No way around labour shortage

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Oilpatch companies already struggling to meet their labour needs have received an ominous warning from the Petroleum Human Resources Council of Canada: they ain’t seen nothing yet.

The council is projecting that the domestic petroleum industry could require as many as 130,000 additional workers by 2020, including 102,000 in Alberta. Even under its most pessimistic of forecasts — with low oil and gas prices and very little capital investment — the council anticipates that another 39,000 workers will be needed, with 33,000 of these Alberta-based.
These conclusions are contained in a Petroleum Human Resources Council of Canada report entitled The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020.
“There’s no way around it, Canada’s petroleum industry will struggle to find the workers it needs over the next 10 years,” said Cheryl Knight, the council’s executive director and CEO, in a release.
“Not only will we need to replace thousands of our most skilled and experienced workers, but (we’ll need to) prepare for future growth as well.”
Workers leaving the industry will account for much of the job growth, said the report, with age-related attrition expected to open up 45,800 to 54,000 positions.
Bruce Thiessen, CEO of High Arctic Energy Services Inc., told the Advocate last month that manpower was his Red Deer-based company’s biggest challenge.
“We’ve got equipment sitting at the fence right now that I could have utilized throughout this year, but just couldn’t get to because of the people situation.”
And earlier this year, Essential Energy Services Ltd. CEO Garnet Amundson said labour constraints were holding his company to an equipment utilization rate of about 65 per cent.
“Our industry, with the types of services we provide, should be able to operate up to about an 85 per cent utilization. So there’s about a 20 per cent utilization gap that we would like to fill, but can’t find enough good people.”
Charles Strachey, regional communications manager for Alberta Employment and Immigration, said energy companies are becoming more aggressive in their hunt for workers. One third of the employers booked for an April 6 job fair at his department’s Red Deer office are from that sector.
The Petroleum Human Resources Council of Canada report said that approximately 171,000 people worked in the petroleum sector in 2009. Services accounted for more than 80,000 of these, with exploration and production employing 66,000, and the oilsands another 12,000. Workers in the pipeline and offshore sectors made up the balance.
The council’s report anticipates that available jobs in the services sector will increase by between 18,100 and 72,000 by 2020, with exploration and production needs jumping between 7,400 and 36,700, and oilsands positions between 9,000 and 14,900.
The need will be greatest in Alberta, said the report, which ironically could deter prospective workers from moving here.
“History has shown that significant growth in industry activity and resulting labour demand drives up inflation and the cost of living, which in turn can be a deterrent to attracting workers.”
Workers of all types will be needed, said the report, but some vocations will be in greater demand than others. These include oil and gas drilling and services field workers and supervisors; heavy-duty equipment mechanics, industrial electricians, instrumentation technicians and millwrights and machinists; engineers; steam-ticketed operators; geologists and geophysicists; production accountants; drilling co-ordinators and production managers; and landmen and purchasing agents.
The report recommends a number of measures be minimize the impact of the labour crunch. These include the industry communicating its labour needs to government and post-secondary and training institutions; sourcing workers from diverse labour pools; increasing the emphasis on employee retention and training; seeking innovation and technological advancement; and collaborating within the industry.
“Labour supply to ensure sustainable expansion of Canada’s petroleum industry will take diversification, development and collaboration.”
hrichards@reddeeradvocate.com

 

 

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Alberta's oilsands: investment, jobs and prosperity

Image via WikipediaBy Harvey Enchin
Source: The Vancouver Sun

Here's my take on the oilsands, which appeared as an editorial in The Vancouver Sun Nov. 24, 2010.
World energy consumption of oil, natural gas, coal, nuclear energy, and hydroelectricity fell by 1.1 per cent last year, the first decline since 1982. But environmentalists might want to postpone their celebration. The decline was the result of recession, not conservation, mainly affecting North America and Europe. Energy use soared in developing nations; indeed, it doubled in China, with oil retaining its position as the No. 1 energy source.
Once the economic recovery gains momentum, energy-consumption growth should resume its vigorous ascent.
This is good news for Canada, and particularly for Alberta and British Columbia, which are blessed with bountiful reserves of oil and natural gas. Of course, the main repository of wealth is Alberta's oilsands, which have drawn global energy companies en masse to Fort McMurray and environs.
Their plans include hundreds of billions of dollars in investment, generating an estimated $1.7 trillion in economic activity and 465,000 direct and indirect jobs over the next 25 years.
From the past decade through the next, the oilsands are expected to contribute $800 billion to gross domestic product and $123 billion to provincial and federal governments through royalties and taxes.
A single company, Total E&P Canada, a unit of Total SA of France, has interests in five major oilsands projects and intends to invest $15 billion to $20 billion in the Alberta economy. By itself, Total's 75-per-cent stake in the Joslyn North Mine Project will require direct capital investment of $7 billion to $9 billion. Total has 280 people in its Calgary office today but figures that number will rise to 1,300 over the next 10 years.
When president Jean-Michel Gires popped into Vancouver recently, he wasn't sightseeing. He was recruiting. With a population of only 3.6 million, he explained, Alberta cannot supply all of the labour needed to develop the oilsands. Even today, people from all over Canada, and abroad work at the oilsands with Ontario accounting for 20 per cent of the approximately 250,000 direct and indirect jobs to date.
And what kind of jobs are on offer? According to Statistics Canada, the average gross weekly earnings of non-farm payroll employees in Canada amounted to $860 as of August 2010. The average weekly earnings in the mining and oil-and-gas-extraction industry were $1,801. In other words, these are jobs that pay roughly $100,000 a year.
To aid its recruitment efforts, Total funds scholarships and research partnerships at universities, including the University of B.C.
The oilsands are crucial to North American energy security, a fact that U.S. President Barack Obama occasionally forgot in his recent rhetoric about "dirty oil." Canada already delivers the equivalent of 2.5 million barrels of oil and petroleum products a day to the U.S., making it by far the country's single largest supplier.
The oilsands represent a long-term commitment from the many domestic and international players developing the resource. Despite all the noise about "green" energy, fossil fuels will be the dominant energy source for many decades to come. In fact, Alberta's reserves are measured in centuries.
All of this translates into a promising and prosperous future of well-paid jobs, revenue for governments to pay for health, education and social programs, and abundant energy to fuel Canada's economic growth.

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