N. American oil companies scramble to find workers despite boom
© Reuters/DEEP WELL SERVICES
By Liz Hampton, Stephanie Kelly and Nia Williams
(Reuters) - When Jeremy Davis was laid off from his oilfield job in Texas in 2020, he did not want to leave the industry after 17 years in oil and gas.
But his next jobs brought one mishap after another. He was hospitalized for almost a week following a shift at a chemical manufacturing facility; another company he worked for never paid him, leaving him short $5,000.
"There comes a point and time where you also get extremely frustrated with the unpredictability and (lack of) stability," said Davis, 38, who now works in construction closer to his home and family near Austin, Texas.
Davis says he would be open to returning to energy, but for now, he is one of thousands of workers in the United States and Canada who have left oil and gas jobs, put off by arduous conditions, remote locations, and insufficient compensation, or lured to the renewables sector as the world transitions to cleaner energy.
© Reuters/DEEP WELL SERVICESFILE PHOTO:
DWS Hydraulic Completion Unit (HCU) crew performs a Natural Gas drill-out operation on a well location in Ohio's Utica Shale Basin
Governments are pushing oil and gas producers to increase output with prices hovering around $100 a barrel amid a worldwide supply shortage. The shortage of workers is limiting how much producers in the United States and Canada can increase oil output this year as governments try to find ways to offset the effect of lost Russian barrels following Moscow's invasion of Ukraine.
© Reuters/DEEP WELL SERVICESFILE PHOTO:
Governments are pushing oil and gas producers to increase output with prices hovering around $100 a barrel amid a worldwide supply shortage. The shortage of workers is limiting how much producers in the United States and Canada can increase oil output this year as governments try to find ways to offset the effect of lost Russian barrels following Moscow's invasion of Ukraine.
© Reuters/DEEP WELL SERVICESFILE PHOTO:
An overview photo of Deep Well Services based field employees working in the Snubbing basket of a 300K 15M Hydraulic Completion Unit (HCU), in Texas
Oil workers left the industry in droves after the COVID-19 pandemic started. Now, the U.S. unemployment rate has fallen to 3.6%, just a hair above the pre-pandemic low, but there are still roughly 100,000 fewer oil and gas workers now in the country than before the pandemic.
Oil industry employment in Canada has rebounded more swiftly, which has allowed workers to drive a harder bargain in negotiations for benefit and wage packages as companies try to maintain their workforce.
"At a job fair in a place like San Antonio, pre-COVID, maybe 200 people would show up. Now it's 50 or 100," said Andy Hendricks, chief executive of Patterson-UTI Energy, which is currently running about a sixth of the 695 drilling rigs operating in the United States.
His company may hire another 3,000 workers this year after hiring back 3,000 in 2021, and even has recruiters set up at a shopping mall in Williston, North Dakota, to find potential workers.
HELP WANTED
Canadian producer Peyto Explorations and Development Corp would drill more wells if they could staff more rigs, said CEO Darren Gee. Calgary-based Peyto produces 98,000 barrels of oil equivalent per day of oil and natural gas.
"We probably would increase the capital budget this year if we could get people," Gee said, adding that new workers often lack experience. He pointed to the University of Calgary's move to suspend its oil and gas engineering program last year as an example of why the industry is struggling for new talent.
The rewards of economic development are many: an increase in living standards, higher literacy rates, technological advances, longer lifespans, and greater wealth, among other benefits.
Historically, the fastest way to improve people’s lives is through the use of fossil fuels such as coal, natural gas, and petroleum, accessed through mining and drilling. Harnessing the power of these fuels accelerated with the advent of the Industrial Revolution, converting many of the world’s economies into industrial powerhouses from largely agrarian societies. It is only within the last century, with the rise of the environmental movement, that we have been made aware of the threat fossil fuels pose to the future of our planet. (These are 26 countries that consume more energy than they produce.)
Many countries, most of them developed nations, have taken steps to switch to cleaner energy sources. But some have not and continue to use fossil fuels to raise their standard of living.
To determine the 25 countries increasing emissions the fastest, 24/7 Wall St. reviewed data from two sources: the 2021 Global Carbon Budget published annually by the Integrated Carbon Observation System, a community of more than 500 scientists and 80 universities and institutes studying greenhouse gas concentrations and carbon fluxes worldwide; and the International Energy Agency’s Greenhouse Gas Emissions from Energy 2021 Edition report.
We ranked 25 countries, lowest to highest, on the percentage of their change in CO2 emissions from 2010 to 2020, using data from the Global Carbon Project. Data on CO2 emissions change from 1971 to 2020 and total emissions by country is also from the same source. Data on each country’s change in CO2 emissions per capita and GHG emissions are from the IEA report.
Of the 25 countries on our list, all but one is in either Asia or Africa. The lone exception is Guatemala in Central America. (On a more local basis, these are the cities that emit the most carbon dioxide in the world.)
Virtually all of them have some of the fastest-growing economies in the world. For many, like Equatorial Guinea and the Republic of Congo, development has depended on drilling for oil. It has also sometimes meant unfettered deforestation, an issue especially in nations such as Mongolia, where environmental laws and institutions are weak.
