Return of oil and gas jobs? New pipelines and new technology are essential conditions

The headline of a Calgary Herald story on March 30 warns: “ Another 8,700 oil jobs are at risk if prices drop below US$50 for a sustained period, according to new study” .  Based on a labour market study by Enform consultancy,  the Herald states that this possible job loss would follow the loss of 52,500 direct jobs between 2015 and 2016, without even taking into account the job turmoil caused by the 2017 mergers and acquisitions in the Canadian oil sands: Canadian Natural Resources and Shell  ; Cenovus Energy and Conoco Phillips; and most recently, Enbridge and Spectra Energy  .

oil sandsThe original Enform study on which the newspaper article is based provides much more detail.  Labour Market Outlook 2017 to 2021 for Canada’s Oil and Gas Industry  was prepared by PetroLMI, a Division of Enform, and was partly funded by Canada’s Sectoral Initiatives program.  It reports that the oil and gas industry directly employed an estimated 174,000 workers at the end of 2016, (down by 25 per cent from the industry peak of over 226,000 in 2014). It forecasts job growth for two different scenarios – oil prices well above or well below  US$50 per barrel from  2017- 2021 .  The “modest recovery” scenario, (prices above US $50) ìs forecast to support an annual average of 554,000 direct and indirect jobs in the next five years; the “Delayed Recovery” is forecast to support 508,000 jobs.  The report provides detailed statistics by subsectors, occupations, and regions.  The report also notes the shrinking labour pool, as workers are discouraged from remaining or entering the sector, and as older workers retire.  Although the forecast expects limited job recovery in the next two years, it concludes that the peak employment levels will not return.  “Heading towards 2021 and beyond, accessing world markets via new pipelines will be critical for full job recovery. Equally important will be investing in technology, innovation and a highly-skilled and technical workforce to sustain the productivity and efficiency gains achieved in the last few years. These things will be critical if the industry is to compete globally and make a transition through carbon regulations.”  See the full suite of forecasts for the oil and gas industry, including the LNG industry, here .

 

 

U.S. State Department Releases New Jobs Estimates for Keystone XL Pipeline

The U.S. State Department released the Draft Supplemental Environmental Impact Statement for Keystone XL on Friday March 1, making no recommendations for or against approval of the pipeline project. A 45-day period has commenced to allow for public comments, with a final supplemental environmental impact statement to be released before a government decision, expected no earlier than Summer 2013.

Although mainly assessing environmental impacts, the report includes a socioeconomic section which provides new data: a wider view of impacts (including housing, public services support, fiscal revenues and private property valuations), and more detailed estimates about job creation and earnings impacts. According to the new estimates, 42,100 indirect jobs and 3,900 direct jobs would be created during the one- to two-year construction period, but the ongoing operation of the pipeline would only support 35 permanent and 15 temporary jobs, mostly for inspections, maintenance and repairs.

Natural Resources Minister Joe Oliver summed up the Canadian government position on the Keystone XL pipeline when he traveled to Houston Texas on March 6 to address the Huston oil workers. He stated: “The oil sands generate jobs and economic prosperity both in Canada and in the United States. Currently, oil sands production supports 63,000 American jobs per year. With expansion through Keystone and other projects, the oil sands will support tens of thousands more on both sides of the border.”

LINKS

Draft Supplemental Environmental Impact Statement for Keystone XL is available in a series of PDF files at: http://keystonepipeline-xl.state.gov/draftseis/index.htm

Detailed Socioeconomic estimates, including employment and earnings, are published in Section 3.10 at: http://keystonepipeline-xl.state.gov/documents/organization/205641.pdf and Section 4.10 at: http://keystonepipeline-xl.state.gov/documents/organization/205612.pdf

All documents related to the project are posted on a dedicated State Department website at: http://www.keystonepipeline-xl.state.gov/

Reactions to the statement from:
TransCanada Pipeline http://www.transcanada.com/6209.html;

National Resources Defence Council (U.S.) at: http://switchboard.nrdc.org/blogs/sclefkowitz/keystone_xl_tar_sands_pipeline_7.html;