The reality of lower oil prices is transforming how oil and gas companies must approach labour, new research shows. The studies were released by PetroLMI, a division of Enform, which is an oil and gas industry advocate and safety association.
The first study, Workforce Insights: Impacts of the Oil and Gas Downturn on the Future and the Attitudes of Workers, surveyed nearly 900 respondents. It concluded the amount of oil and gas workers is shrinking as many displaced employees leave the industry in search of other work.
There is also a growing negative image of the oil and gas industry that is steering new workers away from it.
According to the study, as oil prices have begun to modestly stabilize, large numbers of highly specialized, educated and skilled workers remain unemployed in sectors that are beginning to rebound creating a labour crisis.
The struggle to stay afloat during the downturn as well as rapid improvements in technology have also played a role and were researched in another study titled Labour Productivity in Canada’s Oil and Gas Industry: A Discussion of Historical Trends and Future Implications.
This report, the first of its kind, found labour productivity declined by about six per cent during the period from 2010-2014 when oil prices were high, but increased significantly to 32 per cent during 2015 and 2016, corresponding with the significant drop in oil prices and capital spending and additional oil moving into production.
A modest increase of approximately two per cent is expected over the next five years, along with a modest recovery in capital spending, the study finds.
Cameron MacGillivray, Enform CEO, explained the research is showing that going forward this will have a dramatic impact on how oil and gas work is done and what sort of skills it requires.
"A lot of it is the digitalization of the industry’s information," said MacGillivray, explaining that the days of workers physically visiting wells are coming to an end as much of well monitoring is becoming automated.
In addition, technology is also making the actual drilling process automated, requiring fewer people on the drilling floor. Companies like Suncor are experimenting with driverless equipment as well.
This will not only reduce the amount of people required in the industry, but the kind of skills required as well, he added.
"The impact will be seen in fewer drivers, but we will be needing more people with software skills," he said.
He explained going forward the industry will need to begin working closely with educational institutions and other stakeholders to ensure workers with the right skills will be available.
In the meantime, things have already been changing.
MacGillivray noted that commodity prices have caused massive labour cuts — a 25 per cent reduction in some areas.
"The workforce has shrunk significantly," he said, adding many have moved on to other places and careers and are not eager to return.
"To bring them back when you maybe are still uncertain is a very tough thing," he said.