“I was doing cartwheels,” said Ms. Fahy, who represents the
area. But she was soon caught in a political bind.
A powerful union informed her that most of the equipment for
New York’s big investment in offshore windmills would not be built by American
workers but would come from abroad. Yet when Ms. Fahy proposed legislation to
press developers to use locally made parts, she met opposition from
environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t
cause us any problems,’” she recalled.
Since President Biden’s election, Democrats have extolled
the win-win allure of the transition from fossil fuels, saying it can help
avert a climate crisis while putting millions to work. “For too long we’ve
failed to use the most important word when it comes to meeting the climate
crisis: jobs, jobs, jobs,” Mr. Biden told Congress last month.
On Tuesday, his administration gave final approval to the
nation’s first large-scale offshore wind project, off Martha’s Vineyard in
Massachusetts, again emphasizing the jobs potential.
But there is a tension between the goals of industrial
workers and those of environmentalists — groups that Democrats count as
politically crucial. The greater the emphasis on domestic manufacturing, the
more expensive renewable energy will be, at least initially, and the longer it
could take to meet renewable-energy targets.
That tension could become apparent as the White House
fleshes out its climate agenda.
“It’s a classic trade-off,” said Anne Reynolds, who heads
the Alliance for Clean Energy New York, a coalition of environmental and
industry groups. “It would be better if we manufactured more solar panels in
the U.S. But other countries invested public money for a decade. That’s why
it’s cheaper to build them there.”
There is some data to support the contention that climate
goals can create jobs. The consulting firm Wood Mackenzie expects tens of
thousands of new jobs per year later this decade just in offshore wind, an
industry that barely exists in the United States today.
And labor unions — even those whose members are most
threatened by the shift to green energy, like mineworkers — increasingly accept
this logic. In recent years, many unions have joined forces with supporters of
renewable energy to create groups with names like the BlueGreen Alliance that
press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion
proposal that Mr. Biden is calling the American Jobs Plan.
But much of the supply chain for renewable energy and other
clean technologies is in fact abroad. Nearly 70 percent of the value of a
typical solar panel assembled in the United States accrues to firms in China or
Chinese firms operating across Southeast Asia, according to a recent report by
the Center for Strategic and International Studies and BloombergNEF, an energy
research group.
Batteries for electric vehicles, their most valuable component,
follow a similar pattern, the report found. And there is virtually no domestic
supply chain specifically for offshore wind, an industry that Mr. Biden hopes
to see grow from roughly a half-dozen turbines in the water today to thousands
over the next decade. That supply chain is largely in Europe.
Many proponents of a greener economy say that importing
equipment is not a problem but a benefit — and that insisting on domestic
production could raise the price of renewable energy and slow the transition
from fossil fuels.
“It is valuable to have flexible global supply chains that
let us move fast,” said Craig Cornelius, who once managed the Energy
Department’s solar program and is now chief executive of Clearway Energy Group,
which develops solar and wind projects.
Those emphasizing speed over sourcing argue that most of the
jobs in renewable energy will be in the construction of solar and wind plants,
not making equipment, because the manufacturing is increasingly automated.
But labor groups worry that construction and installation
jobs will be low paying and temporary. They say only manufacturing has
traditionally offered higher pay and benefits and can sustain a work force for
years.
Partisans of manufacturing also point out that it often
leads to jobs in new industries. Researchers have shown that the migration of
consumer electronics to Asia in the 1960s and ’70s helped those countries
become hubs for future technologies, like advanced batteries.
As a result, labor leaders are pressing the administration
to attach strict conditions to the subsidies it provides for green equipment.
“We’re going to be demanding that the domestic content on this stuff has to be
really high,” said Thomas M. Conway, the president of the United Steelworkers
union and a close Biden ally.
The experience of New York reveals how delicate these
debates can be once specific jobs and projects are at stake.
Late last year, the Communications Workers of America began
considering ways to revive employment at a General Electric factory that the
union represents in Schenectady, N.Y., near Albany. The factory has shed
thousands of employees in recent decades.
Around the same time, the state was close to approving bids
for two major offshore wind projects. The eventual winner, a Norwegian
developer, Equinor, promised to help bring a wind-tower assembly plant to New
York and upgrade a port in Brooklyn.
