Labor shortage continues to plague expanding energy industry

Oil and gas companies will expand their staffs in 2012, but a shortage of skilled workers will create a critical talent gap for the industry, according to a report by recruitment firm NES Global Talent.

Demand for engineers will grow this year, as oil and gas exploration and production expands both on land and offshore, the firm said. But NES Managing Director Simon Coton said a depletion of skilled workers in oil and gas fields in the United States, Great Britain and Australia will be a major challenge.

Coton said the industry’s best chance for bridging the gap is to recruit workers from other fields, including shipbuilding and infrastructure industries.

Oil and gas companies also have set their sites on military workers, whose training in technical and high-pressure environments is comparable to oil field work.

“During the recession, lots of projects didn’t make it past the financial investment decision stage, but many were sanctioned in 2011, and as a result of this, we can expect an increase in demand for construction and commissioning roles,” Coton said.

Labor shortages have plagued the industry in recent years as shale drilling has led to an oil and gas production boom on North American land. Deep-water offshore drilling also has expanded globally leading to greater demand for workers in that field.

NES forecasts an expanding market for health, safety and environment specialists in the Gulf of Mexico, for deep-water engineers in Brazil and West Africa, and for liquefied natural gas specialists in  Australia and Asia .

36 Comments

  1. texdjd

    How can this be? Record unemployment AND a labor shortage? Oh yeah, that’s right due to liberal policy makers people can sit on their couch for 2 years collecting unemployment and other welfare. Hmmm…

    #1
  2. Trail_Tramp

    @texdjd That and they have to be able to pass a drug test.

    #2
  3. Donald

    It will continue to be hard to find employees until the oil field stops refusing to hire people with a pot charge on their records. You can thank the State of Texas for ruining kids records caught smoking a joint out behind the barn and then not allowing them to do something to get it removed without hiring a $15,000 lawyer to get the charges expunged – if the judge feels good that is! And the corporations are guilty in this also. They have paid the politicians to abuse everyone and charge the hell out of minor crimes. Greedy politicians are evil. And bought politicians and greedy police organizations are even worse! Hell, it take four licenses and at least one inspection to open a hot dog cart in Texas! I remember when drillers drank on the way to and way home form the rig every day. I did not support that activity but it was common.

    #3
  4. Wantingbalance

    So here’s a better interpretation of what the recruiter said: “due to the high cost of American labor, the energy industry has started a campaign to make people belief that there are not enough ‘skilled workers’ to fill open spots so that it can start requesting work visas for folks from the Philippines, Mexico and other places where $5 an hour sounds like a real living wage.”

    #4
  5. dsl987

    They can’t find people that will pass a drug test

    #5
  6. willrogers

    I think WantingBalance hit the nail on the head!

    #6
  7. jake38

    Kind of hard to suddenly find trained oil and gas engineers and other professionals with the constant boom and bust cycles of the oil and gas industry. The big lay off of 2008 comes to mind…

    #7
  8. Fred

    I went to an oil company’s job fair and the people were lined out in the street,,, and there is a shortage? Horse Hockey!

    #8
  9. CAD1936

    Any thinking person knows that a lack of education is the primary cause of this. And a lot of the education problem is caused by those in the industry who are so reluctant to pay taxes to support the system. Again it is a lack of foresight, greed, and selfishness by so many in these industries causing the situation they now face.

    #9
  10. Trail_Tramp

    jake38 has pointed out a critial point. The boom and busts do hurt when it comes to students picking a career. The industry is still hurting from the bust of the late 80s too. You hear managers talking about the “dumbbell skill profile” in companies. Older employees, younger employess and nobody in between.

    #10
  11. Wantingbalance is exactly right on……….

    Donald, I think you stand to be corrected, even though you have a very good point with 95% of the companies out there, I don’t think oil and gas are quite as stringent about roughnecks and roustabouts.

    #11
  12. hgnis

    There are may contributing factors to this but the root cause stems from an inability of company recruiters to think out of the box and consider candidates that (a) do not come from their “core” schools i.e. the good ole boys club or (b) see canidate potential through training and coaching not just what they are today. For some reason the majority expects the kids out of school or those in different industries / looking for a creer change to be subject matter experts in everything. This has to change.

