BlueGreen Alliance | WONK WEDNESDAY: Energy Transition – Fairness for Workers and Communities

WONK WEDNESDAY: Energy Transition – Fairness for Workers and Communities

May 26, 2021

The following post is authored by Katie Harris, BlueGreen Alliance Deputy Legislative Director. 

As we work to rebuild our economy we must prioritize equitable rebuilding and investments in those workers and communities most in need, including those impacted by changes in our nation’s energy system. America’s energy transition is well underway. But a transition that is fair for workers and communities isn’t something that will happen organically. Prioritizing and targeting federal resources to workers and communities in places impacted by this shift needs to be a deliberate choice, and it needs to be baked into our economic recovery. The American Jobs Plan (AJP) provides some of the investments needed to do just that.

Immediate economic recovery policies are now even more desperately needed as a result of COVID-19 and its health and economic impacts. Low-income communities, communities of color, and deindustrialized communities were already hurting before the pandemic, with lower wages, higher poverty, and disproportionate exposures to toxic pollution and climate threats. Targeting recovery efforts to these workers and communities is therefore more important than ever. We need a broad, holistic, and government-wide response that ensures fairness for energy workers and communities in a range of sectors, and supports our workers and communities in immediate economic recovery from the impacts of COVID-19, as well as in the long term.

The federal government response to economic recovery and energy transition must keep workers and communities whole, revitalize and diversify local economies, and address inequities while ensuring the retention and creation of—and accessible pathways into—good-paying, union jobs.

In addition to the release of the American Jobs Plan, the Biden administration has begun to lay the foundation for a comprehensive approach to energy transition with the creation of an Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, established in an executive order signed by President Biden on January 27th, 2021. This action is consistent—in scale and ambition—with the kind of whole-of-government approach to energy transition recommended in the BlueGreen Alliance’s National Energy Transition Policy Framework. However, executive action by itself will not be enough. Congressional action, through authorizations and appropriations, will be necessary to target resources to achieve a fair and equitable energy transition.

The American Jobs Plan

President Biden’s American Jobs Plan includes several key investments targeted to communities in transition.  These include:

  • $16 billion for plugging oil and gas wells, restoring and reclaiming abandoned coal and hardrock mines, and plugging leaky pipelines;
  • $5 billion for remediation of Brownfield and Superfund sites;
  • $40 billion for a new dislocated workers program;
  • Increased funding for critical agencies such as the Appalachian Regional Commission (ARC) and Economic Development Administration to target economic development opportunities in distressed communities; and
  • Prioritizing and driving investments in the communities that need it the most, especially low-income communities, communities of color, deindustrialized communities, and communities impacted by energy transition.

While these proposals represent significant investments toward a fair and equitable energy transition, more assistance will be needed for dislocated workers and communities.  In several cases, the AJP simply does not mention, or is not specific enough about needed investments (Table 1).  Below I’ll highlight some key opportunities and gaps Congress should address as it works to craft the legislative version of the American Jobs Plan.

Energy transition investments needed & proposed in the American Jobs Plan

  Needed Investments American Jobs Plan
Additional funding for the Abandoned Mine Land Program $10 billion Unspecified portion of $16 billion
Provide funding to reclaim orphaned oil and gas wells $2-12 billion Unspecified portion of $16 billion
Black Lung Excise Tax Extend and reauthorize for 10 years No mention
Increase federal funding for the Economic Development Administration $1 billion Mentions the Public Works program, no mention of key programs like Assistance to Coal Communities
Increase funding to the Appalachian Regional Commission (ARC); ARC Power, ARC Broadband, ARC Workplace $1.5 billion – POWER

$300 million – Broadband

$300 million – Workplace

Mentions investments in the ARC POWER grant program
Increase federal funding for waste cleanup programs such as the U.S. Environmental Protection Agency’s (EPA Superfund and Brownfield programs $30-42 billion $5 billion
Provide targeted investment through Community Development Financial Institutions (CDFI) $30 billion No mention

Provide additional funding for Regional Innovation and Growth Clusters and for targeted lending to small businesses

