Bill Loveless: Hello and welcome to the Columbia Energy Exchange. A weekly podcast from the Center on Global Energy Policy at Columbia University. From Washington, I’m Bill Loveless. Our guest today is David Foster, the author of a newly released U.S. energy and employment report for 2019. It’s the product of the energy futures initiative. A Washington based think tank headed by former U.S. energy secretary Ernest Moniz and the National Association of State Energy Officials. The report previously compiled by the U.S. Department of Energy looks at employment in 2018 in five sectors. Fuels, electric power generation, transmission, distribution and storage, energy efficiency and motor vehicles. And it compares those numbers with those of the previous year. As we discuss the findings are generally positive showing for example that employment in the traditional energy sectors like fuels, electric power and transmission, distribution and storage as well as energy efficiency increased by 2.3% in 2018. Adding almost 152,000 jobs. Nearly 7% of all new jobs nationwide. This comes as the U.S. energy system continues to undergo an evolution in which market forces, new technology, tax policy and declining federal regulation affect the changing profile of the energy workforce. David Foster seems like the right man to author a report like this with a background well suited to the topic. Now, a distinguished associate at the energy futures initiative, he most recently was a senior advisor to then secretary Moniz from 2014 to 2017 where he designed this report when it was done at DOE. Before that he was the founding executive director of the Blue Green Alliance. A partnership of unions and environmental organizations and director of a United Steel Workers district covering 13 states. Now, he also sits on the board of Kaizer Aluminum and Oregon Still Mills. The talk is timely too as Washington and the rest of the U.S. grapple over the best way to address climate change. With the green new deal attracting so must attention. Here is our conversation. I hope you enjoy it. David Foster, welcome to the Columbia Energy Exchange.
David Foster: Thank you.
Bill Loveless: David, you spent years now engaged in issues involving climate change, economic development and the transition to low carbon economy, to audience as a business labor, environmentalist and government policy makers around the world. Tell us a little bit about that experience?
David Foster: Well, it’s been quite a trip for me and quite an evolution. I started out as a brick layer and a mill mechanic in a steel mill back in the 1970s. And from that experience I was always interested in energy, always interested in the relationship between manufacturing and the energy systems that support that. And so when I became a union official and was running about a quarter of the country for the United Steel Workers, largely comprised of energy in pensive industries from aluminum to iron ore mining to steel mills, to oil refineries, you name it. If it used energy, we were the union that represented the people that worked there and so, I became deeply interested in how energy affected the economic competitiveness of these American industries. As a result of that in the late 1990s, I started to see very clearly the impacts of climate change on affecting the lives of our members in the steelworkers union. That first came up note to me when the declining snowfall in the cascade mountains led to a much lower reservoir level in the _____ [00:04:04] power system which supported about 40% of America’s primary aluminum industry at that time. We lost 95% of those members as a result of changes in the electricity system that were directly a result of the decline in snow pack. And I used to think that these were the very first climate victims in North America.
Bill Loveless: You’ve seen the impact for some time now.
David Foster: I have indeed and that’s really what got my interest and so starting maybe three or four years after that. When I was still working for the steelworkers, I started attending UNFCCC conferences. And started to become one of the first representatives of organized labor in North America who even poked their nose into those meetings.
Bill Loveless: The UNFCCC.
David Foster: That’s right. Yeah. Went up to Quebec for one of the first of those conferences and met some of my colleagues from some of the European unions who are also interested in that. But started interacting with public officials from a whole range of different countries and that’s where my conviction that if we wanted to have climate solutions that worked, they were gonna have to have economic results that benefited the ordinary people as well.
Bill Loveless: And then of course, you did work. You went into the government here. You advised on many of these same topics at the Department of Energy during the Obama administration under the then secretary Ernest Moniz.
David Foster: I did. I was his senior advisor and economic development in energy policy with the focus on climate change and solutions that benefited states and municipalities here in the united states.
Bill Loveless: And in between all that of course, you have been the founding director of the Blue Green Alliance, an organization of environmental groups and labor.