“All of a sudden I focus on the fact that we’re talking
about wind manufacturing,” said Bob Master, the communications workers official
who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there
could be a New York supply chain. Let’s give it a try.”
In early February, the union produced a draft of a bill that
would ask developers like Equinor to buy their wind equipment from
manufacturers in New York State “to the maximum extent feasible” — not just
towers but other components, like blades and nacelles, which house the
mechanical guts of a turbine. Ms. Fahy, a member of the Assembly, and State
Senator Neil Breslin, a fellow Democrat from the Albany area, signed on as
sponsors.
Environmentalists and industry officials quickly raised
concerns that the measure could discourage developers from coming to the state.
“So far, Equinor has gone above and beyond what any other company
has done,” said Lisa Dix, who led the Sierra Club’s campaign for renewable
energy in New York until recently. “Why do we need more onerous requirements on
companies given what we got?”
Ms. Dix and other clean-energy advocates had worked with
labor unions to persuade the state that construction jobs in offshore wind
should offer union-scale wages and representation. And New York’s system for
evaluating clean-energy bids already awarded points to developers that promised
local economic benefits.
Ms. Reynolds, the head of the environmental and industry
coalition in New York, worried that going beyond the existing arrangement could
make the cost of renewable energy unsustainable.
“If it became bigger and more noticeable on electric bills,
the common expectation is that political support for New York’s clean-energy
programs would erode,” she said.
The communications workers sought to offer reassurance, not
entirely successfully. “I said to them, ‘We’re trade unionists: We ask for
everything, the boss offers us nothing, and then we make a deal,’” Mr. Master
said. “‘But I do think there’s no reason why turbines should be coming from
France as opposed to Schenectady.’”
The final language, a compromise negotiated with the state’s
building trades council and passed by the Legislature in April, allows the
state to award additional points in the bidding process to developers that
pledge to create manufacturing jobs in the state, a slight refinement of the
current approach. (It also effectively requires that workers who build, operate
or maintain wind and solar plants either receive union-scale wages or can
benefit from union representation.)
While the law included a “buy American” provision for iron
and steel, the state’s energy research and development agency, known as
NYSERDA, can waive the requirement.
The agency’s chief executive, Doreen Harris, said she was
generally pleased that the existing approach remained intact and predicted that
the state would have blade and nacelle factories within a few years.
Some analysts agreed, arguing that most offshore wind
equipment is so bulky — often hundreds of feet long — that it becomes
impractical to ship across the Atlantic.
“There’s a point at which importation of all goods and
services doesn’t make economic sense,” said Jeff Tingley, an expert on the
offshore wind supply chain at the consulting firm Xodus.
But that has not always reflected the experience of the
United Kingdom, which had installed more offshore wind turbines than any other
country by the start of this year but had manufactured only a small portion of
the equipment.
“Even with the U.K. being the biggest market, the logistics
costs weren’t big enough to justify new factories,” said Alun Roberts, an
expert on offshore wind with the British-based consulting firm BVG Associates.
A 2017 report indicated that the country manufactured well
below 30 percent of its offshore wind equipment, and Mr. Roberts said the
percentage had probably increased slightly since then. The country currently
manufactures blades but no nacelles.
All of which leaves the Biden administration with a
difficult choice: If it genuinely wants to shift manufacturing to the United
States, doing so could require some aggressive prodding. A senior White House
official said the administration was exploring ways of requiring that a portion
of wind and solar equipment be American-made when federal money was involved.
But some current and former Democratic economic officials
are skeptical of the idea, as are clean-energy advocates.
“I worry about local content requirements for offshore wind
from the federal government right now,” said Kathleen Theoharides, the
Massachusetts secretary of energy and environmental affairs. “I don’t think
adding anything that could potentially raise the cost of clean energy to the
ratepayer is necessarily the right strategy.”
Mr. Master said the recent legislation in New York was a
victory given the difficulty of enacting stronger domestic content policies at
the state level, but acknowledged that it fell short of his union’s goals. Both
he and Ms. Fahy vowed to keep pressing to bring more offshore wind
manufacturing jobs to New York.
“I could be the queen of lost causes, but we want to get
some energy around this,” Ms. Fahy said. “We need this here. I’m not just
saying New York. This is a national conversation.”
