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You probably saw the study released last week that says coal plants frequently fail to deliver on promised jobs.
A New York Times article last week on the research, conducted by the Ochs Center for Metropolitan Studies, was careful to note that it’s not unusual for industry to be, shall we say, optimistic when it comes to job creation.
No one should be surprised to learn that in trying to woo a reluctant community, developers in just about every industry tend to exaggerate — or perhaps optimistically overestimate — the number of jobs they expect to create by building that new shopping mall, industrial park, widget factory or other project.
Job creation is often cited as justification for public investment in wind and solar power, and as such, those job creation claims go under the microscope frequently. That contributes to a narrative that says “green job” claims are squishy relative to other industries.
The Ochs study is important because it challenges this narrative. In the study, the researchers looked at six new coal plants that came online between 2005 and 2009, and found that, after adjusting for other economic factors, only one actually produced the jobs promised.
In a follow-up story in the Chattanooga Times Free Press, a representative from the coal industry acknowledges that job figures tend to be inflated:
Luke Popovich, spokesman for the National Mining Association, did not specifically address the study’s findings. However, the loss of jobs in counties where the plants were built could well be due to the recession.
“The plant construction likely reduced the loss. I think it is standard for companies to round up on direct and indirect jobs, and underestimate plant construction costs,” he said. “I’m sure a similar study could be done on gas plants, as all have the same incentive, [and definitely wind plants].”
Popovich’s point about underestimating costs is also worth noting – for instance, the recently completed Oak Creek power plant in Wisconsin ran $191 million over budget, and as much as $156 million of that could be passed on to ratepayers.
But if everybody does it, as Popovich suggests, then what’s the point? In the case of coal generation, there are environmental and health costs that are borne by the community that offset whatever economic benefits the plant may provide:
All industrial development is a trade-off of some sort. It’s important to consider the economic benefits as well as the costs, and the Ochs study makes clear that when it comes to certain types of generation, we may not be getting a complete picture.
Photo by straightedge217 via Creative Commons