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Jun 16, 2023, 10:28am EDT
net zero

The energy transition has a labor problem

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The Facts

Demand and government funding for renewables, electric-vehicle batteries, and other clean energy technologies are surging. But companies driving the energy transition are running into a new impediment to scaling up: Finding enough workers.

With U.S. unemployment near its lowest level in 70 years, the country’s labor pool is already stretched thin. But the climate workforce is especially tight. An analysis of LinkedIn job-posting data this week found that positions labeled “green” are the fastest-growing hiring category, and that demand for those openings is exceeding the supply of candidates with relevant skills by a widening margin.

The Inflation Reduction Act is projected to create an additional 1.5 million wind and solar jobs by 2035, meaning the size of those workforces needs to roughly triple in the next decade. Hiring is already a major challenge for 89% of U.S. solar companies, a survey last year found. Battery factories and mineral mines are also struggling to hire sufficient skilled workers.

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“The labor market is extremely competitive,” Jon Evans, CEO of the mining company Lithium Americas, told Semafor.

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Tim’s view

The workforce shortage is especially dire in the mining sector, as the U.S. scrambles to shore up supplies of lithium and other minerals for batteries and renewables hardware. Easing the bottleneck starts in college with training workers, so there’s no quick fix, and no time to waste in readying the next generation of mineral engineers.

By 2030, half of the current U.S. mining workforce — about 221,000 workers — is expected to retire and will need to be replaced, not to mention the workers needed for new lithium mines in Nevada and elsewhere. Yet the country’s 14 university-level mining engineering programs saw their combined body of graduates drop by half in the last five years, to a paltry 172 graduates this year, said Steve Enders, a professor of mining engineering at the Colorado School of Mines.

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“There’s clearly a war for talent at all levels,” he said.

The problem, he said, is that most incoming college students associate “mining” with coal and see it more as a contribution to climate change than part of the solution to it. Young engineering students also see mining as low-tech compared to computer science and other engineering fields when in fact, Enders said, the mining jobs that are most in demand are increasingly high-tech and focused on automation and machine learning.

A talent war is good for the few graduates that are looking for mining careers: Enders said most have at least four job offers by their final semester and a starting salary above $75,000. But that competition is also a factor driving up the prices of lithium, copper, and other minerals.

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Know More

One solution, Enders said, is for the federal government to fund high-profile mining scholarships, an aim of a bill proposed in March by Sens. John Barrasso (R-Wyo.) and Joe Manchin (D-W.V.). And many of the clean energy manufacturing tax credits in the IRA increase when employers hire people who have been through energy industry apprenticeship programs, participation in which has doubled in the last eight years. Executives of under-development mines and factories are also building strategic partnerships with nearby institutions to proactively build up a labor pool.

Lithium Americas is paying for job training for members of the Paiute and Shoshone tribes nearby its future mine in Nevada. Freyr, a Norwegian battery manufacturer that is opening a gigafactory in Georgia, is helping a nearby technical college expand its campuses “to support the growing talent needs in the area,” a spokesperson said. And Ascend Elements, a battery recycler that is also opening a gigafactory in Georgia, has been “very successful” recruiting from local military bases, a spokesperson said.

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Quotable

Fossil fuel companies are facing their own hiring challenges because young people view them as a part of the climate problem, Fatih Birol, executive director of the International Energy Agency, told Semafor in an interview this week: “I was talking with the CEO of an oil company recently, and he was telling me that they have difficulties getting new engineers, new students finishing university to apply for jobs in their company because of this reputational risk issue.”

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Room for Disagreement

In some cases, the deficit of workers may be the result of inadequate compensation, rather than a shortage of hands. In spite of the IRA’s preferential tax benefits for companies that adhere to high labor standards, many clean energy project developers are still reluctant to use unionized electricians and other construction workers, and will need to offer more competitive compensation to staff up, said Jason Shedlock, president of the Maine State Building and Construction Trades Council, a group of unions: “Developers will still try to get as much as they can for as little as they can. But they’re finding that workers across the country aren’t buying it anymore. They can’t find workers for the wages they’re willing to offer.”

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The View From China

As with many aspects of the energy transition, China is in a league of its own on worker training, with an estimated 70,000 undergraduates currently enrolled in mining engineering programs in the country compared to just 600 in the U.S., Enders said.

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Notable

  • The demands of the energy transition point to a few key focal areas for future jobs training efforts, Nathaniel Bullard writes for Bloomberg. One is performing energy efficiency upgrades, another is civil engineering with a focus on building in volatile environments, and a third is bureaucratic: Building out the squads of lawyers and surveyors needed to push projects through the byzantine permitting process.
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