Against this backdrop, the oil and gas industry has a significant role to play in employment globally. In terms of direct employment, the industry recruits highly skilled and specialized workers, but its impact extends far beyond this. For local and national economies, it has significant multiplier benefits, generating opportunities for a wide range of businesses. This includes various other parts of the manufacturing supply chain, transportation companies, hotels, restaurants and shops. All told, the oil industry alone supports around 70 million jobs worldwide.

The local context to the industry is one of its enduring features. Scattered throughout the world are regions, towns, villages and communities, where the oil industry is the main employer, the driver of economic opportunity, a home to rigs, refineries and petroleum universities, and a source of civic and local pride. ‘Oil towns’ exist on every corner of the globe, for example, Midland, Texas; Aberdeen, Scotland; Dhahran, Saudi Arabia; Port Harcourt, Nigeria; and Ahmadi in my home country of Kuwait, to name a few.

Thus, it is concerning that we hear about a ‘hiring crisis’ facing the industry, an impending labour shortage, that the younger generation is being ‘put off’ from pursuing a career in the industry, and that fewer petroleum related subjects are being offered at universities.

A range of factors may be behind these trends, including the perception that the industry is not a viable long-term employment option, driven by the misguided view that oil is not part of a sustainable energy future. This has been exacerbated by references to the potentially devastating number of job losses and mass lay-offs foreseen in some net-zero pathways advocated by some energy stakeholders.

In the 2023 update to its Net Zero Roadmap, the International Energy Agency (IEA) foresees 13 million jobs lost in fossil fuel-related industries between 2022 and 2030. That is 13 million jobs lost in an eight-year period, equating to roughly 1.6 million jobs lost every year, 135,000 a month, or 4,500 a day.

The counterpoint is posited that new jobs will be created in alternative industries, but there are countless challenges to this and the transferability of job skill sets cannot be assumed.

Indeed, the IEA’s most recent World Energy Employment report states, “There are limits on the transferability of skills to clean energy sectors. Not all the clean energy jobs that are created will be co-located or share the same skills as those lost. Late-career workers may also be reluctant to switch industries as they likely earn more in oil and gas than the wages in most clean energy sectors: oil and gas workers are among the highest paid workers in any sector thanks to their high level of skilling, well-established labour representation, and the need to compensate for occupational hazards and mobility requirements.”

Specifically, on oil and gas sector jobs, the IEA has sent mixed signals about the labour needs of the immediate future. Almost a year before the IEA first launched its Net Zero Emissions (NZE) Scenario in 2021, the Executive Director of the IEA stated, in an interview with Anadolu Agency, “My main concern is there are millions of people around the world who work in oil and oil-related sectors. Natural gas and oil industries are also strong pillars for the world economy. If these industries collapse, they will have a negative impact on the global economy as well.”

In the IEA’s NZE Scenario, one that has recently been leveraged by policymakers, the oil and gas sector experiences a decline of more than 2.5 million jobs, or around 20%, in period to 2030.

The mass job losses envisaged by the IEA’s NZE hangs like a sword of Damocles over oil and gas industry workers everywhere. Moreover, the impact of mass redundancies or the shutting of certain industries is not confined to the economic sphere. It can affect societal harmony too. There are enough past examples from around the world of communities that have struggled to rebuild following the forced closure of an industry.

At OPEC, we have a clear and consistent message on oil industry jobs – the world will need more of them! We foresee oil demand growing to 116 mb/d by 2045 and to meet this, and further evolve technologies to reduce emissions, we will need more workers.

To all workers in the oil industry across the globe, on behalf of OPEC, I thank you for your contribution to delivering this vital commodity and the products derived from it to billions of people worldwide.

And finally, to all jobseekers – of all generations   ̶ I encourage you to consider a career in the oil industry. It is one of boundless opportunity for professional fulfilment, and a vital cog in providing energy to the world.

Article by HE Haitham Al Ghais, OPEC Secretary General

Monday, 29 April 2024