David Foster: I was indeed and some people would say, I was a glutton for punishment. I would do anything regardless of the challenge and the discomfort that people sitting around the table with me were expressing. But I was of the believe then and I’m of the believe now that two of the most important social movements in the United States, the labor movement and the environmental movement, both need to change significantly if they want to succeed in the 21st century and they’ll do it so much better together than they can ever do it by themselves and it’s gonna be a long haul and a long struggle because the divide while it was once very significant, still brings issues of tension to the fore. But as long as folks keep talking to each other and keep looking around the corner, I think, they can find solutions that benefit both.
Bill Loveless: Well, one thing that may help people look around the corner, a little bit is this, is this new report, the U.S. Energy and Employment report which you are an author, it offers some encouraging news regarding the traditional energy sectors and the energy efficiency sector in the United States, finding that they continue to outperform the economy as a whole when it comes to job creation. What’s going on and what’s changing?
David Foster: Well, that is so important to me Bill. I think the idea that energy is the foundation of our economy. Affects virtually every other sector of the economy whether you’re in healthcare, whether you’re in manufacturing, whether you’re in transportation. Everything thrives or dives on energy, I like to say and if energy is performing as it should, then the rest of our economy does very well and so what we are watching and I’ve seen at least as we’ve measured it over the last four years is that we are producing jobs in the energy side of our economy quite a bit faster than we are every where else. And that simply means that we are gonna become a more competitive economy overall because we are dropping the cost of our energy. We are out and front on new technologies from a lot of the rest of the world and as long as we keep pushing in that direction, then I think all Americans will prosper as a result of this. And I’m very much a believer in all of the above energy technologies. I don’t think this is a one size fits all. It’s not a situation in which we have to rely simply on one form of energy in order to get where we need to go in fact. We need to cut across a broad _____ [00:08:31] of technologies and we also need to invest heavily in innovation and all of them, if we want to get where we want to go.
Bill Loveless: Let’s just talk about some of the findings in that report. Those sectors that traditional sector which is as I understand the fuels, electric power generation, transmission, distribution and storage added a 152,000 jobs in 2018. Petrol and fuels added the most jobs in the traditional energy sector with 33,500 new positions. That was an increase of nearly 6%. And natural gas extraction increased employment by 6.8%. They added 17,000 jobs. No surprises here, I guess but it does illustrate what’s been taking place in particularly with the shale boom.
David Foster: Yeah. No surprise except, I think what we noticed in this is that the decline in the price of oil that resulted in very significant layoffs and decline in both oil and natural gas extraction in the 2014 period and actually, I believe had a very great impact on the election in certain states because that impacted in turn manufacturing. And the manufacturing companies are producing a lot of the products consumed in oil and gas extraction and so, as the New York Times pointed out, I think about six months ago, we experienced a mini depression in parts of Pennsylvania, Ohio, Michigan as a result of that. And I think it went unnoticed to a lot of people in the United States. It didn’t us at DOE because we were tracking this kind of economic activity very clearly. But it’s an example to me of how the energy economy ripples through the rest of America and can cause really a fair amount of heartburn, if we are not paying attention to it. As a result of that, oil and gas companies went through a period of significant restructuring, cost cutting, advancing their technologies so that they could drill and operate more wells from a single well head. All kinds of things like that and as we’ve seen, they’ve come roaring back their competitive at a much lower price for global oil or gas than they were and I think everyone knows, we’re now a net exporter of gas and oil in the United States and we’ve become the largest producer of oil in the world again. All of which can make people nervous about what its impact is for climate change but I think it just sets the table in a slightly different way. I think back to the crisis we were in 2008 and the run up to oil prices that took place in the three years prior to the great recession and we were at a $145 a barrel. We thought that we were at peak oil and we thought we were on a desperation march to the clean energy economy and that the price that we were gonna pay was gonna be significant. And I used to think to myself then why are we so silly that when we have low oil prices but still knew this was a problem, we weren’t taking a thoughtful, mediated, slow approach over a 20, 35 year period where we didn’t have to administer shocks to the economy to get to that low carbon future. And so, I think now instead of decrying the low price of oil and being worried about it, we’ve been presented with that opportunity that we failed to take back in the early part of the century where we’ve got relatively low cost fossil fuels. They are driving a resurgence in manufacturing and other sectors of the economy. Now is the time when we have the least disruption, we can do long term thoughtful planning that gets us towards those climate solutions that we need by 2050.