Most of the nations on this list are signatories to the Paris Agreement on climate change. Many have action plans to address sustainability and combat climate change. Their challenge is raising the economic well-being of their citizens while being guardians of the health of the planet.
Employment in the U.S. oilfield services and equipment sector was nearly 609,000 in March, the highest since September 2021, but still below pre-pandemic levels of about 707,000, according to the Energy Workforce and Technology Council.
Mark Marmo, CEO of Deep Well Services, an oilfield firm based in Zelienople, Pennsylvania, said fracking work in places like West Texas is currently delayed about two weeks to a month because of a lack of labor.
"We hired 350. If we could hire another 350, we'd put them all to work," he said.
In the mining and logging industries, which includes oil and gas work, an estimated 14,000 workers quit in January, the highest level since early 2020, according to data from the U.S. Bureau of Labor Statistics. About 13,000 workers were estimated to have quit in February.
"We've had companies in the Permian that have gone out and hired 100 new employees and within six months there's only eight to nine original employees still working," said Tim Tarpley, with the Energy Workforce and Technology Council, a trade group whose members include Halliburton Co and Schlumberger.
U.S. and Canadian production is anticipated to grow even with a tight labor market, but executives said output could surpass expectations if more workers were available.
In the United States, output is expected to grow by about 800,000 barrels per day (bpd) in 2022 to average 12 million bpd, the Energy Information Administration (EIA) forecast, short of 2019's all-time high of 12.3 million bpd. Canada's production, including natural gas liquids, is forecast to rise by 190,000 bpd to 5.75 million bpd, the EIA said.
COMPETING WITH AMAZON
Fewer skilled workers are willing to travel to the remote Canadian oil sands region for turnaround season, when thousands are needed for essential maintenance on oil sands plants, said Terry Parker, executive director of the Building Trades of Alberta, because companies no longer pay a big enough premium for the inconvenience.
Parker said oil sands labor rates ranged from C$30 ($23.78) an hour for less skilled work, to C$50 an hour for high-skilled workers like pipefitters, boilermakers and millwrights.
Unite Here, a union representing hospitality workers in industry accommodation camps, negotiated agreements for better overtime for workers at camps operated by Civeo Corp in the oil sands, the union's Canadian director, Ian Robb, told Reuters.
In March, the union also secured a wage increase of up to 22% for workers at an Atco Ltd camp serving the long-delayed Trans Mountain oil pipeline expansion project, according to a news release.
In Alberta, the average weekly wage including overtime for all employees in mining, quarrying and oil and gas extraction is up 7.3% since February 2020, according to data from Statistics Canada.
In the United States, hourly wages for production and nonsupervisory employees are currently about 5% higher on average than the year-ago level, and oilfield wages are due to rise about 10% for the year, according to oilfield consultancy Spears & Associates.
However, average hourly wages in the U.S. oil and gas extraction industry are still below pre-pandemic levels, currently estimated at $45.45 an hour for February 2022, versus $48.37 an hour in February 2020, according to the Bureau of Labor Statistics.
Patterson-UTI raised wages last year because of competition from retailers that historically paid less than the oil industry, Hendricks said.
"We're competing against Amazon hiring drivers, or Target with positions in air-conditioned warehouses. It's easier than a drilling rig in west Texas in the summer," he said.
Oil and gas workers leave industry in droves https://fingfx.thomsonreuters.com/gfx/ce/egvbkelekpq/Pasted%20image%201651180865162.png
Oil workers left the industry in droves after the COVID-19 pandemic started. Now, the U.S. unemployment rate has fallen to 3.6%, just a hair above the pre-pandemic low, but there are still roughly 100,000 fewer oil and gas workers now in the country than before the pandemic.
Oil industry employment in Canada has rebounded more swiftly, which has allowed workers to drive a harder bargain in negotiations for benefit and wage packages as companies try to maintain their workforce.
"At a job fair in a place like San Antonio, pre-COVID, maybe 200 people would show up. Now it's 50 or 100," said Andy Hendricks, chief executive of Patterson-UTI Energy, which is currently running about a sixth of the 695 drilling rigs operating in the United States.
His company may hire another 3,000 workers this year after hiring back 3,000 in 2021, and even has recruiters set up at a shopping mall in Williston, North Dakota, to find potential workers.
HELP WANTED
Canadian producer Peyto Explorations and Development Corp would drill more wells if they could staff more rigs, said CEO Darren Gee. Calgary-based Peyto produces 98,000 barrels of oil equivalent per day of oil and natural gas.
"We probably would increase the capital budget this year if we could get people," Gee said, adding that new workers often lack experience. He pointed to the University of Calgary's move to suspend its oil and gas engineering program last year as an example of why the industry is struggling for new talent.
The rewards of economic development are many: an increase in living standards, higher literacy rates, technological advances, longer lifespans, and greater wealth, among other benefits.
Historically, the fastest way to improve people’s lives is through the use of fossil fuels such as coal, natural gas, and petroleum, accessed through mining and drilling. Harnessing the power of these fuels accelerated with the advent of the Industrial Revolution, converting many of the world’s economies into industrial powerhouses from largely agrarian societies. It is only within the last century, with the rise of the environmental movement, that we have been made aware of the threat fossil fuels pose to the future of our planet. (These are 26 countries that consume more energy than they produce.)
