You would be hard-pressed to find a single economic sector that was not impacted in some way, whether disrupted, devastated, or boosted, by the spread of the novel coronavirus. The shockwaves created by the pandemic continue to ripple through the global economy even now, and will continue to do so for a long time to come, especially as the Delta variant begins to tragically rip through communities with low vaccination rates around the world. While no industry was left untouched, few were as hard-hit as the energy sector, which continues to grapple for stability and normalcy as the dust from the first wave of the pandemic settles. Oil and gas, in particular, were sent into unseen levels of volatility in the early days of the COVID-19 pandemic. Back in 2020, in what some are now referring to as “Black April,” global oil markets saw demand take a massive dip as industries shut down and people around the world retreated into their homes to shelter in place. The pressure that this put on the members of OPEC+ quickly led to a dispute and then all-out oil price war between Saudi Arabia and Russia, leading to further flooding the already saturated markets with a massive oil glut. Oil storage around the world quickly maxed out, making owning oil a liability overnight. This is what led to the unfathomable and historic oil price crash on April 20, 2020, when the West Texas Intermediate crude benchmark plummeted below zero, paying buyers nearly $40 to take a barrel of oil off the market.
The devastation in the Permian Basin and the United States shale sector as a whole was swift and severe. “Overall, one in 10 U.S. energy workers lost their jobs in 2020,” EcoWatch reported this week, “with oil and gas workers hit hardest despite billions in bailouts and substantial payouts to executives.” Oil and natural gas lost a devastating 186,000 jobs, or 21% of their workforce, in 2020 in the U.S. alone. But while those at the bottom of the shale totem pole suffered and entire oil towns dried up and blew away like so many tumbleweeds across West Texas, other sectors of the energy economy held steady, and even grew.
A Department of Energy report released on Monday showed that employment in renewable and clean energy sectors, including batteries, was far and away more resilient than fossil fuels to pandemic pressures. While oil and gas languished and think pieces about the end of oil flooded headlines, employment in the wind energy industry expanded by nearly 2%, employment in the electric and hybrid-electric vehicle sectors increased by 8% and 6% respectively, and battery storage jobs, too, saw a significant boost.
The growth of clean energy jobs in the United States is on track to keep increasing, with global market pressures leading the world toward a clean energy transition, as well as efforts on the part of the Biden administration to feature clean energy as one of the central foci of its sweeping infrastructure bill, based on the well-founded argument “that a transition away from fossil fuels can create millions of good-paying union jobs while countering climate change,” as summed up by Reuters.
Keeping clean energy jobs within the U.S. economy, however, will be much easier said than done. After decades of dragging their feet on cutting fossil fuel subsidies, addressing climate change, installing smart grids, and putting money and incentives behind clean energy infrastructure in general, the United States has fallen far behind in the global clean energy race.
While clean energy holds the most promise for the future of the energy-sector labor market, the U.S. could very easily see those markets dominated and those jobs outsourced to Europe and China, both of which are a lot further ahead in their spending on clean energy infrastructure and research and development. And those lofty goals set by the infrastructure bill haven’t even been agreed upon by the highly partisan U.S. congress. In Texas, a state that arguably has the most to gain by diving into a clean energy transition, politicians are doggedly and dogmatically fighting any and all perceived threats to oil and gas. Yes, the world still needs billions of barrels of oil and the sector can’t and won’t dry up overnight, but it’s no longer up for debate that fossil fuels are in their twilight years. Hanging on to oil is not going to do the United States, or its energy workers, any favors in the long run.
By Haley Zaremba for Oilprice.com
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