Bill Loveless: Right, right. I want to get in a minute into more into the policy as respect of this, you know, what are the implications of these findings in this latest report for policy makers like you once were when you were at the department of energy, certainly secretary Moniz was when he was back there. By the way those same numbers, we’ve talked of oil and gas. I noted that the coal mining infuse production gain just 650 jobs that was less than 1% last year.
David Foster: That’s right. That’s right. Coal seems to have stabilized for the time being but generation jobs in the coal side of electric power generation dropped pretty significantly in 2018 losing something like 7,000 jobs.
Bill Loveless: Right. Let’s talk a little bit about electric power generation. It was more, employment was more or less flat from what I…
David Foster: That’s correct.
Bill Loveless: The last year. There were job losses in solar, nuclear and coal generation but they were partially offset by gains in natural gas, wind and combined heat and power. Solar jobs were down 3.2% or more than 8,000 wind jobs, 3.5%. Coal fired generation employment was down more than 6,600 jobs or 7.2%. On the other hand gas employment in power generation was up more than 5,200 jobs or about 4.9%. You are gonna reflect on what’s happening in the power sector.
David Foster: That’s right. Even though the, what we would call the low emissions jobs in electric power generation and fuel have stayed fairly steady over the last three years in terms of an overall amount. There has been a steady shift and the shift is really favoring in absolute job numbers, the transition to natural gas and to wind. Solar has been a little more volatile but that’s because you have a real mix of ultimate kinds of solar projects and what we see going on is more and more utilization of large scale utility, solar projects, large commercial projects and those are producing electricity at a much lower cost than the more labor-intensive residential solar projects. And so, that’s why I think we have seen a little volatility in the solar employment figures over the last two years. Some of the states that got into residential solar, the earliest like California and Massachusetts, those are the states where we’ve seen the more significant declines in solar jobs. But it’s really about this transition to the most efficient forms of solar generation.
Bill Loveless: Right. Tariffs were a factor too. The Trump administration imposed tariffs about a year ago. The solar industry attributes some of the loss in jobs or much of the loss in jobs to the imposition of those tariff.
David Foster: Yeah, that shook some solar companies up about what the ultimate impact was. I tend to think on the larger scale, a lot of these tariffs, as a lot of economic studies have shown have tended to simply raise prices in the United States and haven’t really had a direct result in changing what’s going on in the manufacturing sector except of course in a few areas like steel perhaps.
Bill Loveless: Right. And you have a background in construction of course and with the steel industry and I note that in the transmission, distribution and storage areas and in energy efficiency. Many of the jobs there involve construction, right, so that’s probably an area where you look particularly close with job opportunities.
David Foster: That’s right. I think something like 25% of the jobs, some 430,000 if I’m remembering correctly or in construction, transmission, distribution and storage. So, it’s really an essential part of our energy system there. One of the things, I think that’s interesting about the growth in what we call TDS jobs, I believe 33,000 new jobs created in the last year is first of all that it’s a much more heavily unionized part of the economy than the private sector is generally. So, almost two and a half-times the rate of unionization. So, this tend to be high skilled, high wage jobs and they are being supported largely by utility investments these days. So, I think that’s another important note on climate solutions because an upgraded energy infrastructures absolutely key to being able to integrate renewable energy into our system and it’s key to being able to use energy efficiently. So, the kinds of smart grid investments that are being made, all of these make a big difference when it comes to the transition to a lower carbon economy.
Bill Loveless: Now the bottomline for this report was encouraging. It said the firms recovered in a survey anticipate 4.6% employment growth in 2019. What’s driving that expectation?
David Foster: Well, we’ve had a strong economy for eight, nine years now. It’s just been adding jobs almost consistently month by month. For former president Obama’s term and now in president Trump’s three years in office and so, will it last forever, I don’t think any economist thinks that this is gonna go on forever. But the fact that we are consuming a lot more than we were. We paid down an awful lot of consumer debt during the initial years of the Obama administration. I think it gave us kind of healthier outlook than a lot of the rest of the parts of the world. And I’ll certainly give the Obama administration credit on the energy sector for having made the recovery act investments that they did in so called clean energy. That was the largest single investment like that in the world. We did a study on that at the time and demonstrated how over a million jobs have been created throughout all these new technologies that we think from putting waste heat power unit into a big steel mill outside Gary, Indiana to building a new wind transmission line across northern Montana. Those were the kinds of investments that I think really demonstrated the connection between climate solutions and good well-paying American jobs.
