How Place-Based Investment & Clean Energy Power Economic Turnaround in Fossil Fuel Regions

The Brookings research provides an in-depth profile of how regions with high concentration in fossil-fuel industries—termed “carbon-specialized”—have fallen behind in key economic metrics over the last decade. These decline trends include job losses of up to 45–48% in industries like coal mining, oil, and gas extraction between 2014 and 2021, especially in metro areas with high employment location quotients (LQs) in those sectors. Such regions have also earned lower marks in productivity, standards of living, and wage growth compared to national averages.

Recent data corroborates both the ongoing decline and the emergence of countermeasures. The U.S. Bureau of Labor Statistics (BLS) reports 575,700 U.S. jobs in the combined mining, quarrying, and oil and gas extraction sector as of February 2025, a drop of 7,700 jobs from the previous month. Separately, clean energy generation jobs (wind, solar, hydro, geothermal, nuclear) increased 44.2% between 2021 and 2022, whereas coal-fired power generation jobs dropped nearly 10%, underscoring the growing divide between clean vs. carbon-intensive energy sectors.

Federal programs like BBBRC have been central to regionally focused economic transition efforts. Their implementation has enabled coalitions—often including universities, community colleges, state/local governments and NGOs—to reimagine industry clusters suited to each region’s unique assets. In Tulsa, the regional strategy leverages advanced mobility and aerospace; in southern Louisiana, the focus is on green hydrogen and port infrastructure; and Oklahoma City is growing its biotech ecosystem. These are not only about diversifying industry, but embedding equity by including displaced workers, HBCUs, and historically marginalized communities.

DOE’s H2Hubs program shows the federal government actively investing in decarbonizing infrastructure at scale. For example, the Gulf Coast Hydrogen Hub (“HyVelocity”) and Midwest H2Hub received initial tranches of ~$22 million each out of much larger federal cost-share commitments ($1.2 billion for Gulf Coast; $1.0 billion for Midwest) and project lifetime job creation estimates of ~45,000 and ~12,000 direct jobs respectively. These hubs aim to leverage existing energy infrastructure, supply chains, pipelines, ports, and human capital in regions already engaged in energy production.

Nevertheless, open questions remain. The trajectory of coal—both in production and employment—is uncertain, including under administrations shifting policy priorities. Also, scaling cluster strategies requires steady multiyear investment and improved absorptive capacity in displaced-worker regions. Crucially, it is yet unclear if employment growth in clean energy sectors can adequately reach and benefit workers in carbon-specialized metros, and whether job losses in fossil sectors can be offset at similar wage levels.

Strategic implications for investors, policymakers, and regional development actors include:

• Target investments in regions with latent assets—e.g. infrastructure, educational institutions, specialized labor—that can be adapted to clean industries.
• Ensure funding programs are large enough and long-lasting, reducing risk of disruption from political change.
• Design workforce development models that both upskill displaced fossil fuel workers and lower entry barriers for historically excluded populations.
• Prioritize multisector collaboration to knit together government, private sector, nonprofits, and educational institutions.
• Stay attuned to energy policy shifts—particularly around hydrogen hub funding, clean energy incentives, and environmental regulation—that can significantly affect transition pathways.