Biotech didn’t do it. Health services hasn’t done it. Nor has academia. But what if the burgeoning wind industry could finally close the racial wealth gap in Massachusetts — or at least make a dent?
In the next few decades, Massachusetts will create, almost from scratch, a new industry. Vast farms of turbines are expected to populate the offshore area, while onshore, transmission lines and storage facilities will support the industry. There will be jobs — thousands of them, jobs that never needed to exist before — and tens of billions of dollars likely flowing in a sector that currently only hints at what it will be.
Steering some of that financial windfall toward communities of color could help counter years of systemic racism and missed opportunities in a region where Black residents’ net worth — recently gauged at just $8 — is a fraction of white residents’, say minority business development and advocacy organizations.
“Let’s use this as an opportunity to change the paradigm,” said Peter Hurst Jr., president and chief executive of the Greater New England Minority Supplier Development Council Inc. “Let’s structurally change the way things are done.”
Late last month, Hurst and a group of dozens of advocacy and business organizations had the chance to pitch that potential to the four offshore wind developers looking to bid on a new project in the state. At a Zoom event hosted by the Environmental League of Massachusetts, the message was clear: Ensuring inclusion now could mean that the future wealth from this industry will be spread equitably.
And so this opportunity, they say, is too important to miss.
The new wind project will be the third in the state — following Vineyard Wind and Mayflower — but at 1,600 megawatts will be the size of the other two projects combined.
When Massachusetts sought bids for the earlier projects, it did not include workforce diversity in its requirements.
“We’ve been hoping that offshore wind would create jobs for gateway communities for quite a while, and we’ve fallen short,” said state Senator Michael Barrett. “I don’t think the job-creation piece has lived up to our expectation.”
But now, there’s a new tool in the toolbox: The Department of Energy Resources earlier this year changed the way it is grading this offshore wind bid, so it is now based, in part, on how the companies plan to address supplier and workforce diversity and inclusion.
And this project is just the beginning. Meeting the goal of net-zero carbon emissions in Massachusetts by 2050 means a steep ramping up of offshore wind, and it is projected the state will need at least 15 gigawatts by then. As minority business organizations push for diversity and inclusion in the process, they are hoping that this next project will be a blueprint for projects down the line.
The four companies vying for the contract — Equinor and Ørsted, in addition to Vineyard Wind and Mayflower — have until September to submit bids, and Governor Charlie Baker is expected to announce a decision before the end of the year. At the recent event, representatives of the four companies met with representatives from 17 business and advocacy groups for people of color to talk about the potential for diversity in offshore wind.
“This project is a really big deal,” said Elizabeth Turnbull Henry, president of the Environmental League of Massachusetts. “It represents between four and five billion dollars in capital expenditure and is expected to generate between six and nine billion dollars in revenue over the project’s lifetime . . . It will create thousands of jobs with ripples of economic activity across the Commonwealth.”
Vineyard Wind, the first commercial-scale offshore wind project to get fully permitted, has estimated that its 800 megawatt project will create roughly 4,000 job-years (a job-year is calculated as one year of work for one person.) The project that is currently out for bid is twice that size, and while the actual jobs will depend on the specifics of the project, Turnbull Henry said she estimates 6,000 to 8,000 job-years in Massachusetts from it.
Those jobs will take different forms, depending on the phase of the project, but will include engineers, ship crews and captains, researchers, scientists, and tradespeople. There will be companies that run tugboats, offer catering, and manufacture supplies.
“Historically, in past industries, there has been a wall, a system set in place, that has kept people out,” said Dana Rebeiro, who does community outreach and engagement for Vineyard Wind. “It’s very important that in this industry, we don’t bring that here.”
As each business group introduced itself to the developers, some also offered advice.
If the developers are going to really walk the walk of diversity, said Tanisha Sullivan, president of the NAACP Boston, they need to start at the top.
“I want to know who your lawyers are,” she said. “I want to know that as you are engaging with those firms that you are demanding, quite frankly, that your teams are diverse.” Same with business consultants, she said. “It’s a little bit more than just supplier diversity, but really paying attention to the business diversity writ large.”
If it’s a big ask to think that an industry can undo a stark racial wealth gap, it’s not unprecedented, said Shelley Stewart III, a partner at McKinsey & Co.’s private equity and principal investors practice.
In the 1980s and 1990s, the automobile and other heavy industries in the United States made a commitment to diversifying their supply chains, and it paid off.
“If you look at Black-owned firms now, there’s only one sector we could find where Black-owned firms were bigger or the same as non-Black firms, and that was in manufacturing,” he said. Their hypothesis is that the early commitment to supplier diversity is still playing out now.
Though the potential for wind to help spread wealth to overlooked communities is real, so is the chance that this turns into another missed opportunity.
“What the typical modus operandi is, they say, ‘Well, we couldn’t find anyone.’ And by then the train is way down the track,” Hurst said. “And everybody yells and screams, but at the end of the day, so what? Nothing happens.”
But with a new industry on Massachusetts’ doorstep and the new mandate that developers take diversity seriously, he’s hopeful. “We all have to think differently,” Hurst said. “We all have to think bigger.”