Automation Is Coming For The Oil Jobs, Too

Photo: Ian Forsyth, Getty

When pundits, politicians, or advocates have talked about the need to reduce fossil fuel production to combat climate change, one of the most common rejoinders has been to appeal to that most central of mordern concerns — it creates a lot of jobs. Oil industry backers are often touting the notion that it creates lots of decent-paying jobs.

We know by now that there are actually comparatively very few coal jobs left. But oil and gas companies are automating their workforces, and there’s about to be many fewer of them, too. Last week, I looked at the numerous ways that tech companies like Google are helping the oil industry use AI and automate its processes; the emphasis was on the fact that Silicon Valley was seeking profit in fossil fuel extraction at the height of climate change, but the subtext was that there will be fewer workers employed by the sector as well.

Which was why I was interested to see a story from a local paper in Houston, the historic HQ of the U.S. oil and gas industry, published with the headline “Technology leads to slow growth in energy jobs despite rebounding oil industry.” The paper, Community Impact, noted that, “Since the oil and gas downturn of 2014, the industry has lost more than 86,000 Houston-area jobs and only regained about 24,400, according to the GHP.”

Some quick background — as you might expect, jobs in the oil industry are largely pegged to oil demand; when oil prices are high, the sector booms, when they’re low, the layoffs hit. In the years following that downturn that began in 2014, tens, even hundreds of thousands of jobs were shed across the oil, gas, and mining sector. Just look at this wild swing, courtesy of a graph from the Bureau of Labour Statistics:


Usually, the boom-bust-boom cycle is accompanied by a resurgence in jobs. This time, that’s not happening, at least not nearly to the same extent — thanks to process automation and better pumping technologies. “In general, technological progress is leading to lower labour intensity across the energy system,” the International Energy Agency reported in 2017, after oil prices had began to recover. “For example, a 30 per cent drop in jobs in U.S. oil and gas upstream from its peak level in 2014 to its trough in 2016 was accompanied by only a marginal decrease in production.”

That followed a $US47 ($65) billion effort to digitize parts of oil production, per the IEA. As I understand it, that covers everything from software automation to networking oil rigs, to automating drilling systems. And as a result, tens of thousands of lost workers amounted only to a minor drop in oil output.

And the trend has apparently held steady. Here’s the 2019 story in Houston again:

Cindy Taylor, president and CEO of Oil States International, said overall job growth this year will be light, even with a moderate rebound in crude oil prices. ... Taylor said the oil and gas industry is contending with more efficient technologies, reducing the need for new jobs.

“There will be employment gains, but we can’t forget we are doing more with less,” she said. “This is not an issue unique to energy by any means. We are all talking about how do we repurpose our workforce to optimise what we have available with digital technology.”

This following myriad other reports of falling jobs across the sector in recent years. But because it’s becoming increasingly clear that automation is going to eliminate a lot of jobs through attrition, oil, with its boom and bust employment cycle, will be especially prone to seeing its job numbers plummet—much, probably, to management’s liking.

The fossil-fuel-for-jobs argument has been losing ground for years, especially as by some counts solar power employment has eclipsed that of the oil and gas sector, and has of course always been based on a wobbly premise at best—if someone’s livelihood is contributing to climate change, the emphasis should be placed on finding and transitioning to other avenues of work.

Still, the enduring fossil fuels as jobs creator mythos is slated to take a blow, as automation starts culling its workforce.

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