    #12
  13. westtex

    CAD,
    The problem in education isn’t the lack of money but rather the lack of personal responsibility.
    -
    Visit a high school and see for yourself what passes for eductation. Even the higher performing students need to take remedial EVERYTHING in college.
    -
    But you are correct in saying that the labor shortage in the Oil Industry is due to lack of education. Contrary to some people’s opinion we can’t just hire illegals for $5 and hope they don’t kill themselves in a VERY dangerous profession.
    -
    You need SKILLS to work in the oil industry. We won’t just hire any dummy that walks in.

    #13
  14. Smilin' Bob

    The boom and bust cycles we seem to see every ten years as political parties switch could be partly to blame.
    Learn a skilled technical trade then watch it get flushed down the toilet on a 10 YR cycle.
    I have seen this happen three times now.

    #14
  15. Rancher

    Smilin Bob hit the nail on the head. You get the education and skills, work long and hard only to be thrown out at the hint of any slow down. Many people that are in the oil and gas sector regret their choice. The industry has made it’s own problems.

    #15
  16. Trail_Tramp

    The top paying and highest potential for employment are for engineering degrees of any kind. Yet what are the most popular majors with US students? Business, Accounting, Nursing, Psychology, Education, Marketing, English and Communication.

    #16
  17. Trail_Tramp

    Rancher said: “The industry has made it’s own problems.”
    ===========================================
    Contrary to what some people believe, big oil does not control the commodity price of oil. It’s as volatile as the product they find and produce. Did you hold on to your herd when cattle prices bottomed out?

    #17
  18. Jkelly

    It has to do with the states insistence that all students take a college prep schedule. Students are steered away from courses that will help them in the real world like welding and building trades and forced to take fine arts and pe.

    #18
  19. Pablo

    It would be nice if the high schools realized that not everyone is college bound. They should go back and have some semblance of ‘operations’ training as a vocational option so folks might have at least some idea what goes on in chemical plants or oilfield work.

    That and the drug screen issues keep many out of work. But its something I welcome. I’ve seen accidents happen because someone was drunk or high at work.

    #19
  20. Hotpuppy

    Until they stop putting profits way before people they will continue to have trouble….

    #20
  21. Greg in TX City

    I think Pablo has an excellent point. Not all kids graduating from high school are bound for various reasons. So why not create more technical training schools where kids can learn craft skills that they can earn a living with. Many skilled craftsman make as much or more than many college grads. I work with API Inspectors who began their careers as welders and then got their inspection certifications. All of those guys make $100K or more per year. Lots of college grads don’t make that. Our whole education system is failing our children and the future of industry in this country.

    #21
  22. Cinco de Frijoles

    Sounds like a good opportunity for all these out of work rocket scientists and brain surgeons who’re collecting welfare bennies now.

    #22
  23. Trail_Tramp

    Hey CAD, in 2010 the US spent $1 trillion on education for students. The oil industry only spent $400 billion on capital budgets. Seems the US economy is getting the biggest return on investment in drilling for oil and gas.

    #23
  24. tanstaafl

    This is all Obama’s fault.

    #24
  25. Boys,Boys, don’t knock the oil patch. I just retired after 33 yrs. and all I have to say is “oilpatch been very very good to me”.

    #25
  26. ClearAndPresentThinking

    Hard to find good help until the SBOE changes the curriculum from being anti-science. Looking for oil and gas created millions of years ago requires an admission that the earth is over 6,000 years old.

    #26
  27. sharky

    I am glad to read the responses to this propaganda and see that most of you aren’t falling for it and/or know the root causes for what truth there is in the article. Yes- it is the boom and bust nature of O&G. Yes- it is the lack of companies’ willingness to train into a position. Yes- it is about finding cheaper labor from the armpits of the world. But above everything else, YES! it is the manipulation of commodities by the .01% at the top of everything.

    #27
  28. Kros

    Education education education

    …and the tea party folks want to cut education. This way we outsource our engineering jobs because we don’t have enough skilled engineers here. Brilliant.

