Radical proposals aiming to shut down oil and gas production in California have long been accompanied by vague promises of a ‘just transition’ for displaced workers.

Understandably, workers haven’t warmed to the idea. After all, it is no secret that oil and gas jobs are high-paying, high-quality jobs, and the clean energy jobs available for workers to ‘transition’ into pay lower wages, are less stable, and offer fewer benefits.

A new study released this month by the University of Massachusetts Amherst gives workers no reason to change their minds.

While the study mainly focuses on outlining “a program for a clean energy transition in California” – at a staggering cost of $1.4 trillion – it also addresses the ‘just transition’ concept, and fails to assure oil and gas workers that they won’t end up in far worse jobs over the long term.

Indeed, the Amherst study repeatedly recognizes this core challenge. At one point, the study states: “at present, average compensation for oil and gas workers is around $130,000 … well above the roughly $85,000 received by workers in California’s current clean energy sectors.”

In its discussion of the “new employment” created by the $1.4 trillion in recommended spending on various clean energy, infrastructure and agriculture initiatives, the study lists a wide variety of occupations that would expect to see growth, including carpenters, welders, machinists, truck drivers, roofers, and agricultural laborers. The study then soberly notes that “the quality of these jobs – including wages, benefits, and levels of unionization – vary by sector.”

As a remedy, the study argues that California could mandate quality standards for the jobs created under clean energy initiatives. But the power of the state in accomplishing this is limited – and any government mandates costing employers would ultimately be passed along to consumers through higher costs.

To its credit, unlike the vast majority of ‘just transition’ advocates, the Amherst study makes an attempt to quantify the cost of assistance programs like three years of wage protection, fully funded pensions for retirees, and retraining and relocation support for displaced workers, which it estimates at $4.7 billion to $8.3 billion over 10 years.

Unfortunately, as an economist with Capitol Matrix Consulting pointed out in a memo to Californians for Energy Independence, this estimate is built on a flawed analysis that undercounts the number of displaced workers needing assistance and, therefore, the cost of assistance programs.

The economist notes that the Amherst study bases its entire ‘just transition’ cost calculation on an assumption that “production activity and employment in the oil and gas industries will decline at approximately the same rates as fossil fuel energy consumption in the state” – by 50 percent through 2030. Yet there are two issues with this assumption: 1) state and federal analyses show oil and gas consumption in California will remain steady through 2030, not fall by half; and 2) the “steady decline” theory for production and employment is faulty.

The CMC economist argues: “In an environment in which future oil and gas production is prohibited, energy investment in California will fall dramatically. Energy is a capital-intensive industry, requiring large investments to maintain future production and refining capacity. Much of that work will cease once it’s clear that future in-state production is being phased out. In effect, oil and gas job losses will occur immediately, not steadily decline.”

In short, by wrongly assuming that half of the oil and gas workforce will remain employed beyond 2030, the Amherst study artificially reduces by half the number of employees that it considers eligible to receive assistance. Therefore, the cost estimate the study provides is undoubtedly a massive underestimation. 

As activists continue pushing radical shutdown policies across California, workers are right to worry about what’s ahead. A study that fails to fully account for all workers who would require transition assistance – and does nothing to assure workers that they won’t face massive pay cuts, fewer benefits, and lower quality job opportunities over the long term – isn’t going to help alleviate those concerns.