Fossil fuel jobs unit closed because it didn't align with government priorities

8:41 am today

Eloise Gibson, Climate Change Correspondent

The programme designed to help fossil fuel workers into new jobs went up in smoke because the government did not consider it a priority. File photo. Photo: 123RF

The government says it closed a unit aimed at helping fossil fuel workers into new jobs, because the programme did not align with its priorities.

The Just Transitions Unit at the Ministry for Business, Innovation and Employment was closed by the coalition government in May after ACT Party leader David Seymour called it a "talk-fest".

Seymour said it was scrapped as part of a cost-cutting effort he was leading.

Economic Development Minister Melissa Lee declined to be interviewed, but told RNZ by email the unit did not align with the government's priorities.

She said it was set up when the previous government banned offshore exploration for oil and gas, affecting the Taranaki area, but this move was now being reversed by the government.

Lee said the unit's other area of focus - Southland - would continue to have employment from the Tiwai Point aluminium smelter for another 20 years.

But while Tiwai stayed open longer than expected, and the government was reopening fossil fuel drilling, Climate Change Commission chair Rod Carr said the shift to clean energy was being driven by global forces, and was not going to stop.

He said it would be better if the government made that clear to workers, so they could make informed career choices.

"The energy transition is going to happen whether we like it or not, whether we vote for it or not, its a fact. There is going to be a swing towards more jobs in renewable energy than in the fossil fuel energy sector."

By 2035 there would be more work installing heat pumps and solar panels, and less work installing gas fittings and mining coal, he said.

Carr said the government was not helping employees, by signaling to business that more fossil fuels could be developed.

"It's unhelpful for the government to signal that this transition is not going to occur. It will. If we delay it, it will be more likely to be disruptive, that we've trained too many motor mechanics and not enough EV engineers."

Carr said the global transition was being driven by health, congestion and plunging costs for the likes of solar power and EVs.

He said the switch from fossil fuels to electricity would lower overall energy bills and could create work overall, because renewable electricity was made here, unlike most fossil fuels.

But, the climate chief said there would be impacts - and not only on the companies mining and burning fossil fuels.

As more businesses stopped using coal, oil and gas, they would compete for electricity, lowering energy costs across the economy but making it harder for specific industries whose business models relied on access to very cheap power, he said.

They'd be outbid by "higher value" uses, by former users of fossil fuels, he said.

A tougher labour market

Ed Miller - a researcher on tax and economics for trade unions - said workers needed help now, with the closure, or threatened closure, of several pulp and paper mills.

He said it would have been good if there was a government team working to help people with recent redundancies, like the ones at Whangarei's Marsden Point oil refinery.

"The Just transitions Unit was super important, I think if anything if its mandate was too narrow," said Miller.

"I think it would have been great if it had been applied in the context of Marsden Point, where I'm from, in Whangarei.

"The government of the day relied on a very hot labour market to place those people."

The labour market was now much tougher, and Miller said some remote communities risked losing their high wage workers if well-paying facilities closed. That could create "wage scarring" in a community, he said.

"Often they're in pretty remote locations where there's not other employers or industries that can soak up the workforce in the same way," said Miller.

That was where Timaru is lucky, said Nigel Davenport, head of economic development agency Venture Timaru.

Davenport said about 500 workers still needed jobs after the closure of Smithfield meatworks, which made about 600 people redundant, as well as affecting suppliers such as security and cleaning firms.

But while Davenport said the closure was an $80 million blow, he said South Canterbury had unusually wide jobs diversity - compared with other townships that had only one big (sometimes fossil-fuelled) employer.

"We're not a one trick pony in South Canterbury, we're not solely a forestry town or solely reliant on our primary sector, although it is the backbone. One of our biggest pluses is we have a really strong manufacturing and food processing sector, we've also got a really strong transport and logistics sector. So we don't tend to get the peaks and troughs."

He said a jobs fair on 5 November would host around 40 employers, although some of them would be Australian recruiters.

Davenport said the region was about to embark on a long-term plan, considering what other industries it should try to attract.

He said many of the region's food processing plants had already moved from coal to electricity or biomass, and were well-positioned for the future, so long as they could keep securing renewable energy "at a price that works."

Hows jobs could change: The view from 2021

A report by the Motu economic consultancy in 2021 found the number of jobs overall wouldn't change much as the country cut greenhouse gas emissions, but some types of work would change.
Motu said transport industries could see net positive effects, while some kinds of manufacturing and oil and gas extraction would see net negative impacts on job numbers, as would activities like coal mining.
Motu found forestry and logging were expected to grow between 2022 and 2050 while sheep, beef cattle and grain farming were expected to decline between 2022 and 2050 under all of the four of the transition pathways it looked at.
It found jobs in fossil fuel electricity generation could be expected to move to other forms of electricity generation.
Taranaki and the West Coast were the only two regions predicted to have fewer jobs at the end of the period under all four transition pathways, according to Motu.
Meanwhile Auckland was dominated by industries that were predicted to grow.
The Climate Change Commission also looked at employment impacts in its 2021 report.
It said most regions would experience net job gains from the government taking action to meet the country's emissions budgets, compared with not changing anything from 2021 settings.
The commission said there would be fewer car mechanics, because EVs need less motor maintenance, but the country would chew through more tyres. "EVs require less maintenance as they have fewer parts, and do not need oil changes or spark plugs to be replaced. They also have less wear on brakes due to regenerative braking, but have more wear on tyres as they are heavier," its report said.
Farmers would need more trained farm advisers to help them achieve emissions cuts, which in turn would help them keep their access to overseas export markets, said the commission.
The commission noted several of the sectors where emissions were going to be hardest to cut were located in specific regions: Aluminium manufacturing in Southland, methanol in Taranaki, pulp and paper in the Bay of Plenty, and cement and oil refining in Northland.
It said the coal mining and oil and gas sectors, and the services that support them, would be impacted by the

move away from fossil fuels. Those sectors would lose about 500 jobs, even if the Government did nothing more to cut emissions, the commission said. These losses would particularly affect Taranaki and the West Coast.

The report said changes could be afoot for the country's 5,700 licensed gasfitters, however since most gasfitters also worked in plumbing, the number of jobs impacted was "difficult to predict"
Building major new renewable electricity generation to meet increased demand - and transmission and distribution to move the power around - would provide jobs outside the main centres, it said.