Can “Green Economy” Jobs Get Nevada Out of this Recession?
This post by Fred Steinmann
A week ago on Monday, February 8, 2010, Nevada Governor Jim Gibbons gave his “State of the State” address, with State Senate Majority Leader Steven Horsford providing the Democratic Response. One of the more interesting points made by both the Governor and the Senator was the role “green economy” jobs will have in brining Nevada out of the current economic recession. As Governor Gibbons stated, “We are looking not only to expand our manufacturing base, but also to bring new green energy jobs to Nevada.” Senator Horsford also stated, “And while we manage the budget crisis at hand, we must continue to position our state for the opportunities that lie ahead. The national economy is changing and with it, Nevada is poised to attract new industries that could lead us out of these economic doldrums and help us reduce our reliance on gaming and tourism alone.”
So, can “green economy” and “green energy” jobs lift Nevada out of the current economic doldrums? The short answer is no. With all the talk of new green economy and green energy jobs by federal, state, and local policy makers and elected officials, no one has spent much time talking about what this type of economic development actually entails. It can take, quite literally, generations to build the facilities needed to generate enough solar, wind, and geothermal energy needed to power the state. It can take equally as long to retrain miners and hotel-casino employees to work in these facilities. The development of new research facilities can take decades (if not longer) to produce the reliable and workable technologies and train the workers needed in the green energy sector. The technology and infrastructure needed to support state-wide recycling will also require significant amounts of time and money – two commodities that the state is very short on these days. Unless we plan to import the workers and the companies that already have the expertise in these areas – a purpose that seems pointless if the goal is to create mid to high skill level and paying jobs for Nevadans already here – it could take, quite literally, generations for new green economy and green energy sector industries to supplant gaming and tourism as Nevada’s primary economic driver.
As I see it, there are three major – and I mean MAJOR – obstacles that Nevada will have to overcome if the state is serious about making green economy and green energy sector industries the primary driver of economic activity in Nevada. A lack of needed infrastructure, a general lack of institutional capacity and capability, and the need to retrain and retool the existing workforce are the three major obstacles that currently prohibit new green economy and green energy sector industries from becoming a primary economic driver in Nevada.
Infrastructure is a big catch phrase. I know that there are a lot of people out there that think it’s relatively easy to start-up solar, wind, and/or geothermal energy production. It simply is not. It is a time consuming and very expensive process that involves a wide range of infrastructure investment. Not only are solar panels, wind turbines, and new geothermal turbines needed, but a vast array of supporting infrastructure is also needed. In Nevada, the areas in which solar, wind, and geothermal power could most efficiently be “mined” and put to productive use are in highly inaccessible areas throughout the most rural parts of our state. This will require the development of a vast network of new access roads capable of supporting large transport trucks and cranes – not only to build the energy production facilities but also to provide ongoing access for routine maintenance. Once developed, hundreds of miles of new transmission lines will have to be erected and integrated into the existing power grid in order to transport the solar, wind, and geothermal power to end users.
The investment in new infrastructure could potentially cost hundreds of millions if not billions of dollars to properly develop. More importantly, this is a feat that simply cannot be completed within the next 5 or 6 months or even the next 5 or 6 years. This is a long-term investment in Nevada’s long-term economic health; an investment that could take the better part of 50 years to begin to provide a return on investment to the state.
The second major obstacle Nevada must overcome is its own institutional limitations. Simply put, our state and local governments do not currently have the internal institutional capacity needed to support such a large undertaking. Although there is a Nevada State Office of Energy and a Nevada Commission on Economic Development, there is very little capacity at either the county or local level. The successful development of a long-term strategic economic development plan based on green economy and green energy sector industries for Nevada will require both political and bureaucratic leadership at all levels of government. It is not enough for county and local governments to simply say “we want green energy jobs”. County and local governments must develop administrative competence in partnering with the private sector to successfully develop new solar, wind, and geothermal energy sites.
The third major obstacle Nevada must overcome is the capabilities of its own workforce. It is unreasonable to assume that Nevadans, who have recently lost their job in the retail sector, the gaming and tourism sector, or even the professional sector, can easily transform their careers and training overnight to fit the very demanding and highly technical requirements of the jobs found in the green economy and green energy sectors. Even those Nevadans who have worked in construction all their working lives will require extensive retraining to build the solar, wind, and geothermal facilities and infrastructure needed to build a green Nevadan economy. For sure, this is not a Nevada-specific problem. As both the Governor and the Senate Majority Leader accurately pointed out Monday night, even the national economy is changing and this has left millions of people nationwide unable to make the shift from 20th Century-sector jobs to 21st Century-sector jobs.
To properly retrain Nevadans eager for green economy and green energy sector jobs, a comprehensive state-wide workforce development plan is needed. This will require the political and financial willpower to begin as early as elementary school. A renewed focus on mathematics and science will be needed. Nevada community colleges will have to play a much larger role in providing the technical training that workers in the green economy and green energy sector industries will need in order to be competitive. Finally, Nevada’s universities will also have a large role to play. A “Renewable Energy Minor” – the only formal program at either UNR or UNLV available to students interested in renewable energy – is not going to cut it. Universities in communities across the globe that have been really serious about committing themselves to a long-term strategic economic development plan based on green economy and green energy sector industries have created entirely new departments and colleges dedicated to renewable energy education. It would take years to develop such a plan and even longer for the plan to produce tangible economic results.
