Clean Energy - How Will This Industry Impact Job Growth

With an unemployment rate of 8.3 percent in July, 2012 and an underemployment rate over 16 percent, it seems self-evident that the Federal government should pursue every conceivable opportunity to stimulate job creation. One sector that shows great promise in creating jobs is the clean energy field.

Clean energy and other environmentally-friendly industries have performed well in adding jobs in the last several years. According to the U.S. Bureau of Labor Statistics, there were 3.1 million jobs in the Green Goods and Services field in 2010. These jobs constituted 2.4 percent of all employment, with 2.3 million private and 860,300 public sector positions.

The Bureau numbers don’t break down the green jobs by whether they are new or existing positions. However, there is evidence that the green sector does stimulate job growth. The American Recovery and Reinvestment Act of 2009 provided approximately $7 billion in funds to the green energy industry through three programs. The Department of Energy loan guarantee program along with a manufacturing tax credit and cash grant program generated $12 billion in private funding. The Recovery funds spent for green energy projects were responsible for 13 percent of all jobs created even though only one percent of the Recovery Act budget was spent on green projects.

Solar energy has seen significant employment growth in the last two years. According to the National Solar Jobs Census of 2011, 100,000 new jobs were created in the U.S. The Census predicted 24 percent employment growth in 2012.

Clean energy facilities create both short-term construction jobs and a smaller number of permanent jobs. Building any type of energy plant is labor intensive. Nevada’s first wind power project near Ely created 240 construction jobs. The facility went online on August 8, 2012 and will have 13 permanent employees. Components were built in Kansas, Florida and Iowa. Global corporation Siemens Wind Power Americas has invested $100 million in production facilities in the U.S. to manufacture wind turbine parts.

Whether job opportunities in clean energy continue to grow at a rapid pace will be determined largely by national politics. President Obama has articulated his support for renewable energy since the campaign of 2008. Challenger Mitt Romney favors allowing renewable energy incentives to expire at the end of 2012.

The potential expiration of the credits has already led turbine manufacturer Gamesa to announce layoffs at their domestic plants in Pennsylvania this fall. The company’s two plants could furlough up to 165 workers. Vesta, the largest global turbine manufacturer, has also warned that up to 1,600 jobs will be lost in the U.S. if the credit is not extended.

The pending expiration of the credits could stifle wind and other clean energy development until the issue is resolved. Although the Senate has added a production tax credit back into their budget version, it is unlikely the issue will be resolved before November’s election.

The addition of natural gas into the figures creates a significant boost in the prospects for clean energy employment. While there is considerable debate about whether natural gas qualifies as clean energy, it does create only about half the carbon dioxide as coal-fired electricity plants and about one third the nitrogen oxide.

With huge natural gas finds in the Marcellus and Bakken fields, job growth in those regions is outpacing housing and other resources. The Marcellus fields have added 18,000 jobs to Pennsylvania since 2008. The natural gas industry as a whole has added 238,000 positions in the same period. Those figures don’t take into account all the secondary jobs created in trucking, retail, construction and other industries that service the wells and their employees.

The Bakken region has an unemployment rate that ranges from one to three percent. It is common to find employment on the same day that a job seeker arrives in Williston or any of the other towns in the region. However, the Bakken fields currently produce mainly oil, so the employment boom there probably shouldn't be counted as contributing to clean energy job growth. Without adequate infrastructure for natural gas processing, much of the natural gas produced is being burned off. If facilities are built to process natural gas then some of the jobs might be considered green.

Although natural gas is a nonrenewable resource, if could be used as a transition fuel while renewable resources are developed. Developing natural gas as a fuel for vehicles and electricity generation would decrease American dependency on foreign oil. Cheap electricity created with natural gas may also stimulate a renewal of manufacturing in the U.S. However, it cannot take the place of developing sustainable energy sources like solar and wind power. The future depends on weaning the nation from carbon-based fuels.

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