Bill Loveless: Right. At the same time, there is an encouraging factors but there was comments in the study in the report as well regarding the difficulty that employers run up against in finding qualified people. Many of them said this is a big problem.
David Foster: Right and that’s a crisis that’s been growing and not unexpectedly, I would say that as you reach what some are referring to as full employment. It gets harder to find qualified people in any occupation. But the thing that’s, I think especially frustrating is to see the counter play between the employer’s hiring expectations for the coming year and the difficulty they experienced in the past year. And so we’ve been watching this grow particularly in energy efficiency where two years ago, energy efficiency added something like a 133,000 jobs in one year and employers were saying, they expected 9% growth the following year. But the overall unemployment rate continued to go down and so employers were only able to expand by 3% in 2017. And added some 67,000 jobs. Still thought, they were gonna grow by 8% this past year and again couldn’t deliver on what their expectations were. They, you know, they added 3.4%, if I’m remembering correctly. Something like 76,000 jobs but think of the opportunities that are lost. And so we are facing this kind of crisis in the labor markets. Which of course is something to be concerned about on the other hand, it also provides a lot of opportunity to address social equity issues in this country, if we had a mind to do it. Our workforce participation rates, the number of people who are out actively looking for work which is a different number than the people who are actively looking for work and are employed. That’s what our unemployment rate it. But there are millions of people in America who dropped out of the workforce participation rate over the last 25 years and that’s an unaddressed social issue. It’s a lot of the reason why we have poor, inner city neighborhoods where people haven’t looked for work in decades. Not that they couldn’t work, if they got the proper orientation, training, incentives, transportation, issues dealing with day care and elderly parents, if all those issues were addressed, we’d be able to get people back into the workforce and then I would finally mention this incarceration issue that has kept so many people out of the workplace because it has become a common practice for employers today to demand a criminal background check and if somebody had ever served a sentence in prison even for a non-violent drug related crime, they are automatically excluded from the employment market. And that’s simply not something we need to be doing in this country especially during this kind of economic boom.
Bill Loveless: So, David, it raises the question of what is the role of government policy in supporting job creation in energy and you know, I raise that at a time when you know the green new deal is very much in the headlines these days and social equity is a big part of that cause. You know, what is the role of government in addressing these issues?
David Foster: Well, I believe the role of the government should be in an activist way and maybe I’m showing my age in this because I grew up in Minnesota in the time of Hubert Humphrey. I still remember when Hubert Humphrey died, the American congress in honor of him passed something into law and it was signed by the president called the Humphrey Hawkins act. Most people who hear about the Humphrey Hawkins act today, number one, don’t believe it is ever could have been passed and don’t believe it’s still on the books. What the Humphrey Hawkins act required was for the federal government to become the employer of last resort when an employment rose above 2.5% in any part of the country for people over the age of 25. And for three and a half per sent for people who are between the age of 18 and 25. So, I like to teasingly joke my friends with the green new deal that we already have legislation on the books. The problem is the congress never appropriated any money to run the job programs, we already believe in. So, I grew up in American politics in a time when it was very common for people to think that employment was something that Americans had a right to and it was the government’s responsibility to step into labor markets when they were not performing. Not every where, not all the time. But if there was a spike of unemployment in West Virginia because coal mines were shutting down, we have legislation on the books today that can require the federal government, if money was just appropriated to go into west Virginia and create jobs for the people that want to work.
Bill Loveless: And why does that never come up?
David Foster: Believe me, I’ve written opinion pieces about it and I’m enjoying talking about it right now on your show.
Bill Loveless: I have to admit, I’ve never heard of that law.
David Foster: Yeah. No, it was a landmark piece of legislation and it was to honor the legacy of Hubert Humphrey and the work he had done for jobs for working people his entire life and it certainly was the way we thought about it in America back in those days.