The first step in the right direction would be for the state, in cooperation will all local levels of government and other governmental agencies (i.e. school districts, counties, municipalities, utility companies, universities, etc.), to develop a thorough and proper long-term strategic economic development plan based on green economy and green energy sector industries. This will require much, much, much more than just a simple report generated by either the Nevada Commission on Tourism or the Nevada Commission on Economic Development after 30 short days of discussion and thought.
I don’t necessarily want to go into the details of how to develop such an economic development plan or how to implement it here. Let’s just say that when energy and natural resource development is used as an underpinning component of a state’s overall economic development plan, it can take decades to develop and successfully implement and cost hundreds of millions, if not billions, of dollars. And success is not guaranteed as successful energy and natural resource development is conditional not only on state-wide or local economic conditions, but on global conditions as well.
For those of you really interested in energy and natural resource development as an underpinning component of a government’s overall economic development plan, I highly suggest a dissertation that my dad, Dr. Michael Steinmann, wrote and published in 2005. It is titled, “Alberta’s Economic Development of the Athabasca Oil Sands.” This dissertation outlines the years of public-sector and private-sector investment in the development of the Athabasca oil sands in the northern part of the Province of Alberta, Canada. In short, it took the Canadian Federal Government, the Provincial Government of Alberta, and the private-sector over 60 years to just begin the development of the oil sands. To put it in perspective, the first official provincial policy related to the Athabasca oil sands was adopted in 1943. It took nearly 60 years for the Canadian Federal Government and the Alberta Provincial Government to develop enough internal bureaucratic capacity to support the development of the oil sands and the physical infrastructure needed for the private sector to begin to access the nearly 1.5 trillion barrels of crude oil in the most rural and remote northern part of the province.
If you are interested in reading it, you can probably order a copy through a local library or purchase a copy through ProQuest/UMI publishing. It’s an easy, non-technical read. But most importantly, I hope that it will help you better understand the vast complexities of an energy and natural resource driven economic development plan.
So, are green economy and green energy sector industry jobs the salvation for Nevada? In the short-term, no. But in the long-term, green economy and green energy sector jobs can help make Nevada a world leader and help Nevada achieve a measurable degree of long-term, stable, economic growth. But it will take time. It will take money. And, most importantly, it will take a measurable degree of patience by everyone involved.
Fred,
This is a great piece. It is simply amazing to hear the rhetoric about renewable energy that is coming from both the Governor and his leading opponent Rory Reid. It is as if they believe that by this time next year we will be well on the road to recovery, though the development of renewable energy and recycling. It sort of makes me chuckle. I have lived in Nevada since 1990, and have been hearing that Nevada has the potential to be the Saudi Arabia of renewable energy since I first arrived. Apparently just wishing it so takes a very long time to make it happen.
I also fail to understand how the development of renewable energy will revitalize the state economy. Once in place, most solar, wind, or geothermal renewable energy plants will take very few people to operate and maintain. It certainly won’t reduce our costs of electricity, and in fact only becomes economic if the overall global cost of energy is required to carry the real costs of environmental degradation.
It is highly unlikely that the manufacturing of renewable energy systems and components will take place in Nevada. There is such an abundance of competition for this sector that a state that has little current manufacturing capacity simply will never catch up without a sea change in thinking about the necessary role that government and good governance must play in the change. For example just look Mariah Power, the Reno based firm that decided to take its manufacturing operation to Michigan: Manistee Michigan, offered a 43,000-square-foot plant that’s been manufacturing conveyor systems for the automotive industry. It has room to expand and skilled workers on hand to satisfy the contractual manufacturing agreement. “It saved us half a million in equipment costs,” says Hess of Mariah Power. “I’m getting a manufacturing plant without paying up front. There’s nothing like this in Northern Nevada.” In addition to the $1 million worth of existing steel-working equipment and tooling equipment at MasTech Manufacturing, Michigan also coughed up a $400,000 state grant. Meanwhile Nevada officials met to discuss how the University of Nevada might increase its output of mechanical and electrical engineers, and now, even that is a pipe dream.
The only bonus from renewable energy will come if somehow Nevada can tap into the revenue stream generated at these plants, and in this state with the smallest of all state governments that is not likely, especially given the fact that these potential projects are mostly on Federal Lands.
As you so accurately pointed out, Nevada does not have the capacity to undertake this effort, and with the continued calls to further choke down the size of government, and do away with our hard won educational advances, we appear to be moving in exactly the wrong direction.
You might be interested to know that the news that is swirling around out here in the Big Empty, is a renewed fear that the U.S. Fish and Wildlife Service is about to place Sage Grouse on the endangered species list. If this happens, another major barrier will be place in the path of the development of renewable energy, and all other sources of resource based economic development in the West.
Fred, you might find this an interesting read:
http://www.nevadamagazine.com/index.php/issues/read/going_green/