We all want to reduce dependence on foreign oil. We all want to reduce global warming. We all want—really, really want—more jobs. In June President Obama signed an order that environmental advocacy groups say will do all three...

By Advance Business Capital

We all want to reduce dependence on foreign oil. We all want to reduce global warming. We all want—really, really want—more jobs. In June President Obama signed an order that environmental advocacy groups say will do all three. Will it?

The order, in the form of a Presidential Memorandum, included a signing ceremony, photo ops and the requisite sound bites, so it’s a Big Deal (a memo from the president isn’t just a suggestion). Reduced to its gist, it mandates DOT and EPA to require the transportation industry to improve fuel efficiency for all vehicles, from cars to heavy-duty trucks, by 20% within the next twenty years.

120,000 New Jobs

The administration makes no specific claim of job creation, but according to the Union of Concerned Scientists and CALSTART (a non-profit California-based consulting group), the project will have created “120,000 new jobs” by its goal year of 2030.

But Aaron Turpen, founder and director of the website GreenBigTruck.com, has sharply questioned the jobs projection. Turpen is an environmental journalist-advocate, but he also tries to be an honest broker. He believes the fuel goal is realistic, achievable and worthwhile. He argues, however, that while the project will undoubtedly create jobs, these will no more than match jobs lost in the transition from carbon to hybrid fuels. In other words, a wash.

Good News

Here’s a brief of Turpen’s argument:

First, the good news. New jobs will be created in two ways. 

1. Since fuel will be more efficient, fleets and O-Os will save money by using less of it. (This of course assumes that efficiency isn’t offset by increased price.) The money saved will be spent in other ways, such as increased capacity. In other words, more jobs. 
2. Companies that design, build and maintain new energy technologies will create jobs, many of them high-paying work requiring advanced education and technological expertise, which also means more people in education. Great!

And Bad News

Now the bad news. Jobs will be lost in two ways. 

1. About one and a half million people are currently employed to produce, repair and service commercial fleets and related industries. If half the medium-duty fleet goes hybrid and a quarter of that half goes all-electric, then a corresponding number of “old-fuel” jobs will vanish, about 181,000 of them. (Caveat: Turpen admits that he couldn’t find official figures for medium-duty fleet service and sales personnel, so his numbers represent a best guess. On the other hand, Turpen is not some PR flack getting stats from a dart board, so his estimate is at least a reasonable basis for argument.) 
2. Finally reduced petroleum demand means fewer jobs in the petroleum industry – as Turpen puts it, “everyone from the derrick man to the clerk at the truck stop.” Turpen doesn’t hazard figures for these lost jobs, so make up your own: maybe a lot, maybe a little. Certainly, however, workers would be laid off.

A Wash

Since we don’t have figures for #2, let’s work only with jobs lost through #1. Although Turpen estimates 181,000 jobs will be lost, only about a third of workers would be out of work. This is because new jobs would be created to service the “new-fuel” vehicles, not an equal amount though.

Why? Because electric vehicles have about a third of the parts and components of an internal combustion engine. A third of the workers in lost jobs would transition to new jobs, but two-thirds wouldn’t. Two thirds of 181,000 is 119,625, almost exactly the projected 120,000 “new jobs.”

Follow? Good. Write me a letter and explain it to me. I got lost somewhere between old-fuel and new-fuel numbers. To paraphrase Fox News: We report; you figure it out.

Moving on. According to Turpen’s reasoning, are there any wholly new jobs that will be created from this presidential order? Yes! You’ll be glad to know that more government regulators will be needed. Also probably more forms, so the bean counting industry will likewise benefit. More beans. More gas (so to speak).

So while the job picture isn’t rosy, it isn’t bleak either. Jobs created will equal jobs lost. Everyone stays in place. Does anything get better?

Good, Fast or Cheap?

Actually, yes. The U.S. will spend less money on imported oil and we’ll pollute our planet (at least through petroleum) a little less. America guzzles 21 million barrels of oil a day, 15 million from other countries. Not all that oil is used for transportation, but if we crunch the appropriate numbers, we get (according to Aaron Turpen) an annual savings of 20 million barrels of oil, just from the commercial sector alone. (Private vehicles will add their own savings but that’s not today’s topic.)

I’m sure you’re disappointed to hear that not everything our government does works out as well as it says it will, but that doesn’t necessarily mean it works out badly either. I saw a sign in a print shop once.

You want it how?

1) Good

2) Fast

3) Cheap

Choose any two.

We want (1) less dependence on foreign oil, (2) less global warming, (3) more jobs. If Aaron Turpen is right, that’s two steps forward, one step in place. That’s progress. You want it how? Choose any two.

This story was drawn from articles in GreenBigTruck.com, National Public Radio, CalStart and the Union of Concerned Scientists.

This article is provided as a service for truckers and everyone in the trucking industry by Advance Business Capital. ABC is the first and only factoring service designed by truckers for truckers. We provide innovative financial solutions exclusively to For-Hire truckers and Freight Brokers and are proud to be the first factoring company to receive the P3 (Preferred Platinum Provider) endorsement from the Transportation Intermediaries Association.