As oil and gas companies in the US have slashed many jobs due to the coronavirus pandemic’s crushing impact on oil demand and prices, the crisis also could bring fresh opportunities for fossil-fuel workers to transfer their skills to the renewable energy industry.
The US oil, natural gas and chemicals industry slashed 107,000 jobs from March to August, the fastest rate of layoffs in the industry’s history.
About 70% of jobs lost during the pandemic may not return by the end of 2021 if oil prices remain low, according to a Deloitte Consulting report on the future of work in the sector.
Yet the downturn has given new impetus for fossil-fuel companies and workers to reposition, with sustainability presenting a tremendous opportunity, according to Deloitte.
“Covid-19 has abruptly fast-forwarded the spectre of peak oil demand, degraded the investment climate and investors’ appetite for fossil fuels, and reminded organisations to take the energy transition seriously,” the Deloitte report stated.
Energy services contractors and a global employment business told Upstream they also see a silver lining for many oil and gas workers with transferable skills, such as engineering and construction expertise as well as skills gained from onshore shale and offshore oil and gas projects.
Opportunity in chaos
The pandemic broadsided global demand for oil — the lifeblood of the transportation industry — driving down oil prices as lockdowns kept people close to home.
The US Energy Information Administration estimated that transportation-driven fuel demand fell 30% and global greenhouse gas emissions fell 17% in the first half of 2020.
The coronavirus-induced changes in consumer behavior reduced oil demand by 2.5 million barrels per day, according to a report by S&P Global Platts.
Duane Dickson, US oil, gas and chemicals leader for Deloitte Consulting, told Upstream: “In addition to an energy transition that was already well underway, we now have a significant drop in demand, and the question is: Will that demand return, and if it does, will it be in the same form, or will it be for low-carbon energy alternatives?
“People are realising that a low-carbon future is going to be more than just desirable, it is going to be needed.”
Global renewables industries supported a record 11.5 million jobs in 2019, but governments will need to “supercharge” the energy transition to keep growth on track amid Covid-19, according to the International Renewable Energy Agency (Irena).
Irena wants more attention given to helping workers switch from polluting sectors into renewables.
The job market in the US renewables sector has its own challenges, with 13% of renewable power industry workers still unemployed in September, according to S&P Global Platts. But the US wind and solar markets are expanding rapidly, and investors are giving the sector a vote of confidence by pushing up stock prices, it said.
Road work ahead
The energy industry’s road to net-zero emissions is a multifaceted, multilevel project of immense scale and complexity, unlike any ever attempted. It requires a comprehensive and collaborative plan underpinned by the experience and knowledge of workforces from a variety of sectors.
“We’ve been able to consistently transfer oil and gas experience into renewables,” said Beth Bowen, Americas president for global employment organisation Brunel.
Project managers, engineers and construction specialists are specific examples of transferable skill sets, she noted, adding that the renewable energy industry will need outside experience to help in meeting its goals.
Houston-based energy technology company Baker Hughes, in addition to recruiting outside talent, looks internally to identify those who can help move the company’s energy transition plans forward.
Many of its employees have capabilities and expertise that easily apply to alternative and renewable energy markets, the company told Upstream, noting that its subsurface expertise in oil and gas development is applicable to geothermal energy development and below-ground energy storage.
“As we think about technology, there’s a whole host of things that the oil and gas sector can bring to renewables space,” said Allyson Anderson Book, vice president, energy transition for Baker Hughes.
One is a workforce with a highly transferable skillset, she said.
“For example, we’ve been working in the subsurface space on enhanced oil recovery projects. It is the nucleus for where people think about carbon dioxide storage,” she said.
“We don’t have to convert a workforce for it. Instead, it is adapting what people know and what they’ve learned through their EOR experiences to approach the challenge from a pure CO2 storage aspect.”
Matt Kirk, senior vice president, global engineering and consultancy at Wood, sees the skills transfer as a natural extension of the industry's technical capability.
In 2014, about 90% of Wood’s business came from upstream oil and gas, he noted. Today the figure is about 35%, with a large and growing proportion of its work and future orders comprising renewable and low-carbon energy projects.
"For example, on the operations side, we have many tradespeople that provided support to onshore shale projects in the US," he told Upstream.
"They crossed over and now support the solar projects as the work there has definitely picked up.”
Many technical skills and the engineering used in the subsea oil and gas space are relevant in support of offshore wind, he added.
“We understand how to design and install things for operations in underwater and harsh marine environments for significant periods of time,” he said.
“All of the challenges we will face on the renewables side will require the same engineering know-how that we've deployed in the upstream oil and gas space over the past 40 years.”