The social costs of energy transitions

Even as leader after leader in New York exhorted each other last week to take action to address climate change, a steady drumbeat of news has also highlighted just how rapidly global energy systems are beginning to change — and how fast the disruptive social and economic consequences of energy transitions are beginning to grow. Facing a dramatic expansion of distributed renewable energy generation, including off-grid developments, utilities worldwide are fighting a pitched battle to halt losses of revenues and customers. New technologies of hydraulic fracturing are quickly transforming the geography of global oil markets — and soon perhaps global natural gas markets, if the U.S. begins exports — in ways unexpected even a decade ago. Those same technologies have dramatically reduced natural gas prices in the United States. These dynamics, along with new regulations and the growth in renewable energy generation in both the U.S. and Europe, are driving utilities on both sides of the Atlantic to retire coal-fired power plants.

The results of these shifts are not just headaches for utility managers and investors. Across the world — and in many places in the United States — communities are facing up to the very real, often severe and long-term consequences of changes in energy systems. While some of these consequences can be beneficial — where new energy supplies generate new income and jobs — many are not.

{mosads}For decades, the United States has pursued energy policy as if only two things matter: technology and jobs. In doing so, we have largely ignored the dramatic social costs that accompany energy systems. Recently published research confirms that energy transitions have significant social ramifications. Americans are well aware of the extent to which energy permeates our politics and society. Automobiles have shaped our culture and our cities. We invented modern electric utilities and nuclear power plants. Many of our nation’s leaders have had ties to the oil industry. So it shouldn’t come as a big surprise that changes in energy systems create waves that ripple outwards throughout society.

As the nation has begun to shift away from coal as a source of electricity, the small, rural communities that typically harbor large coal-fired power plants and coal mines have begun to feel the impact. Recognizing that fact, last month Reps. David McKinley (R-W.Va.) and Peter Welch (D-Vt.) introduced the Healthy Employee Loss Prevention (HELP) Act to provide assistance to workers impacted by a downturn in the coal industry through retraining, job searches and relocation. I have no idea if the proposed legislation has any hope of passing — nor do I know if it’s the right way to help these individuals and their communities. What is clear is that the bill and the events that lay behind it are a harbinger of much bigger things to come.

The problem also confronts communities impacted by new energy production. A 2013 study in North Dakota showed the state’s stretched social services agencies struggling to address rising rates of crime, domestic violence and sexual assault due to high levels of immigration for the oil boom. While areas with surging energy production also benefit economically from energy production, the benefits and costs are often unevenly distributed across groups within these communities. Historically, the siting and closing of energy projects has split communities, as some benefit while others bear the social and environmental risks that accompany energy production. That pattern continues today around many technologies, from fracking projects and refineries to new solar and wind facilities, and in many cases social unrest around energy systems seems to be growing.

Perhaps the most significant foreshadowing of the social impacts of future energy systems change was made visible by the 2010 Deepwater Horizon oil spill. The spill itself created social dislocations, especially in communities dependent on tourism or industries impacted by the spill, like shrimping and fisheries. But the biggest disruptions flowed from the moratorium on new drilling in the Gulf of Mexico that followed in the spill’s wake. For six months, that moratorium showed Gulf communities what life would be like in the wake of an oil downturn — and the picture was ugly. Oil production permeates the Gulf Coast region, economically, socially, culturally and politically. The post-fossil-fuel world envisioned by those who believe climate change is a dire threat — and I count myself in that group — seems likely to reverse the job surge America is now experiencing from increased oil production, and much of the Gulf Coast may well look like Detroit did at the height of the financial crisis, unless we act ahead of time to rethink social and economic strategies for these communities.

U.S. energy policy seems to be going in two directions right now. Let’s call the first the “high carbon” path. North America has enough oil and gas to become the Saudi Arabia of the mid- to late 21st-century. Let’s call the second the “low carbon” path. In that, oil and gas would disappear entirely from the energy mix. I personally favor the latter, but whichever we choose, the downside social consequences will be enormous.

The United States needs a national strategy to plan for — and build the capacity to address — the social and economic dislocations associated with future changes in energy systems. Questions about large-scale future change seem to be the most difficult issues for democratic societies to confront ahead of time. They raise deeply troubling political issues that make politicians, companies and government agencies run for the hills. Particularly in America, with its data-driven culture, future challenges are difficult to predict with any certainty. Communities themselves are often reluctant or don’t have the power or knowledge to tackle the realities of futures over which they may appear to have little control and that require facing up to the possibility of long-term decline.

It’s important to help people who have been hard hit by events beyond their control. In that sense, the HELP Act is a good impulse. But it doesn’t go nearly far enough. As another recent study highlighted, diverse strategies exist that can improve social planning for energy transitions. Strengthening the capacity of communities to evaluate in a forward-looking way what the coming energy transitions may mean locally and to take action both to control their energy futures and to manage the associated social dislocations is also a critical task for our nation’s energy leaders.

Miller is associate director of the Consortium for Science, Policy, and Outcomes (CSPO) and associate professor in the School of Politics and Global Studies at Arizona State University.