This report represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision. This report was funded through a gift from the Bezos Earth Foundation. More information is available here. The author would like to thank Ariane Desrosiers and Sarah Doctor for helpful research support on earlier drafts. Errors in the report are the responsibility of the author.
-
CGEP’s Visionary Annual Circle
-
Corporate Partnerships
Occidental Petroleum Corporation
Tellurian Inc.
Foundations and Individual Donors
Anonymous
Anonymous
Aphorism Foundation
the bedari collective
Children’s Investment Fund Foundation
David Leuschen
Mike and Sofia Segal
Kimberly and Scott Sheffield
Bernard and Anne Spitzer Charitable Trust
Ray Rothrock
Executive Summary
The decline of domestic fossil fuel production in the United States poses serious economic risks for communities that rely on fossil fuel industries for jobs and public revenues. Many of these communities lack the resources and capacity to manage those risks on their own. The absence of viable economic strategies for affected regions is a barrier to building the broad, durable coalitions needed for an equitable national transition to cleaner energy sources.
President Joe Biden touted investments into fossil fuel–reliant communities as part of his administration’s broader place-based economic and climate change strategies. This study assesses those federal efforts, examining the rationale, design, and implementation status of the major programs involved.
The study’s findings can be summarized as a series of contrasts:
- Unprecedented funding, limited delivery.Major federal legislation in the early 2020s authorized support for fossil fuel–reliant communities at a scale that dwarfs prior efforts. However, actual disbursements remain a small share of authorized funding for many programs, and available data offer limited evidence that spending has effectively targeted these communities. Lengthy implementation processes were followed by significant policy reversals by the Trump administration.
- Broad program portfolio, critical gaps.Federal support spans a wide portfolio of programs, including clean energy and manufacturing incentives, remediation of legacy infrastructure, public infrastructure investments, and general economic development initiatives. While this breadth reflects the diverse challenges these communities face, the portfolio was shaped more by national legislative priorities than by a bottom-up assessment of local needs, resulting in notable gaps, such as fiscal stabilization for local governments facing steep revenue losses.
- Focus on immediate distress, neglect of long-term risks. Programs largely concentrate resources in communities already experiencing economic distress, particularly those affected by coal mine and power plant closures. This approach may be an efficient use of limited resources, but it leaves many fossil fuel–reliant communities, such as oil and gas–reliant regions, exposed to future risks.
- Greater transparency, insufficient data. The federal government took strides to improve transparency, including making available the open-source dataset on federal spending used in this study. But without more granular and reliable data on both spending and economic outcomes, researchers cannot rigorously evaluate program effectiveness, compare approaches, or help policymakers scale successful models.
Taken together with the existing literature, these findings point to several priorities for a future federal strategy to support fossil fuel–reliant communities, including the following:
- Provide sufficient resources and capacity to regions facing both short-term and long-term economic risks from the energy transition, while enabling local communities to tailor solutions to their own specific challenges, opportunities, and preferences.
- Embed into policies data transparency, rigorous evaluation, and mechanisms for program adjustments based on iterative learning.
- Where possible, design programs to be durable and resilient to changes in political control, such as by securing bipartisan support.