$150 million $20B in 10 new regional innovation hubs and Community Revitalization Fund
Increase funding to United States Department of Agriculture (USDA) Rural Development’s rural business, community facilities, and energy programs; Rural Business – Cooperative Service $3.15 billion Major focus on rural business development – specific programs not mentioned
Increase funding to Rural Economic Development loans and grants $1 billion (loans)

$200 million (grants)

No mention
Temporarily support state and local revenue loss due to energy transition $15 billion No mention
Appropriations to Existing Programs (WIOA) National Dislocated Worker Grants $5.42 billion No mention
Fund the U.S. Department of Labor (DOL) for an Energy Worker & Community Package; Wage replacement and Educational Benefits $47 billion -Wage replacement

$7.8 billion – Educational benefits

$40 billion in a new Dislocated Workers Program

The American Jobs Plan includes a much-needed investment of $16 billion for reclamation.  Not only does reclamation remediate the host of environmental and public health problems associated with abandoned mines and wells, but also frees up that land for new development opportunities in agriculture, manufacturing, recreational tourism, retail, and clean energy production. It also creates immediate job opportunities doing the reclamation itself. However, a recent report from the Ohio River Valley Institute (ORVI) estimates that $20.9 billion is needed just to address unreclaimed coal mines. It will cost a minimum of $1.4 billion to clean up known orphaned wells, and likely tens of billions of dollars to address abandoned hardrock mines. It is clear that additional reclamation funding will be needed.

One way to ensure additional reclamation funds are available is for Congress to include reauthorization of the Abandoned Mine Land (AML) program (H.R. 1734), and the RECLAIM Act (H.R. 1733/S.1455) in the American Jobs Plan. Passage of these two bills could create over 131,000 jobs over ten years. Congress should also direct additional funding towards reclamation using the Environmental Justice Legacy Pollution Clean Up Act as a guide. Soon to be introduced by U.S. Sen. Cory Booker (D-N.J.) and U.S. Rep. Donald McEachin (D-VA), this bill would direct $200 billion in funding to various programs to clean up pollution, including an additional $10 billion to the AML fund, $10 billion for Superfund sites, and $3 billion to cleanup Brownfield sites across the country.

Additional funding for Superfund and Brownfields will also have a positive impact on communities as hazardous sites are reclaimed. These contaminated sites, often former chemical plants, landfills, or manufacturing facilities, pose risks to the environment and human health. Redeveloping and reclaiming these sites can increase local tax revenues and residential property values, all while creating jobs and reducing pollution. The BlueGreen Alliance recommends investing $3 billion in Brownfields over 10 years, and $20 billion in Superfund over ten years. Many other groups have identified a similar need. Analyses show that making investments in Brownfields and Superfund would create anywhere from 26,000 to 100,000 jobs over ten years, depending on the level of investment.

The American Jobs Plan also calls for $40 billion dollars to be invested in a new dislocated worker program. The specifics of how this program should be structured and exactly what it should support are undefined. We believe this program should support workers impacted by energy transition, which would be a truly historic proposal. The United States does not have a support system for workers impacted by energy transition, but such a program will be needed for a truly fair and equitable transition. For this reason, the BlueGreen Alliance’s energy transition platform calls for a robust system of support for dislocated workers, including five years of wage and benefit replacement, and a recent report from the Union of Concerned Scientists (UCS) and the Utility Workers Union of America (UWUA) shows between $31 and 59 billion dollars would be needed to provide comprehensive wage replacement for dislocated coal workers.

Notably absent from the American Jobs Plan is the reauthorization of the Black Lung Excise Tax. A ten-year extension of this excise tax rate is needed to make sure the Black Lung Disability Trust Fund remains strong and solvent. The modest living stipend and medical benefits this tax provides to sick miners and their families is often their only source of income and health care. Unfortunately, these benefits are likely to remain critical for many more decades as rates of black lung disease in Appalachia are rising. Since 2000, rates have doubled nationwide, and 1 in 5 veteran coal miners in Central Appalachia now has this preventable and fatal disease. A May 2018 Government Accountability Office report estimated that Congress’ failure to reauthorize the excise tax at its current rate would cause the trust fund’s debt to balloon to over $15 billion over the next few decades, putting these benefits at stake. Congress must not fail to include this reauthorization in the legislative version of the American Jobs Plan.