    #28
  29. Grego

    There’s not a shortage. Any one that exists is the result of people capable of going to the oilfield/pipeline/etc that don’t because they don’t enjoy the boom and bust cycle or they don’t get hired cause they’re not related to someone. There’s a ‘shortage’ now but two years ago there wasn’t a job around. My bet is this is a ploy to start getting Mexicans. The oil/gas industry (to it’s credit) is the only construction I’ve worked around that the majority of the guys are legal. They also pay better. However it also has it’s own ‘old boy, hire my relative’ clique going on that shuts a lot of people out.

    #29
  30. Oilfield has and will always be Chicken or Feathers. I am a Petroleum Engineer with 30+ years experience. Working now in West Africa. The shameful thing is kids are afraid of the cycle of boom or bust and the Busts last allot longer than the Booms.
    After all oil is what won WWII for us. It also made the US the economic power it once was. Sad but it is basic industry that will leave the US. I make $2500 day here while in the US max is $1200 a day – not hard to do the Math.
    Also there are Chinese drilling rigs working in the US with all Chinese crews.
    Plus the Chinese have built 700 additional major Engineering Universities in the last 5 years with a total of 2,800 at present with an average of 400 students per class. The USA does not have 700 total and classes are 20 to 30 students.
    There are less than 50,000 registered Professional Engineers in the US. The Chinese have 1,5000,000 – worldwide. Why do you think everything is made in China?
    They are going inot foriegn countries with raw materials and helping to develop roads, bridges, dams, oilfields, amnufacturing, etc;;; Who do you think once thoes thrid world countires are starting to dvelop thye are goind to purchase machinery and equipment to continue to develp their countries?
    Hope our kids enjoy flipping burgers with their business degrees cause they will be doing it in their later years too for Chinese professionals.
    Right now a four year engineering degree gradulate starts out at $150,000 salary with usually a 50% sign on bonus ($275,000 for the 1st year). Doctors & Lawyers don’t make that kind of money for 10 years and their schooling is 7 to 9 years.
    Our kids should wake up – its their future. They won’t have the parents to give them everything their little hearts desire.

    #30
  31. willrogers

    I have call a BS on Mie Schneider’s entire post!

    #31
  32. pacificoil

    same here willrogers. I would just think an engineer w/ 30+ years experience would know that $150k plus a 50% signing bonus doesn’t quite add up to $275k. Let alone the fact that $150k jobs out of school do not exist, you would have at least thought he would’ve gotten the math correct. Next time do a little proof read Mie…you are making the rest of us look bad.

    #32
  33. Texan68

    Engineers are in short supply that is for sure, but the article does state that “skilled” workers are in short supply also. Dont give me this crap about education being the problem. Mostly it’s folks being lazy and not willing to sacrifice to go out and work in the patch and make a decent living. To darn lazy or just plain spoiled and scared to get down and dirty and learn the business. I have a GED and I gross near $100,000 p/yr doing administrative work on offshore drilling rigs. So my lack of education has certainly not limited my ability to earn a decent wage. These kids today are just to damn lazy for the most part. And contrary to lots of the comments about companies wanting to drop wages and hire wet backs or illegals, that is bigtime B/S! Cant hardly find a Mexican or other foreigners working as drillers, roughnecks or as roustabouts on any rigs I have worked on in the past 5 yrs.

    #33
  34. MBA

    This info isn’t lost on me. I have a MBA but I am going to oil school next fall. The training should put me right in line for an entry level oil job and I would assume my other schooling and international experience can’t hurt!!

    #34
  35. james Dean

    Mie Schneider, not too bright this guy. I live in Alberta have worked in the industry for 30 years, trust me engineers don’t start at 275k a year. also your a little off with your math. There are more than 50k engineers working in the O&G industry in Calgary I would suggest you multiply by 100 to get a idea of the number of engineers are in the US. I bet there are 10k Prof engineers from the US working in Calgary alone. What a moron.

    #35
  36. Skew2

    Mie, you are WAY off… I think you took the real numbers and multiplied them by 3. NO WAY is a greenhorn engineering student in ANY discipline making 150K right out of school. Heck, there are some 10-15 year guys not making that much. Most of the ones that do…also happen to be engineering managers…. geez…
    So according to you… most of the engineers out there are making as much as David Lessar Minus the stock options and bonus? LOL!

    #36