The hold of one of California’s most influential unions on oil industry employment remains strong.
The Biden administration and California legislators have invested large sums of money into developing eco-friendly industries such as electric cars, hydrogen technology, and building electrification. However, a significant figure in state politics continues to support the interests of fossil fuel companies, which employ thousands of people in high-paying positions.
Joe Biden, the current president of the United States, has allocated funds towards clean energy initiatives in two large spending bills. These bills include tax incentives for projects that offer union wages and were intended to accelerate the shift from oil and gas industries. However, in California, a state known for its progressive climate policies and powerful labor unions, this transition has not occurred as planned.
According to Chris Hannan, the president of the State Building and Construction Trades Council of California, which has a membership of almost 500,000 individuals from various local unions specializing in fields such as pipefitting and electrical work, we are confident that we will continue to operate within the oil and gas industry for the foreseeable future.
Unions’ longstanding — and well-founded — distrust of the renewable energy industry as a reliable source of labor-friendly jobs is slowing the “just transition” that Biden, Gov. Gavin Newsom and Democratic leaders around the country have pushed.
According to a legislator representing both a union and oil-rich district in California, the reluctance of unions to give up jobs in the fossil fuel industry is hindering Democrats’ efforts to achieve ambitious climate goals. This is happening as federal officials rush to allocate clean energy funding before the 2024 election, while California politicians tighten regulations on the fossil fuel sector.
While the union embrace of fossil fuels is unique to California — one of the few blue states with significant oil production — the struggle highlights a larger question over how states can quickly build massive amounts of clean energy infrastructure without undercutting labor.
State Senator Anna Caballero (D-Salinas), who serves the Central Valley, expressed the urgency of the current situation, stating that it is a crucial turning point. She emphasized that the consequences of making incorrect choices will be far-reaching and detrimental, and that reversing the damage will not be a simple task.
Major corporations such as Chevron have implemented project labor agreements to ensure that union workers are hired and that there are predetermined standards for wages, benefits, hours, and other labor considerations before work begins on a project. These agreements are not as prevalent in the renewable energy industry due to companies being hesitant to collaborate with labor unions.
Despite a gradual decrease in oil production in California since the mid-1980s, the state remains the seventh biggest producer of crude oil in the country and holds the third highest capacity for oil refining, according to the U.S. Energy Information Administration.
The partnership between the Trades and the oil and gas industry is crucial as the industry’s political power in Sacramento has decreased in recent times.
State Senator Henry Stern (D-Sherman Oaks) stated that some aspects of the Trades are highly affected by the primary industries they serve. He further explained that when a company like Chevron raises concerns, it is crucial to pay close attention due to the potential impact on tens of thousands of jobs.
Last year, the Trades and the oil industry opposed a bill that aimed to establish a protective area around oil and gas wells to protect sensitive areas such as residences and schools. The bill was approved, but its enactment has been postponed due to the financial backing of oil companies for a referendum that will determine its fate on the November 2024 ballot.
The labor organization also objected to a proposed law in the California State Assembly this autumn that mandates major corporations to disclose their supply chain’s greenhouse gas emissions. The legislation was approved, but the union’s resistance, based on concerns that it would raise expenses for local businesses and hinder their competitiveness, held more influence with the state’s growing progressive Democratic supermajority than the opposition from oil companies.
Hannan stated that our goal should be to improve things, rather than creating unnecessary difficulties. He emphasized the importance of businesses in California and the need for available job opportunities.
The Trade members do not automatically reject the idea of green employment. Offshore wind energy has the potential to be a positive aspect: The previous president, Andrew Meredith, recently joined RWE Energy, a developer of offshore wind projects, as the director of labor relations.
Meredith stated that as we lose certain parts of the energy industry, there will be new technologies emerging, leading to a seamless transition.
The United Steelworkers union, whose members work in oil refineries across the state, has given their support to a 12-year plan created by economists from the University of Massachusetts Amherst. This plan suggests that California should allocate $470 million per year to assist workers who have lost their jobs in the fossil fuel industry. In October, USW joined a coalition of labor unions, including the United Auto Workers, Service Employees International Union, and American Federation of State, County and Municipal Employees, to release a list of policy priorities. These priorities include providing displaced workers with replacement wages, healthcare coverage, opportunities for retraining, and assistance with relocation.
However, the high volume of jobs needed presents a challenge. The Trades has not joined the labor coalition and has opposed suggestions that set a deadline for the elimination of fossil fuels. They argue that there are not yet sufficient high-paying green energy job opportunities available for all their members.
According to the Energy Department, California currently employs approximately 112,000 individuals in the fossil fuel industry and 115,000 in the solar industry. A report commissioned by a union revealed that jobs in the fossil fuel sector pay an average of $30,000 more per year than those in solar, which is considered the highest paying clean energy field.
A study discovered that out of $32 billion allocated by the state for climate initiatives, only $13 billion is linked to workforce regulations.
He stated that moving forward without a plan or properly attending to the workers, community, and decarbonization process carries a significant amount of risk. Neglecting any of these aspects can lead to political issues.
The conflict between labor unions and renewable energy companies, who argue that hiring nonunion workers is more cost-effective, has created additional challenges. This issue is especially prevalent in the rooftop solar industry, and has even received backlash from environmental organizations.
Alex Jasset, director of the energy justice program at Physicians for Social Responsibility Los Angeles, stated that they aim to ensure that they have comprehended the lesson and are not exploiting new industries to diminish labor standards.
The divisions surrounding emerging technologies that are receiving significant subsidies are hindering progress. Environmental organizations are attempting to delay hydrogen and carbon capture ventures, claiming they will prolong the use of fossil fuels.
More and more legislators are recognizing the value of these advancements in building a positive relationship with labor unions and providing an alternative for workers in the fossil fuel industry. Hannan is a member of the ARCHES board, which is a hydrogen project funded by the federal government and focused on the Central Valley, where most of the state’s fossil fuel jobs are located.
Environmental groups have expressed criticism towards that particular project, arguing that it is diverting attention from the more pressing need to strengthen the state’s electric power capacity.
According to Jasset, there are hydrogen projects being implemented that may not actually have any positive impact on the climate and will end up being a significant drain on financial resources. While it is important to establish a partnership with labor, it is necessary to speak out against these projects as they do not align with the necessary transitions we need.
The opposition to Caballero, a moderate Democrat who has opposed certain progressive climate laws, was described as a reflexive response motivated by the oil industry’s investment in hydrogen.
She stated that there is a significant amount of federal funds, totaling billions of dollars, that can be utilized to help us progress. This would result in immediate employment opportunities for individuals.
However, this viewpoint is increasingly shared by Democrats who are typically supportive of environmental causes, as they aim to sway the Trades to their perspective.
According to Stern, there are missed opportunities in the debates over carbon removal and hydrogen, as he believes simply rejecting them is not the solution. He suggests using these resources, such as fields and refineries, for alternative purposes.