Bill Loveless: Let’s talk a little bit about the green new deal because again you bring the perspective of someone who has been involved in the labor, in government policy, in coalition building here in Washington. You sit on the board of Kaizer Aluminum and the steel company as well. You’ve been critical of the green new deal. You had a piece in the Hill newspaper recently raises some issues about the green new deal. Talk to me about that.
David Foster: Well, first and foremost, I love the enthusiasm of people for trying to solve these issues. But I also believe very strongly that we are not gonna address climate change in America, frankly any other country unless, we find a way to do it on the basis of unifying politics. So, I think that we’re being given as I said earlier, a luxury of talking about climate change during a period of full employment and during a period when we can invest in the kinds of programs that over a 30 year period will get us to where we need to go. And we can do that without disrupting large sectors of the economy. We can do it by sending price signals on the importance of lowering carbon by finding one way or another. Putting a price on carbon. We can do it by adopting a national clean energy standard that gives us a 30 year pathway on how we are gonna reduce carbon emission producing electricity generation and we can do it through the kinds of thoughtful massive investments in energy infrastructure that allow us to use energy more efficiently. But these are the sorts of things that are bipartisan that I think 70% of the American people can support because they won’t see it as causing massive disruption to the day to day flow of their lives. And I think at this point, it’s absolutely critical that, that’s our approach to climate change. If we think, we want to make it a devisive issue, then certainly, we can polarize America over that but it’s not gonna be a pathway to success. I’m concerned about success because we have limited time. All the scientific evidence points to our needing every single technology at our availability and the fact that we took that approach would allow us to bring in people from regions of the country who today are completely alienated from the idea of a quote green new deal. At least as they interpret it. And I say this from practical experience when I worked at the department of energy, I was point person to going into coal country and carrying on dialogues with disaffected communities, disaffected politicians, people who thought that the Obama administration didn’t care about them, didn’t listen to them and I found when you went to those communities, you talk to their representatives and instead of talking about the end of coal, you talked about the future of coal. You had a completely different conversation. And you instead started talking about what do we need to do to commercialize and perfect second and third generation carbon capture sequestration? We can’t solve climate change globally, if we don’t have that technology. So, how do we become the leaders and how do we help your communities and your universities, your institutions invest in those kinds of technologies and immediately, the conversation changed, I was no longer the enemy from the Obama administration. I was the person who brought light on to a question that they wanted to support.
Bill Loveless: I find that interesting, do you think there has been enough of that kind of dialogue taking place though because at the end of the day, it seems that, it’s those in the coal country, particularly in places like West Virginia, there are more disadvantaged in terms of finding a transition to new good paying jobs in energy.
David Foster: Yes. I think there is absolutely not enough of that conversation. And every time I went down there and certainly secretary Moniz was, I was very comfortable going into what others liberals or progressives might find uncomfortable situations, his experience was the same as mine that when you stuck to the facts and you talked about the truth of the global problem of climate change, there was a place where everybody at the table. And people were so welcoming of that. I frankly can’t tell you about the number of occasions, I had doing a town hall meeting in coal strip Montana, little community in the eastern part of that state that depends entirely on a 3,200 megawatt series of coal fired units and a big coal mine that provides coal, that’s based on the coal nation reservation. That plant goes away all the economic livelihood of that community and the surrounding area goes away. When they heard us talk about the viability of carbon capture sequestration, if we simply changed the 45 cue tax credit to make it more widely applicable, there was an audible sigh of relief in that town. And instead, as I said before, instead of being the enemy, we were the ambassadors to the future.
Bill Loveless: So, there would be opportunities in CCS carbon capture sequestration despite the fact that by and large coal plants are going offline in the United States.
David Foster: Well, we did, yes they certainly are but I think a lot of that has to do simply with market benefits that come from conversion to natural gas and or replacement with natural gas. But what we found was that certainly with a generation of coal fired power plants that have been built more recently in consequently were economically more efficient that with the 45 cue tax credit expanded and the clean power plant, those were the two necessary ingredients that would have been in play under the Obama administration, we would have salvaged something like 35 to 40 gigawatts of coal fired power plants in the United States existing ones. And this would have allowed us in the most cost efficient way possible to provide low emissions electric generation to all those parts of the grid and so that’s the kind of example why I think rigorous analysis on both the technology side and linking that up with the job benefits that come from it provides you with a salable policy to the American people that gets that 70% support that we need.
