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For Greater Job Growth, Invest in Clean Energy, Not U.S. Coal Exports

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Exporters hope to capitalize on the low cost of producing coal in Wyoming, pictured, but that won't create jobs here. Photo courtesy of U.S. Bureau of Land Management.

A debate is in full-swing in northwest Washington state about the energy, economic, and environmental future of the region, where coal export terminals have been proposed to send U.S., and potentially Canadian coal to Asia.

A plan to build a sprawling $665 million coal terminal northwest of Bellingham,  Washington has been the focal point of this debate. (See: “Seeking a Pacific Northwest Gateway for U.S. Coal“) On one side is the assessment of the jobs associated with the coal terminal.  Our analysis indicates, however, that a far more beneficial use of this money would be to fund energy-efficiency and renewable-energy projects. Per dollar invested, efficiency and renewables generate many more jobs than fossil fuels.

Modern coal terminals are highly mechanized facilities, with towering, ten-story cranes pivoting massive arms above coal storage piles 60 feet high. At the ends of these arms, huge rotary shovels bigger than a house dig up the dusty coal and deposit it onto conveyor belts that snake away to bulk carriers three to four football fields long. Few workers are needed to operate these gargantuan “stacker/reclaimers.”

As estimated in official project documents, the Gateway Pacific Terminal would support only 257 steady jobs, including office workers, at full build-out. That’s just one new job for every $2.6 million invested, assuming the terminal can indeed be built for its advertised price. If you include “induced jobs” that may be added in maritime and railroad industries, the total increases to 430. But extra expenditures would occur in these areas—say for necessary railroad upgrades— so figure about one new job created per $2 million spent.

According to data compiled by the Renewable and Appropriate Energy Laboratory  at the University of California, Berkeley (directed by the authors of this blog), investing the same $665 million in energy efficiency or renewables would create twice as many jobs at minimum. In solar manufacturing, for example, figure several hundred more jobs than at the coal terminal. For solar-installation and energy-efficiency companies, add at least another thousand.  The model is available as a downloadable spreadsheet at:

SolarCity, for example, is a California-based company developing solar installations throughout western states for customers large and small, including Google, Intel and Wal-Mart. With about $200 million in venture financing plus nearly another $1.6 billion in project-specific investments, the company has added more than 2,000 employees since 2006 — over one new job per million dollars — and induced many more jobs among its subcontractors.

The savings in energy costs that steadily accrue after these clean-energy projects are completed can be recycled through organizations to create even more jobs, setting up a multiplier effect that stimulates greater prosperity. Such investments also lessen dependence on fickle foreign sources of fossil fuels, whose costs can skyrocket if supply lines are threatened.

Then, too, these are jobs in construction, maintenance, building supplies and finance that will be difficult, if not impossible, to ship overseas. The wages and salaries earned will largely be spent in local communities, enhancing local economies.

The actual, unspoken, reason coal-terminal advocates are touting this ill-considered project despite growing public opposition is the profits, not jobs, it will create. By selling U.S. coal to Asia at $120 a ton,coal that costs only $10 a ton to strip mine in highly mechanized fashion, with dynamite and heavy machinery, in Wyoming, lucrative profits can be made all along the global supply chain. And the electrical power generated using this coal will help Asian firms continue undercutting U.S. manufacturers, causing further job losses here at home.

The majority of terminal profits would leave Washington and flow to Wall Street, not Main Street. The pittance paid locally in taxes — less than 34 cents per ton, according to official estimates — will be negligible compared to the public health and environmental impacts Washington citizens and ecosystems will be forced to bear.

The much-ballyhooed coal-terminal jobs are a fool’s bargain that should be rejected on economic grounds alone, never mind the obvious impacts. It’s time we stopped feeding such fossil dinosaurs and started investing seriously in U.S. innovators, workers and companies that can help realize our low-carbon future.

Daniel M. Kammen is the Distinguished Professor of Energy at the University of California, Berkeley, where he founded and directs the Renewable and Appropriate Energy Laboratory

This blog is co-authored with Michael Riordan, who writes about science, technology and public policy from his home on Orcas Island; he is coauthor of The Solar Home Book.