Employees worldwide are receiving mixed information about the outlook of oil and gas jobs as some experts believe the current geopolitical situation will drive employment figures up while we're also seeing jobs being cut. With an eventual green transition looking inevitable, many are worried about their jobs, but as the OPEC and other countries boost their oil output, will we see growth in the oil and gas job market before the eventual decline? The pandemic led to hundreds of thousands of oil and gas jobs being cut worldwide, as demand for crude plummeted and many energy firms went bankrupt. But with demand back to pre-pandemic levels and huge investments being pumped into oil and gas - ahead of a green transition - the job market is expected to improve. Oil and gas employment in the U.S. is expected to expand by 12.5 percent in 2022, according to a Rystad energy report, adding between 100,000 and 125,000 jobs across the sector.
As the global price of oil continues to increase, operators across the U.S. look to increase investment to around $90 billion a year by 2027. As energy firms across the U.S. boost production to meet the growing global demand, especially in response to sanctions on Russian oil, the need for engineers and other skilled oil workers is clear. Although rising inflation will somewhat restrict job market growth.
In the spring, when the need to increase U.S. oil production in the face of global shortages became evident, operators quickly found they were unable to ramp up production due to the lack of workers. Having laid off thousands of workers during the pandemic, many oil and gas firms were slow to rehire.
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A lot of workers have simply been scared away from the industry, believing that companies turned their backs on workers during a difficult time. Many that lost their jobs came to acknowledge that they would have to change the industry to find sustainable employment, as a global transition away from fossil fuels to renewable alternatives takes hold. Andy Hendricks, CEO of Patterson-UTI Energy, explained "At a job fair in a place like San Antonio, pre-COVID, maybe 200 people would show up. Now it's 50 or 100."
In Canada, the CEO of Peyto Explorations and Development Corp., Darren Gee, said "We probably would increase the capital budget this year if we could get people." He highlighted the lack of experienced workers available to support the expansion of operations, particularly as several universities drop their oil and gas engineering programmes due to a shift in the energy outlook and a decrease in demand for such degrees. This would suggest it's a workers' market, allowing new employees to demand better salaries and conditions.
However, just last month, oil and gas jobs fell in Texas as the state cut 1,600 jobs in exploration and production and oil field services. Jobs in the sector have been steadily rising, with Texas adding around 7,500 since this time last year. But it is unlikely that the industry will return to pre-pandemic levels in terms of employment due to greater digitalization and the automation of operations. Oil output in several parts of the U.S. is now back to 2020 levels, but employment remains lower than before the pandemic.
In the U.K., workers are facing fears of the transition to renewable energy and a reduction in oil and gas operations. With the government's target to reduce carbon emissions to net-zero by 2050, and aiming to get 100 percent of the country's electricity from renewable sources by 2035, it is clear that a shift in the energy market is coming within the next decade. This means that thousands of oil and gas jobs will be cut in the coming years, and workers are preparing themselves for this inevitability by looking for other opportunities.
But the outlook is not all bleak, as many of the workers in the North Sea are highly trained, thanks to several specialist degree courses available at Scottish universities, meaning their skills may well be transferable. Although many jobs will be lost in the oil and gas industry, workers may be given other opportunities as renewable energy developments increase. Although the demand for renewable energy workers will likely be less than that of the oil and gas industry in its prime.
While experts are hopeful about the oil and gas job market picking up in the next few years, the long-term prospect for oil and gas workers is uncertain. Greater automation and a shift to renewable energy will likely mean a decrease in positions in the fossil fuel industry. While some may be able to transfer their skills to green energy operations, others will be forced to retrain or look for jobs in other sectors. In addition, it is unclear whether workers will respond to the recent rise in opportunities across the sector, knowing their employment may well be temporary.
By Felicity Bradstock for Oilprice.com
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Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK. More