Matching geographies and job skills in the energy transition

Abstract

The changing US energy system raises concerns of job losses among fossil fuel workers. Since these employment impacts vary considerably across the US, policies must be tailored to local contexts. We develop an analytical approach to help policymakers understand the localized opportunities and challenges that energy workers may face. We first estimate the exposure of local labor markets to job displacement in fossil fuel extraction, transportation, processing, and electricity industries. We then assess the extent to which the skill sets of fossil energy workers match similarly-paying jobs with high growth in their local labor markets. We document substantial differences across local labor markets in terms of fossil fuel workforce demographics, their current job skills, and how well these skills align with those for in-demand jobs over the coming decade. We find that other than most technical skills, skills important for fossil fuel jobs typically differ from those necessary for fast-growing occupations with similar levels of pay, many of which require extensive service-oriented and management skills. Our methodology and associated analytical tools can be readily used to provide locally tailored information about skills mismatches between the existing fossil energy workforce and in-demand sectors, suggesting areas where workforce development may bear the most fruit.