Commentary, NC Budget and Tax Center, Raising the Bar 2015

Raising the bar: McCrory’s plan for the environment is a job killer

Editor’s note: This is the latest installment in “Raising the Bar” — a new series of essays and blog posts authored by North Carolina nonprofit leaders highlighting ways in which North Carolina public investments are falling short and where and how they can be improved.We need an energy system that protects our vital resources and creates sustainable jobs. The good news is that North Carolina has great potential for such a system. The bad news is that the current budget takes us further from that goal, not closer to it.

The ongoing discussions of the 2015-2017 state budget provide a useful context for analyzing the health of our state’s economy. The budget’s treatment of the environment makes clear just how shortsighted the planning for economic development is in this state. Over the last several years, rather than pursue the myriad opportunities to leverage clean technology and innovation to protect our environment and spur job growth, the state budget has ignored the need to protect our state’s most valuable resources.

Since the Great Recession of 2008, cuts to North Carolina’s primary environmental regulatory body have constituted a wholesale assault on our state’s living environment. The scale and pace of cuts to the Department of Environment and Natural Resources (DENR) represent a structural dismantling of numerous regulatory bodies, diverting systems of revenue generation for the foreseeable future. If continued, these trends could spell disaster for North Carolina’s families. Instead, we should pursue a budgetary structure and job creation scenario that benefit both our economy and the planet by investing in renewable energy and energy efficiency, remediating current environmental degradation, and repairing existing infrastructure.

Our current reality, however, is far different. In 2009, 30 positions were eliminated from DENR. Over the next two years another 225 jobs were cut, but in Gov. Pat McCrory’s first year of office, while the economy was supposedly in recovery, another 131 positions went to the wayside, with 1,500 additional positions transferred out of the department over that same four-year period.

In effect, these cuts create a feedback loop, whereby the budget is stripped to the bone, jobs are cut or left unfunded. This means that there isn’t enough enforcement staff to adequately respond to demand, and then the department is criticized for inefficiency — resulting in more cuts. Additionally, the lower numbers of citations issued due to backlogs from understaffing result in a reduction of overall revenue generated through enforcement activities, further cutting into the agency’s budget.

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Given all this, it’s clear the current administration is simply headed in the wrong direction. A case in point is the inadequate response to last year’s coal ash spill, the third largest of its kind in the nation’s history. Gov. McCrory’s response was so slow (perhaps not surprisingly for a former Duke Energy executive) that a federal court intervened to overturn a slap-on-the-wrist ruling and force Duke to take responsibility for the cleanup. To add insult to injury, however, only a month after this massive spill the Division of Water Resources — which regulates pollution to surface waters — cut 13% of its staff.

In 2014, the creation of the Mining and Energy Commission (MEC) marked another opportunity for North Carolina to set a positive example, this time by developing some of the strongest rules in the nation to govern hydraulic fracturing. Instead, however, the legislature adopted a ruleset that cuts corners and ignores standard industry recommendations for cost recovery. The North Carolina General Assembly is willing to sacrifice the health and well-being of small cities and towns in order to lure any drilling company that will come to tap our meager supply of oil and gas reserves, including “wildcatters” who are likely to do more harm than some of the larger, better funded companies and will no doubt be lured by the lack of any meaningful regulatory protection.

The alternative to wasting tax dollars to tap our extremely limited natural gas reserves through fracking is to make a decisive shift to renewable energy – a path that’s already paying off and demonstrating benefits to North Carolina’s working families even without the public support it deserves. Generally, public incentives are best used to catalyze growth in new industries and preferably those that demonstrate a contribution to the public good. The fossil fuel industry’s push for fracking meets neither of those criteria, being already highly subsidized and introducing dangers both to workers and the environment.

North Carolina is making strong progress in the area of renewables with the creation of the first “renewable portfolio standard” in the southeast. These standards require a little over 12% of energy generation come from renewable sources by 2021. These standards, along with solar incentives and tax credits, have provided a context for a booming solar industry. According to The Solar Economy: widespread benefits for North Carolina, a report issued just last month by Duke University, North Carolina ranks first in the southeast and fourth nationwide in installed solar capacity. Solar currently provides over 4,300 jobs representing a $2 billion investment in the state’s economy. Solar is so popular with North Carolinians that capacity is outstripping demand and there’s a backlog of nearly 400 projects.

Offshore wind, primarily regulated federally through the Bureau of Ocean Energy Management (also currently considering proposals for oil drilling off North Carolina’s coast) is a sector with even greater potential for growth that is, as of yet, virtually untapped. Offshore wind power could supply more than 112% of NC’s energy needs (37.9 GW), more than all fossil fuels combined. We have more wind potential here than any other state on the east coast, but there are currently no existing wind farms in North Carolina.

Across the Atlantic, the UK expects to create an average 1,300 jobs for each gigawatt (GW) of offshore wind power installed. If 37.9 GW of offshore wind farms are installed off North Carolina’s coast, approximately 50,000 permanent jobs could be created in North Carolina. This amount of offshore wind energy would represent $91 billion in clean energy investments in North Carolina.

Wind turbines invariably have to be manufactured in-state due to their size. Currently there are more than 600 firms employing more than 32,000 workers that manufacture, or could be converted to manufacture, component parts needed for wind projects. All of these pieces taken together paint a clear picture that offshore wind represents a potential economic boon for North Carolina.

In contrast, fracking is projected to create a mere 387 jobs per year, many of which will be temporary and subject workers to dangerous working conditions. The proposed Atlantic Coast Pipeline project stands to create just 837 jobs during the construction phase and 39 full-time, permanent jobs all told.

Nearly a quarter of a million North Carolinians are currently unemployed. A clear path exists to begin to close that gap by catalyzing growth in sectors that benefit both the economy and our planet. Such a path stands in stark contrast to an approach that dismantles environmental protections and puts North Carolina communities at risk for the sake of a corporate bottom-line.

Rather than layoffs and restructuring in our department of environmental protection, we need jobs that restore our wetlands and remediate past harms. Rather than corporate welfare and tax cuts for polluters, we need to divert subsidies earmarked for the fossil fuel industry to further boost renewable energy investment, including a shift from investment in natural gas infrastructure and offshore drilling exploration into solar, energy efficiency, and offshore wind. We need to expand our public transportation systems to accommodate our growing urban populations and fund projects to rebuild our current, decaying infrastructure.

These are the kinds of projects that shift us towards an economic future that benefits all North Carolinians. But, they only become possible if we fix the problems in our budgetary and tax systems. The Governor’s proposed budget looks like much of the same old mess, but perhaps this next round of budget negotiations can begin to chart a different path.

Aiden Graham is the Field and Mobilization Director at the North Carolina League of Conservation Voters.

2 Comments


  1. LayintheSmakDown

    April 4, 2015 at 9:14 am

    It is good that we have taken steps to decrease this job killing department. The over-regulation and related hoops that businesses and regular people have to jump through is a major issue. We need to keep on starving the department until we have come to a good balance of environmental oversight while not burdening the people of this great state.

  2. Alex

    April 4, 2015 at 11:26 am

    I’m laughing out loud on this one ! It would take 15 years to get through all of the hoops for an offshore wind farm. Just look at the amount of time spent on Cape Cod !

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