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More signs emerged of deep trouble for the energy sector. Clean energy companies shed 106,000 jobs in March according to an industry analysis of figures from the Labor Department’s tally of unemployment claims, including jobs in solar and wind companies, electricians, roofers and plumbers who install energy-efficient products, and factory employees who make hybrid cars, LED lighting, and energy-efficient appliances. And on Tuesday, the Texas agency that regulates the oil and gas industry held a public hearing to consider whether the industry should cut production to keep oil prices from falling further, a drastic step aimed at preventing a slew of bankruptcies and permanent job losses.
Why This Matters: These are unprecedented job loss numbers across the energy sector and production cuts are unheard of since the 1970s. The Texas cuts are unlikely since other states would likely just sell more gas and fill in the gap and the cuts would be very painful for the 360,000 people in Texas whose jobs depend on fossil fuels. At the same time, the oil and gas crisis creates an opening for clean energy to step in, but only if there are clean energy businesses that survive the pandemic. On the positive side, gas production cuts would result in a reduction in the methane pollution caused by flaring off natural gas.
A Disappearing Industry
Oil prices have dropped quickly since the beginning of the COVID-19 pandemic. With little travel taking place around the globe, prices for a barrel of oil have plummeted from$60 to $20. The Railroad Commission is the organization that oversees Texas’s oil and gas industries – they held the public hearing to discuss how to deal with dropping oil prices and still compete with Russia ‘s and Saudi Arabia’s oil cuts. “If the Texas Railroad Commission does not regulate long term, we will disappear as an industry, like the coal industry,” said Scott Sheffield, CEO of Pioneer Natural Resources. This has been a growing concern for many fossil fuel industries. Younger workers are looking for jobs in industries that do not have a negative effect on society and offer more stability for careers. Now is the time to help fossil fuel workers transition to what had been more stable clean energy jobs — but now those jobs are in doubt as well.
President Trump trumpeted his trade deal with China, but so far it has been a bust, according to The Wall Street Journal — the Chinese have not purchased nearly the amount of energy (in terms of total dollars) as they promised — only $2B in oil and gas purchases against a commitment of $25B for this year.
A federal judge in Washington, DC ruled yesterday that the Dakota Access Pipeline must shut down and empty all its oil until the government completes an environmental review of the pipeline’s impacts, giving the Standing Rock Sioux Tribe, whose reservation lies downstream, a huge victory. Similarly, late in the day, the Supreme Court refused to overturn the order of a district judge that shut down construction of parts of the Keystone XL pipeline so it is also blocked for now.
Why It Matters: The Dakota and Keystone XL news is greatly tempered by the fact that numerous other pipeline projects can go ahead despite their inadequate permit unless they are individually challenged in court and blocked.
Yesterday, Dominion Energy and its partner, Duke Energy, announced they were ending a 600-mile natural gas project that would have cost at least $8 billion to complete. As the Richmond Times-Dispatch wrote, Dominion and Duke canceled the construction of the Atlantic Coast Pipeline in the face of mounting regulatory uncertainty caused by a federal court […]
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