When Jennifer Granholm took office as the Secretary of the Department of Energy, she vowed she would leave no energy worker behind in the Biden administration’s quest to wean America off the fossil fuels that provide about 80 percent of the energy that is consumed in the United States. Under the Biden administration, the United States is embarking on transitioning from fossil fuels to “green energy,” which is likely to put hundreds of thousands, perhaps millions, of people out of work. The result is likely to not only mean economic pain for individual families, but also the devastation of communities relying on fossil-fuel extraction. On taking office, Granholm argued that the energy transition will create countless new jobs — and she promised to help fossil fuels workers translate their skills to these new positions. Two years later, the energy job situation is worsening. Not only are coal workers unemployed or working in jobs that pay much less, but so are refinery workers as some refineries have shuttered and others are converting and downsizing production to biofuels due to huge federal and state incentives.
For example, on October 30, 2020, the Marathon oil refinery in Contra Costa County, California, was permanently shut down and 345 unionized workers were laid off. California leads the nation in transitioning to renewable energy and weaning itself off of fossil fuels. In the aftermath of the refinery shutdown, many workers obtained employment but at lower wages and worse working conditions. Most had difficulty finding jobs that matched their skills. One in five Marathon workers was unemployed. Their earnings had declined sharply, as the median hourly wage of employed workers dropped from $50 to $38. Some workers were earning as little as $14 an hour.
The challenges faced by the Biden administration to live up to its green job promise are immense. Fossil-fuel companies employ about 1.7 million workers in the United States, including all the labor not directly involved in extraction and refining, but dependent on it. A lot of workers are needed to transport fuel, manufacture secondary products from it, and power communities with it, and there is a panoply of extended jobs reliant upon it, as it provides almost all of our transportation, including those for our consumable products. Workers in extractive industries tend to develop valuable, specialized skill sets, resulting in oil-and-gas jobs paying far more than renewable jobs in solar and wind.
For example, John Bayer, a safety specialist, lost his job at Marathon, as did his two brothers. He was not offered any form of government help, aside from unemployment insurance. Bayer, who has two kids, sent out about 50 applications and received just two callbacks. He ended up at an agriscience firm that nearly matched his Marathon wage but provided fewer opportunities for overtime, resulting in a yearly pay cut of $60,000.
James Feldermann took a job in Reno, Nevada, for $17 an hour less than he was making at Marathon. He rented a small studio apartment and spent months driving 200 miles back to the Bay Area every weekend to see his wife and son.
Besides the challenge of finding meaningful jobs for individuals, the government faces the challenge of supporting whole communities dependent on fossil-fuel extraction as fossil-fuel companies tend to be dominant employers where they are located. When they shut down, the central force in that local economy disappears. The consequences ripple out to the businesses and institutions that rely on the money those workers used to spend and the taxes the companies and workers used to pay.
At this point, neither California nor the federal government has developed a robust plan to reach out and help oil-and-gas workers. Thus far, the Biden administration’s plan for a just transition is a policy granting tax incentives to businesses investing in “energy communities,” which includes large grants to “green groups” whose political views seem to align with those of the Biden Administration. Clearly, the Biden administration is all words and no real action in helping individuals and communities to adjust to its climate agenda, but it is using money to strengthen its political base and increase dependency on government “green funds.”
Details of the Study
About 74 percent of former Marathon workers (excluding retirees) found new jobs. Nearly one in five (19 percent) were not employed but were actively searching for work; 4 percent were not employed and not looking for a job; and the remaining 2 percent were temporarily laid off from their current job at the time of the survey. Using standard labor statistics measures, the post-layoff unemployment rate among Marathon workers was 22.5 percent and the employment rate was 77.5 percent. If workers who have stopped actively searching for work were included, the post-layoff unemployment rate was higher at 26 percent.
Former Marathon workers found jobs that pay $12 per hour less than their Marathon jobs on average, a 24 percent cut in pay. The median hourly wage at Marathon was $50, compared to a post-layoff median of $38. At Marathon, hourly pay ranged from $30 to $68. The range of salaries in the post-layoff arena was as low as $14 per hour to a high of $69.
Workers found jobs in several sectors. The most common sector of re-employment was oil and gas, where 28 percent of former Marathon workers found post-layoff jobs but at wages 26 percent lower than at Marathon, mainly due to loss of seniority or non-union employment. The utility sector (electrical power, natural gas, wastewater management) was the second most common sector of re-employment with the median hourly utility wage at $41. The third most common re-employment sector was chemical treatment.
Overall, workers reported worse working conditions at their post-layoff jobs, even in higher-wage jobs. Workers described hazardous worksites, heavy workloads, work speed-up, increased job responsibilities, and few opportunities for advancement.
Further, workers reported increasing financial insecurity after the layoff. A full third of all workers described that they were “falling behind financially” a year following the layoff compared to only 3 percent before the layoff. Nearly one-third of all workers took early withdrawals from their retirement accounts to make ends meet following their layoff. Most re-employed workers did not move to find jobs due to the high rate of homeownership among Marathon workers (81 percent). Many expressed deep anxieties about their long-term ability to make mortgage payments.
The study was based on 140 surveys and 21 interviews.
The Biden administration realizes it needs to prevent widespread job losses in regions that rely on coal, oil and natural gas for employment and tax revenue, or at least that is its rhetoric, as it pursues its energy transition. The administration acknowledges that many fossil fuel jobs will be lost, but insist that “green jobs” will replace them. But these are just words. There is no real action. Coal and refinery closures are only the beginning if Americans allow Biden to continue with his climate agenda, putting Americans out of work and hurting communities that depend on tax revenues from those shuttered companies and laid-off workers. Since China dominates in the production of essential minerals and materials necessary for a green transition, perhaps the real “green jobs” will end up being outsourced to China.