Comparing the Value of Coal Jobs versus Renewables – A Case Study
By Dr. Roger Bezdek, Management Information Services, Inc.
Public Service of New Mexico (PNM) plans to close the 847 megawatts (MW) coal-fired San Juan Generating Station (SJGS) and San Juan Mine (SJM) in 2022 and to install 500 MW of photovoltaics (PV), 140 MW of wind and 410 MW of batteries. However, the San Juan community and Enchant Energy plan to retrofit SJGS with carbon capture utilization and storage (CCUS) and keep it and the SJM open. The continued operation of the power plant and mine is the subject of intense debate centering on the relative environmental and jobs merits of CCUS versus renewables.
This case study assessed the environmental and jobs effects of the scenario where SJGS is retrofit with CCUS and the SJM continues to supply coal, and compared the results to those from replacing SJGS with renewables in accordance with the PNM Integrated Resource Plan (IRP). We modeled the scenario where SJGS continues to operate beyond 2022 and assumed that all of the captured CO2 is used for EOR. We estimated the environmental and job impacts in San Juan County and New Mexico of the SGJS CCUS retrofits and the PNM scenario, including: 1) coal plant retrofits; 2) pipeline-related impacts resulting from the CCUS; 3) retention or closure of the SJGS and SJM; and 4) renewable energy and battery impacts.
Fig. 1 shows the estimated CO2 emissions reductions under the CCUS scenario, called “CCUS” in this article, and the PNM scenario. It illustrates that: 1) under the PNM scenario, CO2 emissions will be reduced 65 percent; and 2) under CCUS, CO2 emissions will be reduced 89 percent.
January 2020 employment data were utilized – prior to COVID-19 – to estimate the total (direct, indirect and induced) jobs created. Jobs were considered to be full-time equivalent (FTE) jobs. The job impacts from CCUS derive from: 1) CCUS construction; 2) CCUS plant O&M; 3) pipeline construction; 4) pipeline O&M; and 5) continued operation of the SJGS and the SJM. The PNM scenario consists of: 1) 500 MW of solar; 2) 140 MW of wind; 3) 410 MW of batteries; 4) no natural gas or other fossil fuels; 5) closure of the SJGS and the SJM in 2022; and 6) provision by PNM of $41 million in severance, job training and community assistance payments. The job impacts from the PNM scenario derive from: 1) PV plant construction; 2) PV plant O&M; 3) wind turbine plant construction; 4) wind turbine plant O&M; 5) battery storage construction; 6) battery storage O&M; 7) continued operation of SJGS and SJM through 2022; and 8) decommissioning of SJGS.
The study found that CCUS creates significantly more jobs than the PNM scenario. Fig. 2 shows that, compared to the PNM scenario, in San Juan County CCUS creates 26 times as many construction jobs; 92 times as many O&M jobs; and 17 times as many SJGS and SJM jobs. In the state of New Mexico, CCUS creates about the same number
of construction jobs; four times as many O&M jobs; and more than 16 times as many SJGS and SJM jobs. Over the long term, CCUS would ensure full employment in San Juan County, whereas the PNM scenario would result in over 12 percent unemployment.
Fig. 3 shows that similar results hold true for the state of New Mexico. In 2021-2023, CCUS creates annually, on average, 814 more jobs – more than 20 percent more jobs each year. In 2024 and 2025, it creates on average, 3,500 more jobs (10 times as many jobs). In years 2026-2055, CCUS creates annually, on average, 3,600 more jobs (14 times as many jobs) in New Mexico.
In a jobs/MW analysis, CCUS creates substantially more jobs than the PNM scenario. Fig. 4 summarizes the differences in jobs created/MW over 2021-2055 by the two scenarios. For total jobs/MW over this period: 1) in San Juan, CCUS generates over 135 jobs/MW whereas the PNM scenario generates 5.2 jobs/MW – a 26-times difference; and 2) in New Mexico, CCUS generates over 162 jobs/MW whereas the PNM scenario generates 20 jobs/MW – an eight-times difference. In terms of total jobs/MW over this period, excluding jobs from the SJGS and SJM: 1) in San Juan County, CCUS generates 38 jobs/MW whereas the PNM scenario generates 0.48 jobs/MW – a 79-times difference; and 2) in New Mexico, CCUS generates 70.6 jobs/MW whereas the PNM scenario generates 10 jobs/MW – a seven-times difference.