Finally, the American Jobs Plan also includes a number of investments in broader economic development, infrastructure, and manufacturing that go hand-in-hand with a comprehensive energy transition strategy. President Biden’s plan also targets 40% of investments to disadvantaged communities—it’s crucial that Congress and the administration keeps and expands this commitment to ensure that a majority funding in the American Jobs Plan goes to environmental justice and energy transition communities. These investments can provide a much-needed jolt to local economies while delivering good jobs and public health and climate benefits to communities. All of these investments must go hand in hand with measures that ensure these jobs are quality jobs, strengthen domestic manufacturing, and create positive outcomes for the communities in which the investments are happening. Important provisions to ensure the jobs created by infrastructure investments are good jobs include:

  • Prioritizing hiring of dislocated workers;
  • Davis-Bacon prevailing wage provisions;
  • Local hire requirements;
  • Project labor agreements (PLAs) and community benefit agreements;
  • Buy America domestic content requirements; and
  • Hiring and procurement policies that benefit low-income communities, people of color, and women.

Additional investments will be needed

Even with the historic levels of investment included in the American Jobs Plan, more will be needed to ensure a fair and equitable transition. In order to fully support coal communities and workers, investments in the American Jobs Plan must be paired with smart policies and investments at the national, state, and local levels. This means ensuring guaranteed pensions and a bridge of wage support, healthcare, and retirement security for affected workers while they try to find new employment or approach retirement. It also means committing to massive economic investment in deindustrialized areas, including addressing any loss of tax base for affected communities. Additionally, it means ensuring that new jobs and industries created in these communities are high-quality, family-sustaining jobs and that workers have a seat at the table.

That’s why the BlueGreen Alliance released our National Energy Transition Framework – a roadmap to ensure that the transition is fair for workers and communities. The BlueGreen Alliance believes that many of the policies and investments needed to ensure a just and equitable transition will require both executive and legislative actions.  The platform includes seven pillars and appendix that detail the additional steps that Congress and the administration will need to take:

  • PIllar 1. Overarching Structural Recommendations: Establish a National Coordinating Office; Inter-Agency Committee composed of key government agencies; and multi-stakeholder advisory and oversight board tasked with guiding the federal government response to energy transition.
  • PIllar 2. Local Leadership and Support: Invest in bottom-up planning, local leaders, helping communities access federal resources, capacity building and technical assistance through the creation of community “hubs” that should align with–and leverage–existing federal efforts.
  • Pillar 3. Interagency Grant Program: Establish an interagency grant program to ensure coordination across all grantmaking agencies and other agencies and programs represented on the Inter-Agency Committee including the coordination of staff, in order to provide effectively aligned and targeted federal resources and services to impacted communities and workers.
  • Pillar 4. Economic Development: Support existing jobs and the growth of diverse economic sectors to create good jobs, contribute to stronger, more resilient communities, improved public health, restored ecosystems, and equitable opportunities for all people.
  • Pillar 5. Workforce: Provide a broad system of support for dislocated workers, ensure workers and communities can plan for transition in advance, and invest in wrap-around workforce development programs that include income support and other critical services that often prevent workers from completing training programs and obtaining the credentials they need for in-demand jobs.
  • Pillar 6. Reclamation: Reclaim and remediate sites to create jobs while restoring land and clean water, prioritizing hiring of local dislocated workers.
  • PIllar 7. Bankruptcy: Protect workers, taxpayers, communities, and the environment during bankruptcies by closing loopholes in Chapter 11 bankruptcy law.
  • Complementary Policy: Investments in infrastructure and manufacturing go hand-in-hand with a successful energy transition. This section is a non-exhaustive list of BlueGreen Alliance priorities that must be included in a comprehensive energy transition strategy.

Congress has the opportunity to make a real difference in communities by ensuring that investments in a fair, equitable energy transition are included in any economic recovery or infrastructure package passed this year. At the same time, the Biden administration must continue to pursue revitalization of energy transition communities through the Interagency Working Group on Coal and Power Plant Communities and elsewhere in the executive branch of the federal government. These investments will not only create immediate job opportunities when workers need it the most, they will also spur economic development, address legacy environmental pollution, and lay the foundation for long-term economic diversification and revitalization across the country.