Shortage likely to be worse than in last boom, industry group warns

By Dina O'Meara, Calgary Herald; Postmedia News March 30, 2011

Alberta could see jobs in the oilpatch double over the next decade if commodity prices stay strong, leading to a labour crunch rivalling that of the last boom cycle, according to an industry council.

The shortage in skilled workers already is being felt and will continue across the Canadian oilpatch regardless of commodity prices and activity levels in the oil and gas industry, a report released Tuesday by the Petroleum Human Resources Council of Canada warned.

"We are headed toward a severe labour shortage, regardless of future energy prices and industry activity," said Cheryl Knight, council chief executive. "Our industries will need to be prepared to face a labour shortage more severe than what we experienced in 2007."

The report forecasts a labour force of about 130,000 workers will be needed to fill new jobs and keep pace with retirements.

A major reason for the expected labour shortage is Canada's aging population -about 30 per cent of the current workforce is expected to retire over the next decade.

"Even in the worse scenario, when energy prices and industry activity are low, we will need to hire at least 39,000 workers to replace those who are retiring," Knight said. "If industry expands in a high-price scenario, we will need to find 130,000 workers to fill new positions."

In Alberta, which accounts for at least 75 per cent of oilpatch jobs, about 102,300 positions would open in a high-price scenario, up from 57,850 in 2009.

The oilpatch already is seeing shortages in skill sets such as geology, engineering and geophysical expertise, as well as on-the-ground field workers.

The service sector -drilling, services, geophysical contracting -is the industry's highest employer, with 83,000 workers, including 9,000 drilling rig workers, and will be hardest hit by the labour crunch, an industry spokesman added.

Many oilfield workers fled the industry when commodity prices crashed three years ago, and are hard to bring back to the fold, said Brian Jones, chief executive of Stoneham Drilling. "Because of our critical role, labour shortages affecting us will ripple through the rest of the industry," Jones said.

The services sector may need to hire up to 72,000 workers over the next 10 years, he said.

The council sees demand for workers skilled in new technologies associated with unconventional oil and gas exploration and production, as well for water and environmental management technicians, steam engineers and fracking operators.

A shrinking labour market will drive up costs and make the industry less competitive, said Gary Leach, executive director of the Small Explorers and Producers Association of Canada. "If you don't have a trained workers in key choke points . it's going to affect the development of all sorts of big projects," Leach said.
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