Energy transition brings challenges – and opportunities – for Texas’ workforce

Experts say many oil and gas workers have transferable skills for new energy jobs.

By Alexandra Hart

On April 22, 2024

My earliest concept of what it meant to have a job was to work in the energy industry. It’s what my dad did: For more than 40 years, his entire career, he worked for Amoco – what would eventually become a part of BP – just like his father before him.

It was a common path in my hometown in East Texas. The region is arguably the birthplace of the oil industry in Texas, and home to one of the most prolific oilfields in the U.S., at least until the advent of fracking and the shale revolution.

Reminders of the oil boom and its place in our economy are everywhere in the Piney Woods, like the pumpjack next to my high school that would come screeching to life just before 8 a.m. every day. Or the oil derricks that dot the banks of the Sabine near State Highway 42, rising like phantoms above the river’s muddy water.

These relics always gave me a feeling of pride: a sense of place, something anchoring me to my home and the work my father did to provide for our family. But with it too came a sense of anxiety about what it meant for the future of our planet, which we’d already caused so much damage to by burning fossil fuels.

Oil has, for better or worse, been perhaps the most transformative industry in the state, economically speaking.

“Energy just created a massive influx of persons of all different types of skill levels to this region,” said Juliet Stipeche, executive director of the Gulf Coast Workforce Board. “A person could come to Houston and actually just transform their life. It was dramatic economic and social mobility in this energy industry that was a massive catalyst for the influx of population into this region.”

Energy jobs were and continue to be a source of upward mobility for so many, even those without higher education.

And Texas continues to lead in crude oil and natural gas production. According to the U.S. Energy Information Agency, Texas accounted for 42% of the nation’s crude oil production and 27% of its marketed natural gas production in 2022. The Texas Oil & Gas Association, an industry trade association, says taxes and royalties from oil and gas production topped $26 billion in fiscal year 2023 – the highest in state history.

But the way we produce energy is changing, especially as the urgency of climate change drives the need for the “energy transition” – a move away from fossil fuels to more environmentally friendly alternatives.

“Globally, there’s been an evident trend where clean energy jobs related to solar, wind, bioenergy, hydro storage, they all tend to be steadily rising. And at the same time, we’ve seen the fossil fuel base following an inverse trend,” said Sergio Castellanos, an assistant professor in the University of Texas at Austin’s Civil, Architectural and Environmental Engineering Department. He also runs the RESET Lab, which looks at how to make the energy transition more sustainable and equitable.

“As we consider this in Texas, about 30% of people in the state work in this sector,” he said. “So obviously there are jobs and tax revenues for counties that will have to transition. And that’s going to be a big issue for them.”

Impact on jobs

There’s a lot of concern about what reducing oil dependence will mean for jobs and workers in Texas – and that’s fair. On an individual level, it’s hard to care about the climate if your job is being phased out and you can’t put food on the table.

But it doesn’t have to be a wash. A report from UT Austin’s Energy Institute finds that decarbonization can be a net positive for the Texas economy. It lays out several scenarios where net zero emissions can be achieved while spurring economic growth.

One of the report’s big findings is that hydrogen presents a major opportunity for job growth.

“It certainly has been very prominent here in Texas, especially as it received a $1.2 billion investment from the Department of Energy,” Castellanos said. “And that was done to the High Velocity Consortium, which groups companies, academia and organizations to just spur and support a hydrogen economy in state.”

Hydrogen power has been gaining steam in Texas thanks in part to this investment through the Inflation Reduction Act. The hydrogen power industry also has a lot of transferable skills for those who previously worked in the oil and gas – plus the infrastructure to support it – according to Stipeche.

“The hydrogen hubs need to be near water,” she said. “And so you look at some older refineries that might close in a transitional opportunity to build a hydrogen hub in its place.”

Another industry with promise, especially for those coming from oil and gas? Geothermal. Jason Assir, a former industry consultant, now runs EnergyGigs.com, a platform for energy jobs.

“I had a candidate tell me, ‘I kind of want to get into the new energies but don’t really know how to use my background. But geothermal seems like it make a lot of sense. It’s drilling. It’s using all the skills that, you know, that I learned well when I was in upstream oil and gas,’” Assir said.

Overcoming challenges

While this all sounds great, there are a lot of hurdles to overcome. Castellanos said loss of tax revenue from oil and gas is a major one. Also, some workers moving from oil and gas may find themselves taking a pay cut, at least initially.

“A huge portion of the people work in oil and gas,” he said. “But then as you look at the paychecks that they might be receiving, if they transition from oil and gas to construction, operation, we’re talking about, you know, a third of what they usually earn. That will be their future paycheck.”

There’s also concern of companies taking tax incentives to build in a location with the promise of bringing jobs to the local economy, but not following through.

“When you look closely at the jobs there, they don’t have the social mobility that they would have,” Castellanos said. “They import people from other places to fill in the well-paid vacancies. And in fact, that just meets the goal on paper, but it really doesn’t advance the purpose in the communities in the first place.”

Stipeche says robust training will be key to moving people from the oil industry into these new jobs. That means partnerships with local colleges to train the next generation of workers, as well as making sure people are aware of the opportunities in the industry – especially those who may not have considered it otherwise.

“We will continue to look at families and communities and say, ‘How can we upskill you into these opportunities in areas that will desire the skills and expertise in renewable energy and sustainable development?’” she said. “That can help us further develop the workforce and other types of economic opportunities.”

We may also see changes in how people find jobs, and how long they stay in them. Spending decades – or your entire career – at the same company is no longer the norm. People are more mobile, Assir said, and workers may be moving between different areas of the industry more often.

“Like you’re probably going to work at like five, 10, maybe even 15 places over the course of your life,” Assir said. “And so what does that look like? I think there are a lot of people in the oil and gas space that have been through too many boom and bust cycles and are looking to get into something where they can chart their own course a little bit more.”

While fossil fuels remain a huge part of our economy, Texas has already made big strides in moving toward green energy. Texas leads the nation in wind power generation, and solar power production is also on the rise. Plus, hydrogen power may be the next frontier in Texas energy production – and jobs.

“The energy landscape as a whole is changing very rapidly,” Castellanos said. “And so I think that as we see this surge of solar wind storage coming into the grid, that gives a glimpse of hope that the transition could happen.”

Maybe today’s youth will be able to see the wind turbines and hydrogen facilities and solar farms their parents helped build and operate with the same sense of pride and nostalgia I have seeing a herd of oil horses rocking back and forth in an East Texas pasture. That is, minus the climate anxiety.

This piece was republished from Texas Standard.