President Biden promised during the campaign to create “millions of good-paying jobs,” but his administration already appears to be moving in the wrong direction.
Tens of thousands of oil and gas jobs were thrown into jeopardy by Mr. Biden’s first-day order canceling the Keystone XL pipeline permit and the Interior Department’s 60-day freeze on agency approvals for oil and gas leases on federal lands, fueling an outcry from unions, industry advocates and Republicans.
“As the nation recovers from the COVID-19 pandemic, President Biden is handing out pink slips on Day One,” said Sen. John Barrasso, Wyoming Republican.
Indeed, the layoffs already have begun. Calgary-based TC Energy, developer of the KXL pipeline, has let go 1,000 U.S. and Canadian workers as a direct result of Mr. Biden’s decision to cancel the 2017 cross-border permit for the 1,179-mile pipeline extension over environmental and climate concerns.
“A majority of the 1,000 are unionized workers who have been constructing on both sides of the border,” TC Energy spokesperson Terry Cunha told WorldOil.
The specter of mass layoffs comes in contrast with Mr. Biden’s political image as a working-class hero from Scranton, Pennsylvania, although anyone who listened to his 2020 campaign promises, including his vow to ban hydraulic fracturing on federal lands, could foresee that losses in oil and gas jobs were likely.
“I think people are coming around to the fact that lunch-bucket Joe’s sentiments may be with the working class, but he’s got a huge environmental constituency to take care of,” said Western Energy Alliance President Kathleen Sgamma.
She cited a state-sponsored University of Wyoming study released last month that found Mr. Biden’s promised fracking ban on federal lands would result in 72,000 fewer Western jobs over each year of his four-year term.
“Joe Biden talks a good game, but does he actually deliver for the working class?” Ms. Sgamma said. “I would argue that’s one of the reasons [former President Donald] Trump won in the first place, the fact that the Obama-Biden administration was so oriented toward the environmental constituency, which is directly at odds with working-class people.”
Even Mr. Biden’s labor allies blasted the Day One moves. The Laborers International Union of North America, which endorsed Mr. Biden in 2020, called the KXL decision “insulting and disappointing to the thousands of hard-working LIUNA members who will lose good-paying, middle class family-supporting jobs.”
Pushing back were environmentalists, who accused the industry of exaggerating the economic impact of the Biden orders.
“Oil drillers are sitting on thousands of approved drilling permits and decades worth of unused oil leases,” Aaron Weiss, deputy director of the Center for Western Priorities, said in an email. “The ‘Chicken Little’ routine from folks like the Western Energy alliance isn’t fooling anyone.”
White House press secretary Jen Psaki indicated that the administration’s renewable energy push would make up for any job losses. The Biden campaign promised to create “10 million clean energy jobs” in response to the “climate emergency.”
“His record shows the American people that he’s committed to clean-energy jobs — to jobs that are not only good, high-paying jobs, union jobs, but ones that are also good for our environment,” Ms. Psaki said. “He thinks it’s possible to do both.”
Union workers out of work
Getting there could be economically painful, however, if the first step hobbles the U.S. oil and gas industry.
In New Mexico, where oil and gas development has boomed, the order suspending agency lease approvals has put at risk “more than 60,000 jobs and $800 million in support for our public schools, first responders, and health care services,” said Ryan Flynn, president of the New Mexico Oil & Gas Association.
TC Energy said in October that the pipeline’s construction was “expected to employ more than 11,000 Americans in 2021, creating more than $1.6 billion in gross wages.”
That includes hundreds of jobs in Wisconsin, notably construction positions that paid $30 to $40 per hour and up to $90,000 per year, according to Republican lawmakers who gathered Friday for a press conference at Michels Corp. in Franksville, as shown on WTMJ-TV in Milwaukee.
“On Joe Biden’s first day in office, he killed thousands of American jobs,” said Rep. Bryan Steil, Wisconsin Republican. “He killed hundreds of Wisconsin jobs. On Joe Biden’s first day in office, hundreds of Wisconsin workers got laid off from their job building private-sector infrastructure. Joe Biden needs to reconsider his decision immediately.”
Mark McManus, president of the United Association of Union Plumbers and Pipefitters, which also endorsed Mr. Biden, said in a statement that “the Biden Administration has now put thousands of union workers out of work.”
“For the average American family, it means energy costs will go up and communities will no longer see the local investments that come with pipeline construction,” Mr. McManus said.
Added JunkScience founder and climate skeptic Steve Milloy, “I don’t see how he can credibly call himself blue-collar Joe when in his first few days, he’s killed all these blue-collar jobs.”
Also raising jobs concerns are Mr. Biden’s interest in raising the federal minimum wage to $15 per hour. His administration said plans are in the works to issue in the first 100 days an executive order requiring federal contractors to pay their employees at least $15 per hour, more than doubling the current $7.25 hourly federal minimum wage.
A 2019 Congressional Budget Office report found that raising the federal minimum wage to $15 per hour would result in 1.3 million people being jobless who would otherwise be employed in 2025.
Environmentalists, meanwhile, cheered the Biden orders as a good start. The Center for Western Priorities urged the administration to enact a “long-term pause on future oil leases” while creating a program that accounts for “the climate impacts of oil and gas drilling.”
“It’s both appropriate and necessary to take stock of the damage the Trump administration caused to our public lands,” Mr. Weiss said. “The Biden administration must use that time to take significant steps to address the climate crisis, which is the real threat to American jobs and our economy.”
Industry supporters argued that foreign oil producers will be the biggest beneficiaries of the Biden crackdown.
Dan Naatz, senior vice president of government relations and political affairs for the Independent Petroleum Association of America, called the effort to restrict energy development on federal lands “a misguided proposal that will decimate jobs and economic development” in U.S. communities while boosting foreign competitors.
“All a leasing ban will do is shift production to Saudi Arabia and Russia, which have far less-stringent environmental controls than American producers,” Mr. Naatz said in a statement.