The oil and gas sector can provide more than 1,00,000 jobs during this year

Oil-dependent cities such as Calgary, Houston and Stavanger are struggling as oil prices have seen record declines but they halt the coronavirus epidemic oil production.

Natural Energy News: The oil and gas sector is still not facing a price crunch - it is also facing a shortage of jobs.

According to a report released on Monday by Deloitte on the future of work in the sector, the oil, natural gas and chemical industry in the US eliminated 107,000 jobs between March and August this year. "The fastest rate of layoffs in the history of the industry," the report said — a notable pace even for an area renowned for its sky-high booms and punishing busts.

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In fact, it is part of the problem. According to the study, since 2014, Saudi Arabia declared a price war to try to protect market share from the boom, with the effect on sector workers becoming more extreme, the study found.

Deloitte said that between 2014 and 2019, a one-dollar swing in oil prices affected 3,000 explorations, production and oilfield services jobs. Above 1,500 jobs in the 1990s, when rising oil prices also added large-scale jobs. In the first decade and a half of the middle years of the 2000s, jobs were highly price-sensitive, the report notes. But because oil prices were rising, those jobs were being added, rather than taken away.

But this time, many jobs are expected to be lost and they will return soon. If oil hovers around $ 45 per barrel - at the moment, it is down - 70% of those jobs will not return before the end of next year, the report estimated.

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The forces weighing on oil prices are immediate - at risk for economic growth and for political stability in the US - and long term. Last week, S&P Global estimated that changing consumer patterns from the pandemic (thinking about working from home), and the economic impact of the pandemic, meant that long-term demand for 2.5 million barrels of oil per day was lost. It also created warnings from the CEO of oil and gas itself that the demand for oil may be at its peak - or that it is already at its peak.

Add to this that transformational change is introducing the oil and gas sector, particularly in Europe. Shell, BP, Total, Equinor, and other major European heritage energy companies have committed to reaching "net zero" emissions by 2050. This process has to happen quickly, and so far, it comes with billions of dollars in write-offs and announcements. Around 20,000 job losses from BP and Shell alone. (Whether this is actually due to a net-zero change, or simply a drop in oil prices - or, more likely, both is a matter of debate.)

Near retirement

This change simply does not mean, as is initially evident, massive job cuts. The Deloitte study also raises questions about how companies' recruitment efforts will adapt to make these changes work. Those employees typically look like relatively young people, with the type of technical and mathematical skills that can help direct the mass digitization that will need to happen with a low-carbon makeover. (Renewable energy networks are, by their nature, more digital and complex, as U.K.'s national grid is detected during the lock.)

There are some problems here. The current workers of many sectors are close to retirement. An oil and gas job search study from last year shows that Deloitte estimated that about 50% of the workforce is "tenured", with the majority retiring within the next five to seven years. Whether in job cuts or after retirement, the sector faces a huge loss of institutional knowledge in the coming years.

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Meanwhile, even for "traditional" oil and gas jobs, the abilities channel has limited. The data cites that university graduates such as Geology and Petroleum Engineering decreased between 15% and 21% between year 2015 and year 2019.

And in order to attract the same kind of oil and gas worker, both participate in fierce competition from tech companies with the same skills, but employees also worry about "continuity" —in other words, youth Resistance from people to work for energy companies An age of climate change.

Training the current workforce to adapt to these new types of jobs - and limiting the punishing waves of job losses - may be the most obvious option, and there is evidence that companies like Shell are doing so.

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But he invests, in times of a tight profit, with lots of competitive demands, where the money should be put. Clean energy investment by oil and gas companies, for one, is still on an incredibly low base: Deloitte puts it at 1% to 2% of capital investment in 2019, a figure cited internationally by the International Energy Agency Has also been done. Revenue still rests on making such an investment. Even a reposing oil company is still dependent on oil prices, as Shell CEO Ben van Bearden admitted earlier this week.

Impact on oil cities

It is a vicious cycle that affects not just oil and gas companies, but the entire region from Houston to Calgary, Alberta.

"The [oil, gas and chemicals] industry is often held to a painful succession of brutal price cycles and over-capacity," the report's authors said — and this leads to long-term losses in the field.

"This time appears in the way of advanced efforts to enhance strength, functional skill and workforce for the growth of the industry," the authors said.

Naysayers may report the "new normal" portion of the sector's cyclicality, the report notes: in other words, another stir before the boom.

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But companies that now see the challenge warned and actually pushed to adopt change, which will eventually be an industry race, could be an important start.

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