Many countries, most of them developed nations, have taken steps to switch to cleaner energy sources. But some have not and continue to use fossil fuels to raise their standard of living.
To determine the 25 countries increasing emissions the fastest, 24/7 Wall St. reviewed data from two sources: the 2021 Global Carbon Budget published annually by the Integrated Carbon Observation System, a community of more than 500 scientists and 80 universities and institutes studying greenhouse gas concentrations and carbon fluxes worldwide; and the International Energy Agency’s Greenhouse Gas Emissions from Energy 2021 Edition report.
We ranked 25 countries, lowest to highest, on the percentage of their change in CO2 emissions from 2010 to 2020, using data from the Global Carbon Project. Data on CO2 emissions change from 1971 to 2020 and total emissions by country is also from the same source. Data on each country’s change in CO2 emissions per capita and GHG emissions are from the IEA report.
Of the 25 countries on our list, all but one is in either Asia or Africa. The lone exception is Guatemala in Central America. (On a more local basis, these are the cities that emit the most carbon dioxide in the world.)
Virtually all of them have some of the fastest-growing economies in the world. For many, like Equatorial Guinea and the Republic of Congo, development has depended on drilling for oil. It has also sometimes meant unfettered deforestation, an issue especially in nations such as Mongolia, where environmental laws and institutions are weak.
Most of the nations on this list are signatories to the Paris Agreement on climate change. Many have action plans to address sustainability and combat climate change. Their challenge is raising the economic well-being of their citizens while being guardians of the health of the planet.
Employment in the U.S. oilfield services and equipment sector was nearly 609,000 in March, the highest since September 2021, but still below pre-pandemic levels of about 707,000, according to the Energy Workforce and Technology Council.
Mark Marmo, CEO of Deep Well Services, an oilfield firm based in Zelienople, Pennsylvania, said fracking work in places like West Texas is currently delayed about two weeks to a month because of a lack of labor.
"We hired 350. If we could hire another 350, we'd put them all to work," he said.
In the mining and logging industries, which includes oil and gas work, an estimated 14,000 workers quit in January, the highest level since early 2020, according to data from the U.S. Bureau of Labor Statistics. About 13,000 workers were estimated to have quit in February.
"We've had companies in the Permian that have gone out and hired 100 new employees and within six months there's only eight to nine original employees still working," said Tim Tarpley, with the Energy Workforce and Technology Council, a trade group whose members include Halliburton Co and Schlumberger.
U.S. and Canadian production is anticipated to grow even with a tight labor market, but executives said output could surpass expectations if more workers were available.
In the United States, output is expected to grow by about 800,000 barrels per day (bpd) in 2022 to average 12 million bpd, the Energy Information Administration (EIA) forecast, short of 2019's all-time high of 12.3 million bpd. Canada's production, including natural gas liquids, is forecast to rise by 190,000 bpd to 5.75 million bpd, the EIA said.
COMPETING WITH AMAZON
Fewer skilled workers are willing to travel to the remote Canadian oil sands region for turnaround season, when thousands are needed for essential maintenance on oil sands plants, said Terry Parker, executive director of the Building Trades of Alberta, because companies no longer pay a big enough premium for the inconvenience.
Parker said oil sands labor rates ranged from C$30 ($23.78) an hour for less skilled work, to C$50 an hour for high-skilled workers like pipefitters, boilermakers and millwrights.
Unite Here, a union representing hospitality workers in industry accommodation camps, negotiated agreements for better overtime for workers at camps operated by Civeo Corp in the oil sands, the union's Canadian director, Ian Robb, told Reuters.
In March, the union also secured a wage increase of up to 22% for workers at an Atco Ltd camp serving the long-delayed Trans Mountain oil pipeline expansion project, according to a news release.
In Alberta, the average weekly wage including overtime for all employees in mining, quarrying and oil and gas extraction is up 7.3% since February 2020, according to data from Statistics Canada.
In the United States, hourly wages for production and nonsupervisory employees are currently about 5% higher on average than the year-ago level, and oilfield wages are due to rise about 10% for the year, according to oilfield consultancy Spears & Associates.
However, average hourly wages in the U.S. oil and gas extraction industry are still below pre-pandemic levels, currently estimated at $45.45 an hour for February 2022, versus $48.37 an hour in February 2020, according to the Bureau of Labor Statistics.
Patterson-UTI raised wages last year because of competition from retailers that historically paid less than the oil industry, Hendricks said.
"We're competing against Amazon hiring drivers, or Target with positions in air-conditioned warehouses. It's easier than a drilling rig in west Texas in the summer," he said.
Oil and gas workers leave industry in droves https://fingfx.thomsonreuters.com/gfx/ce/egvbkelekpq/Pasted%20image%201651180865162.png
($1 = 1.2618 Canadian dollars)
(Reporting by Liz Hampton in Denver, Stephanie Kelly in New York and Nia Williams in Calgary; Editing by Marguerita Choy)
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