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Energy Law – Ever Evolving and Generating Jobs

The State of the Energy Industry

In Energy Law: Fueling a Dynamic Legal Career, Volume 4 of our 18-volume 21st Century Legal Career Series (available from Amazon.com https://www.amazon.com/s?k=Energy+Law%3A+Fueling+a+Dynamic+Legal+Career&ref=nb_sb_noss and the National Association for Law Placement https://www.nalp.org/productdetail/?productID=220), we cited six factors that were transforming energy law from a niche practice confined to a narrow geographic area (the “oil patch”) into a wide-ranging, global  endeavor:

1.Energy Independence after 70 years of over-reliance on oil imports from the uncertain Middle East.

2.Technological Innovation such as new oil and gas drilling technologies that make it cost-effective to extract these fossil fuels from formerly uneconomical repositories.

3.Elimination of Export Restrictions on oil that had been in place since the energy crises of the 1970s.

4.Surging Natural Gas Production due to price competitiveness and environmental advantages over coal.

5.Authorization for New Nuclear Power Plants following an almost four-decade moratorium on new construction.

6.Rise of Cost-Competitive Renewables.

These factors were—and with the exception of number 5-nuclear—to a great extent still are fueling a surge in demand for both mainstream energy attorneys and lawyers interested in JD Advantage careers in the energy industry. The U.S. is now the undisputed world leader in oil and natural gas production. Technological refinements and innovations keep “refreshing” the industry and driving down costs. U.S. companies are building more pipelines and port-based storage terminals in order to meet increasing export demand. Power plants are accelerating coal-to-gas conversions. Renewables such as wind and solar are substituting for fossil fuels throughout the country. The only factor that has not continued to influence legal job opportunities is the nuclear revival, stalled by concerns raised by the 2011 Fukushima Daiichi reactor accident and its aftermath.

New Job-Creating Factors

Energy law is a practice area that ranks as one of the most sensitive to both technological advances and especially geopolitical events. A number of these have significantly impacted the legal job market since publication of our Energy Law profile:

Electricity Storage Breakthroughs. One of the biggest hurdles that renewables such as wind and solar have had to tackle is intermittency, i.e., the fact that that sun does not shine and the wind does not blow all the time. Now that obstacle is quickly being overcome by dramatic advances in battery storage, led by lithium ion batteries. While government has been ideologically reluctant to seed battery storage R & D, the private sector has leaped into the void and poured billions into developing this technology.

What that means is that the road ahead for renewables is very positive, Making it even rosier are the declines in unit prices for wind and solar, which are now cost-competitive with fossil fuels.

The “Smart” Grid. As recently as a few years ago, there was a great deal of hand-wringing about the age and deterioration of our national electric transmission systems and the fact that government was slow to react to this vital infrastructure need. Utilities, however, could not just sit passively and wait for government to act. They have not. Advancements in the smart grid space have been quietly moving forward and impressively so.

With power and transmission companies taking the lead, demand for legal talent to assist in this effort is rising.

Deregulation. The Trump administration has revoked or opted not to implement a growing number of energy regulations. Absent compliance costs, energy companies have freed up funds to invest in new technologies and hire new staff, including lawyers. The only energy sector where legal hiring is actually declining is coal, the ironic focal point of the administration’s energy policy and strategy.

International Oil Insecurity. Ongoing turmoil in the Middle East and Venezuela has roiled international oil markets and jeopardized supplies, primarily with respect to Western Europe. This is creating opportunities for newly energy-independent America to develop those markets. That translates into transactional and regulatory job opportunities for U.S. lawyers.

Price Elasticity. Rising oil prices historically mean more legal jobs in the energy industry. Unlike products for which substitutions are readily available when prices rise, oil does not behave that way because it is essential for a huge majority of people who drive cars that rely on its availability. Pump prices of gasoline have increased 28 cents a gallon (national average) in just the last month (April-to-May 2019). A consistent indicator of this direct relationship is the history of hiring and downsizing at the American Petroleum Institute https://api.org, the pre-eminent energy trade association. When oil prices rise, hiring does too. When prices go down, hiring declines, sometimes so much that it results in layoffs.

Look for energy practice to keep growing, especially in the renewables sector.