Cancelling Keystone heralds end of oil age

The demise of the Keystone XL pipeline heralds the beginning of the end for the oil age in the US and Canada. This is a necessary evolution, but it raises many challenges. Workers displaced by the shift away from oil will need new jobs, and energy industry clusters like Houston and Alberta will need new activities to sustain their economies.
It would be easy to see the cancellation of the Keystone XL as merely a flamboyant political gesture by a new president intent on demonstrating loyalty to the environmental and Native American rights movements
that have passionately opposed it. The pipeline project simply didn’t make economic sense in the modern world. Though Canadians have gotten
better at extracting oil from the tar sands of Alberta, those projects still
require oil prices of well over $40 a barrel to be profitable. Oil prices are now just over $50, having fallen by about half since the early 2010s. That’s a slim margin.
But the real death knell is society’s determination to shift away from fossil fuels. Even Americans finally take climate change seriously. Biden is converting the US government vehicle fleet to electrics, and General Motors has announced plans to sell only zero-emission models by 2035. Tesla
Motors is the most valuable car company on the planet, while Exxon Mobil has been kicked off the Dow Jones Industrial Average. The Keystone XL is far from the only oil pipeline project to be cancelled recently.
The world is changing fast. Petroleum will still be used as a chemical feedstock, but the end of its role in transportation means the industry will shrink substantially.
And that raises the question of what to do with the people and places who will be left behind when oil becomes obsolete as a fuel. The cancellation of Keystone XL is already beginning to cost jobs, and many more losses could be on the way. Oil and gas extraction itself employs an estimated 145,000 Americans. A 2015 study by PricewaterhouseCoopers calculated that the entire oil and gas industry “supports” over 10 million jobs. So the actual number of Americans forced to find new employment due to the end of fossil fuels is anybody’s guess, but it’s bound to be large.
Workers in oil and gas-related industries are naturally going to be asking what jobs they can get next. The usual answer is that they can get jobs in renewable energy industries. Indeed, jobs in solar alone have now reached 245,000, far more than oil and gas extraction, even though solar was only about 2% of US electricity in 2019. Wind employs over 100,000, and some estimates claim the renewables sector as a whole supports over 800,000 jobs. As renewables climb from their current modest share of US energy production, this number will undoubtedly be even higher.
Solar and wind, it turns out, are very labour-intensive to set up. And building wind turbines and solar plants is basically construction work — roughly the same kind of thing that employs lots of people in the fossil fuel industry.
Of course, it’s not as easy as just taking oil workers and slotting them directly into solar jobs. Many will do other things, and many solar workers will come from non-oil jobs. The labour market is a highly complex machine with millions of moving parts.
The question is how government policy can grease the gears of that machine. Solar and wind jobs — and other new jobs — are mostly not going to be in the same places as oil jobs, so lots of workers will have to move around the country for work.
—Bloomberg