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Cost and Employment Impacts of Various Energy Technologies

Published by the Government Accountability Office on 1977-05-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             DOCUMENT RESUME

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[Cost and Employment Impacts of Various Energy Technologies].
EMD-77-42; B-118205. May 23, 1977. 3 pp.
Report to Sen. James Abourezk; by Elmer B. Staats, Comptroller
General.
Issue Area: Energy (1600).
Contact: Energy and Minerals Div.
Budget Function: Natural Resources, Environment, and Energy:
    Energy (305).
Organization Concerned: Energy Research and Development
    Administration.
Congressional Relevance: Sen. James Abourezk.
          Cost and employment impacts involved in the fuel cycles
of various energy technologies could not be compared on a
consistent basis needed for valid comparisons.
Findings/Conclusions: The following steps appear to be necessary
as a starting point to initiate the dialogue in developing a
basis for analyzing the cost and employment impacts of energy
technologies on a consistent basis: (1) the energy technologies
should be analyzed on a basis providing energy for the same
level of end use; (2) total employment impacts should be
estimated for both the technologies nd the industries which
support them; (3) differences in investments required to
generate each job should be determined; and (4) differences in
the nat ure and duration of employment should be determined. The
following basic elements are necessary in order to perform this
analysis: (1) a framework for transforming a raw material into
consumable energy under each technology considered; (2) data on
the co:   and employment requirements for each step of the
transformation; and (3) a common level of end use for the
technologies. Aside from providing a consistent basis for
comparing technologies independent of energy growth projections,
this framework makes it possible to distinguish between
short-term and long-term employment on a consistent basis. (SC)
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     B-178205

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     The Honorable James Abourezk
     United States Senate
                                                   in later discussions
           In your letter of March 3, 1977, and
                                                      from existing
     with your office, we were asked to determine              in the
                      cost and employment  impacts  involved
     l iterature the                                      identify  such
                                                      To
     fuel cycles of various energy techrologies.
                                                  studies  and  consulted
     impacts we reviewed numerous reports a;d
               and  research groups  in various Federal agencies and
     planning
                                              of energy systems,
     researchers familiar with evaluations
     trends, and policies.
                                                      estimate the cost
          Although some studies have attempted to
                                                         the impacts
     and employment impacts of energy technologies,
                              within  the context  of  a  projected
     primarily were analyzed                          technology in
                       demand and the  role of each
     growth in energy
                                   the-demand.    As a result, we
     meeting its assumed share ofand  employment impacts of these
     could not compnare the cost
     technologies on a consistent  basis  needed for valid comparisons.

                                              point to initiate the
           It seems to us that as a startinc        the cost and
      dialogue gin developing a basis for analyzing
                                                 on a consistent
      employment i.pacts of energy technologies
      basis, the following steps are necessary.
                                              be analyzed on
           -- The energy technologies should
              a basis of providing energy for  the same level
              of end use.
                                                           for
           -- Total employment impacts should be estimated
                                        tne industries which
              both the technologies and
              support them.
                                                  to generate
           -- Differences in investments required
              each job should be determined.

                                                     of
           -- Differences in the nature and duration
              employment should be determined.

                                                         and employment
            To aid in your further effcrts on the cost
                                        we developed a  methodolcgy
       impacts of energy technologies,
                                             taken.  The methodolcgy
       which should allow these steps to be
                                  basis  for comparison  by measuring
       would provide a consistent


                                                                                   EMD-77-42
B-178205



the production or conservation activities required under
different technologies to provide a fixed amount of energy for
a common end use.  In this way, one can better identify the
incremental cost and employment impacts of different energy
technologies.

     The following basic elements are needed to do the
analysis:

     --A framework for transforming a raw material
       into consumable energy under each technology
       considered.

     --Data on the cost and employment reauiremer'
       for each step of the transformation.

     -- A common level of end use for the technologies.

     There seems to be considerable agreement in describing
most technologies' eneray cycles and on many of the principal
assumptions related to them. This general agreement estab-
lishes a ramework which can be used to identify the material
flow and numbers of facilities in a typical or average energy
cycle.

     Data used in a number of recent studies of e:nployment
and capital needs for energy technologies were obtained from
the "Energy Supply Planning Model" prepared by the Bechtel
Corporation for the National Science Foundation, which is a
commonly used data base for employment and investment reauire-
ments.  These studies encompassed a broad range of opinion in
the energy area.  However, for those technologies it covers,
the Bechtel data base provides only a measure of direct
employment, not indirect employment.

     Total employment estimates are lacking for most of the
energy technologies researched.  A serious data gap identi
fied during our research was the absence of measures of
indirtt:ct employment.    Indirect employment is the employment
associated with the work done in the industries which supply
the required materials and services to an energy technology.
Accounting   for   indirect   mployment may or may not substantially
alter the relative impacts of different technologies.  Because
a study which comprehensively evaluated indirect employment
impacts would require a considerably greater investment in
time and money than an evaluation of direct employment impacts
only, we believe it is appropriate to analyze indirect employ-
ment only if other considerations are relatively in balance
and indirect employment iacts could be a significant factor
in decisionmaking.


                                   2
B- 178205



                                                    end use
     For the final element in the analysis, the
                                               most common to
selected should be the primary use which is
the technologies being compared.   The most common use for the
                                              heating.    It is
technologies we researched was residential
                                                    basis  of pro-
important to place the technologies on a common              con-
                                          use  in order   to
viding energy for the same level of end
                                       For example,    current
sider the total system requirements.
              require  a backup from another   energy source,
solar systems
                              The common  end  use approach
such as electricity or gas.
                                      backup   to be added to
would require the impacts of solar's
                                              the  break-even
the solar system requirements in comparing
                                         which  do  not require
point of solar with other technologies
similar backup.
                                                   comparing
     Aside from providing a consistent basis f(r
                             energy growth  projections, this
technologies independent of
                             to distinguish  between short-term
framework makes it possible
                                                      on a con-
(construction) and long-term (operation) employment
sistent basis.   For example, when employment is divided in
                                             identified in a way
this manner, direct emoloymelt impacts are
                                                 fluctuations
which highlights the possibility of employment
due to  construction.
                                                   to discuss
      We are making arrangements with your office
                                             its  application,
 in more detail the common end use approach,
 and limitations.


                                  S     5y   your     r      A



                                  Comptroller General
                                  of the United States




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