Fig. 5 presents a summary comparison of jobs/MW in New Mexico under CCUS and the wind, photovoltaic and batteries portions of the PNM scenario. In terms of total jobs/MW in New Mexico, 2021-2055, CCUS generates: 1) nine times as many jobs/MW as the photovoltaics portion of the PNM scenario; 2) 10 times as many jobs/MW as the wind portion of the PNM scenario; and 3) 19 times as many jobs/MW as the batteries portion of the PNM scenario. In terms of total jobs/MW, 2021-2055, excluding jobs from SJGS and SJM, the CCUS scenario generates: 1) four times as many jobs/MW as the photovoltaics portion of the PNM scenario; 2) four times as many jobs/MW as the wind portion of the PNM scenario; and 3) eight times as many jobs/MW as the batteries portion of the PNM scenario. For total jobs/MW generated by construction in 2023 – the year of maximum construction, CCUS generates: 1) 7 percent more jobs/MW as the PV portion of the PNM scenario; 2) twice as many jobs/MW as the wind portion of the PNM scenario; and 3) twice as many jobs/MW as the batteries portion of the PNM scenario. In terms of O&M jobs/MW over 2024-2055, CCUS generates: 1) four times as many jobs/MW as the PV portion of the PNM scenario; 2) three times as many jobs/MW as the wind portion of the PNM scenario; and 3) 10 times as many jobs/MW as the batteries portion of the PNM scenario.
Local Tax Revenue Impacts
The two scenarios have very different impacts on San Juan area tax revenues. Over 2021-2055, CCUS generates $1.33 billion in total local tax revenues compared to $160 million under the PNM scenario. Over 2021-2055, CCUS generates $1.17 billion more in local tax revenues than the PNM scenario – more than eight times as much.
The differing impacts of the two scenarios on the tax revenues for San Juan County, the Central Consolidated School District (CCSD) and the San Juan Community College (SJCC) are shown in Fig. 6 and Fig. 7. Long term, the CCUS scenario would annually generate a substantial portion of the tax revenues of San Juan County, the CCSD and the SJCC, whereas the PNM scenario would generate only a trivial share of the tax revenues. Long term, under the PNM scenario, the three jurisdictions would have to raise, each year, an additional $35-$40 million in tax revenues from other sources. Long term, under the PNM scenario, jurisdictions would have to raise a total of an additional $1.2 billion in tax revenues from other sources.
Impacts on Native Americans
CCUS preserves and expands well-paying jobs for Native Americans, in an area where there are few such jobs. It preserves and expands revenues for Native American tribes, who have few other revenue sources. Over 2021-2055, CCUS creates for Navajos a total of 54,000 more jobs and $2.6 billion more wages and benefits than the PNM scenario. Additionally, it prevents a public health crisis for the Navajo and Hopi by retaining their supply of critically required coal for home heating.
The CCUS scenario generates substantially more jobs and jobs/MW than does the PNM option or any of the RE components of the PNM option – both in San Juan and in New Mexico. There is no appropriate comparison in which the PNM scenario, or any of its RE components, generates more jobs/MW than does CCUS. This holds true whether measured by the jobs/MW created by each scenario, by each scenario excluding the jobs impacts of SJGS and SJM, by the construction portions of the scenarios, or by the O&M portions of the scenarios. Thus, CCUS will generate many more jobs/MW than the PNM scenario or the RE components of the PNM scenario.
If the SJGS and SJM close, the implications for the San Juan area are ominous: Its historically stable source of well-paying jobs and revenues will disappear. Thus, CCUS may
be the key to San Juan’s and New Mexico’s future and can be a win-win. This research has documented the immense long-term economic and job benefits that CCUS retrofits of the SJGS will have for the state and for local communities.
Acknowledgment: The U.S. Department of Energy provided the funding for these analyses. However, the study does not necessarily reflect administration policy.
Roger Bezdek, Ph.D., is the founder and president of Management Information Services, Inc., a Washington, DC-based economic, energy and environmental research firm.