Bill Loveless: And you mentioned too the need for all to keep in mind all types of technology. You just mentioned coal and some coal could be kept online to plants where the appropriate carbon capture technology in your piece in the hill, you mentioned, you know, you said that the call for 100% renewable energy in the United States as some advocates of the green new deal have proposed in ten years or so is problematic for you because it maybe a unifying call for people working in some sectors like renewables but not necessarily those in say nuclear or even natural gas.
David Foster: Yeah, that’s right. I mean, we as our study found, if you look at the number of people working in natural gas throughout the entire value chain, it’s way over 600,000 people. If you look at nuclear, at 75,000 people, who are largely living in 80 or 90 urban, I’m sorry, in rural communities where those plants are located providing the best paying jobs in the electric power system, providing significant tax contributions to those communities and when they hear that a political program is being advanced that immediately puts their livelihood at risk, you’re throwing a jarring bomb into the middle of how people think about their economic future. But if instead, we provided the kinds of price signals to the economic and that we could work through this over a 30 year period instead of a ten year period, then people know that there is thoughtful planning going on that provides us with the transition to a system where we actually get where we need to go without the level of disruption and that gets back to the issue, I talked about a few minutes ago. We’re in a luxurious position right now with the full employment economy, low existing energy prices. That means that we can have a price on carbon without it blowing the rest of the economy through the roof. It means that we could do something with the clean energy standard that will allow transition planning over the appropriate amount of time and most importantly, it would be done with 70% of the American people support which means that it wouldn’t get undone when the next president takes office.
Bill Loveless: That would be your advise to take it to advocates of the green new deal.
David Foster: It would be my advice.
Bill Loveless: To the committees, the members of the congresses and all of them who are grappling at just beginning.
David Foster: Really, exactly.
Bill Loveless: They grapple with this new initiative.
David Foster: Exactly.
Bill Loveless: One more thing before we go, I want to ask you, you have another report, the organization, I guess we have another report coming up later this year on wages. Correct and if so.
David Foster: That’s correct.
Bill Loveless: Tell me a bit about that what we should be looking for.
David Foster: Yeah, well, any time, you have a lot of technology disruption in a given part of the economy, one of the questions that people find the most worrisome is what’s this gonna do to labor markets? So, what’s this gonna do to my job? And they want to know are we entering a period in which the horsey and buggy gives way to the automobile and who am I? Who are my communities and so, we thought that it would be very helpful, if we tried to produce a job quality index for the energy sector so that we were looking at what was happening in this sector and frankly where low wage jobs displacing high paying jobs. Where the benefits equivalent across these different technologies and industries. So that we could really provide people with a sense of the future. So, we did a wage survey this time along with the regular survey that we do of employers and we are hoping that sometime mid-spring, that we will produce this job quality index that will tell us more about what’s going on in energy. I can give you, you know, maybe just a little peak.
Bill Loveless: Sure, absolutely.
David Foster: Yeah, absolutely see a growth of professional services jobs in the industry. So, you see the role of technology as certainly creating jobs around energy efficiency and energy management in a way that was not existent 35 years ago. Those definitely are well paying jobs and we can see in preliminary data that the entry level positions are higher and that the ultimate hire level median wages are higher than they are in some of our traditional sectors. But we also see that in the utility sector, throughout energy generally, these are the highest paying entry jobs, the highest paying median level jobs and the highest median high paying jobs. So, we have an anchor that’s very, very strong in the energy system and we really need to be careful to make sure that we don’t unravel that because it’s been an anchor for middle class families in America for a long time.
Bill Loveless: David, thank you very much. This was an interesting report. We’ll look forward to the report on wages coming up soon and thank you for sitting down with us here on the Columbia Energy Exchange.
David Foster: Great. Very much enjoyed the conversation, Bill.
Bill Loveless: Well, that’s our conversation for today. I hope you enjoyed it. For more information on the Columbia Energy Exchange and the Center on Global Energy Policy, visit our website at energypolicy.columbia.edu or follow us on social media at Columbiauenergy. For the Columbia Energy Exchange, I’m Bill Loveless. We’ll be back again next week with another conversation.