $17 to $18 bucks an hour. The math is just not good.
On the flip side, a lot of jobs have been created to date as we've started to deploy technologies like solar and wind at scale. That's exciting and dynamic.
The challenge is that not enough of those jobs, on average, are high-quality jobs, and not enough of them are union jobs. That is the problem we're trying to solve as a coalition and one that we've been very focused on in the current Congress.
In a recent fact sheet supporting legislation to address this workers' energy transition issue, the alliance said a fair transition is not something that's going to happen organically. What do you mean by that?
The market doesn't care about these workers. So, if we leave it to the market, we are leaving these workers and communities out to dry. That's what we mean by saying that if we want this transition to be fair, it won't happen organically. We have to make some choices about where we invest and whom we invest in. That's why we think Build Back Better is such an important opportunity to get it right — to actually target some investments.
What are a few highlights from the Build Back Better legislation that would help energy workers?
At the highest level, the Build Back Better Act includes a set of targeted investments that would allow coal communities and workers, and other energy communities and workers, to receive substantial economic gains from the transition to clean energy, whereas today, they have primarily experienced only the economic pain of that transition. In the absence of the Build Back Better Act, the status quo of more pain, little gain for these communities, and workers will, I'm afraid, continue.
Just to pick off the first one on the list here, the $25 billion for the [48C Qualifying Advanced Energy Project Credit] has $4 billion dollars set aside for investments in communities that have experienced closed coal mines or old power plant closures. Then, there is a priority for all of that money for projects that hire workers that are dislocated from the mines or from power plants. That's big.
What we're trying to do here in Build Back Better is to capture the full value chain of this transition. We've created a lot of installations, construction jobs, operations and maintenance jobs today, all of which are important. We have not captured the supply chain. Given the nature of those jobs, their quality and their permanence, we think that's absolutely important.
We also, for the first time, attach a bonus credit to the production tax credit, investment tax credit, which has been the principal drivers for solar and wind and other renewables over the last decade, for projects that are located in energy transition communities.
We think, and we already have some indicators, that those kinds of tax incentives will drive behavior by developers and others who are in the bigger picture. They're going to have to dramatically accelerate the build-out of these technologies if we're going to meet our climate targets, which we believe that the entirety of the clean energy tax credit package will allow us to do.
Sen. Joe Manchin, D.-W.Va., is a crucial swing vote on Build Back Better and he declared the legislation, in its current form, "dead" earlier this month. What do you think will ultimately happen with this legislation?
Everyone's prognosticating about this, and yes, we don't yet have 50 votes in the U.S. Senate. I feel like we're a lot closer than some might say, and I believe there is agreement from Sen. Manchin, and he said this publicly, with big chunks of this legislation, including the pieces here that I'm talking about with you.
We are continuing to work on Build Back Better. We continue to be confident that some version of it can pass. I think the point we want to make right now is that for communities that have relied on the coal economy in places like West Virginia, but not only West Virginia, the investments in this legislation are absolutely critical if they're going to reap the economic gains of this transition, as opposed to only seeing and experiencing the economic downside of it.
Setting aside policy for a moment, we increasingly hear more and more about pressure on private companies to act on environmental, social and governance issues. Do you think that focus will have an impact on workers in the energy transition space?
I think we're seeing some of it, but I don't think we can rely on it. I don't think we can rely on the largesse of the private sector to make investments in these communities without some really clear demand signals and incentives, economic incentives to do so. You often get the story of the CEO who grew up in West Virginia and lives in Silicon Valley and is like, "I want to invest in where I came from." That's great. I totally applaud that. But it is not a systemic approach that's actually going to lift up entire communities or regions.