Canada’s Oil Boom Constrained By Workforce Shortage

While $100 oil incentivizes increased production in Canada’s crude-producing province of Alberta, the ramp-up of production is being held back by an issue all too familiar to the U.S. shale patch—there are not enough skilled workers to employ.

During the 2020 slump induced by the pandemic, the industry lost a lot of jobs, and many of the workers previously employed in oil and gas in Alberta have now moved on to other sectors of the economy, seeking stability, which is a rare and short-lived occurrence in today’s oil market.

“The pool that we relied on have moved to other occupations — trades, construction — and have found other employment elsewhere, whether in Western Canada, or have moved back home to jurisdictions that we had traditionally recruited from, like Central Canada and Eastern Canada,” Mark Scholz, president and CEO of the Canadian Association of Energy Contractors (CAOEC), told Julia Wong of CBC News.

At the end of last year, CAOEC had expected that a total of 6,457 wells were expected to be drilled in Canada in 2022, which would be an increase of 1,363 from the 5,094 wells planned for drilling in 2021.

The number of total jobs was to stand at 34,925 this year, an increase of 7,280 jobs in the Canadian oil patch compared to 2021, the association representing Canada’s energy service contractors operating close to the wellhead said in its Q4 2021 and 2022 Drilling Forecast. Back in November, CAOEC expected that the biggest risk to CAOEC’s forecast was going to be labor constraints. After years of lows, CAOEC members struggled in 2021 with crew constraints due to labor shortages, hampering the sector’s ability to meet growing demand, the association said in its forecast in November.  

This year, after the Russian invasion of Ukraine, Canada said it expects to boost its crude oil exports as Western importers turn away from Russian oil. Meanwhile, as oil prices remain high, a growing number of Canadian producers are considering production increases.  

By Charles Kennedy for Oilprice.com

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