As many as 450,000 of the 600,000 people now employed directly or indirectly by the Canadian fossil industry could be looking for new jobs as the transition off oil and gas unfolds, TD Economics concludes in a report released earlier this week.
The bank “warns governments must develop worker transition plans now to prevent disastrous consequences,” the Globe and Mail reports. “If they don’t, workers could face displacement similar to that of the U.S. and Canadian manufacturing sectors in the 1990s and early 2000s, when automation and technological changes led to a decline in manual jobs across the economy.”
The report landed just as a separate survey by Deloitte found that more than one-third of oil and gas workers in the United States are considering future jobs in renewable energy, according to fossil industry newsletter Rigzone.
“Companies that choose to see the coming decade as an opportunity for transformation will likely not just outlive this compression but may even lead the industry into the future of work,” Deloitte vice-chair Duane Dickson said in a statement. “By putting people at the core of business transformation strategies, the industry may hopefully regain its appeal and position itself for what’s expected to be a much different landscape in the future.”
The TD Economics study foresees falling demand for fossil fuels “as more countries and companies commit to net-zero greenhouse gas emissions,” the Globe writes. “Fossil fuel demand does not disappear entirely in most net-zero forecasts, the report notes. But with the extraction and distribution of oil and gas accounting for more than a quarter of Canada’s greenhouse gas emissions, the sector is a prime target for emission reduction efforts.”
“There’s a role for governments to act to ensure that these workers aren’t forgotten and left behind,” said report co-author Francis Fong, a managing director and senior economist with TD.
But he said it would be “dangerous to assume” that fossil workers will all just pivot into clean energy jobs.
“That’s because the skills needed in clean energy are likely to be different from those required in oil and gas,” writes energy reporter Emma Graney. “Also, green jobs are likely to be more geographically dispersed, because deriving energy from renewables is not necessarily tied to the location of natural deposits of fossil fuels.”
Fong said he’s most concerned about communities where the fossil industry is a major employer, and where workers whose jobs are on track to disappear could be permanently under- or unemployed. “We thought we would get through the 1990s, 2000s manufacturing transition pretty well, but that was a lot messier than we anticipated. I think this has the potential to be as messy, too, if not messier,” he told the Globe, though he expressed confidence governments have learned from past job crises in other sectors.
“The report recommends that the federal and provincial governments work with industry to identify skills needed in the clean energy sector and design a new retraining framework, focus clean energy infrastructure and development in the communities that bear the brunt of the energy transition, and implement broad-based income supports to partly offset income losses due to displacement,” Graney writes.
In a report released in January, Vancouver-based economist Jim Stanford identified the 18 communities across Canada where fossil companies account for at least 5% of local employment, concluding that it’s “very feasible” to chart a “just and equitable transition” for the fossil work force over the next 20 years. And last year, Universal Income Project co-founder Jim Pugh pointed to a basic income as a cornerstone of the shift to a “climate-safe economy”.
The Deloitte study in the U.S. focused on the skills gap that is already emerging between the fossil and renewable energy industries, based on data from more than 22,000 fossil employees, job searchers, recruiters, and companies. It concluded that firms are looking to close that gap “by targeting transferable skills from other industries, training and development of existing work force, and partnering with colleges, to name a few,” Rigzone writes.
“We expect the learning curve to vary based on the type of role that is actually transitioning, for example, whether it’s technology or word process driven,” said Beth Bowen, president for the Americas at global recruitment firm Brunel. “We see helping potential employees close this gap as the number one essential piece to ensuring there is the available future work force for renewables.”
Daniel Raimi, a fellow at Washington, DC-based Resources for the Future who teaches energy and climate policy at the University of Michigan, said the scene is shifting for workers and communities that may previously have been accustomed to seeing the fossil industry go through a three- or four-year economic boom or bust.
“I have a lot of students who are enthusiastic about engaging directly in policy and politics to effect the change they want to see in the world,” he told Rigzone, adding that his students currently work at companies like colossal fossils ExxonMobil and Total, oilfield services giant Schlumberger, U.S. utility DTE, or electric vehicle upstarts Tesla and Rivian.
With more than 40% of survey respondents identifying insufficient education and training as the biggest factor in a growing skills shortage, “I think it’s a good opportunity for especially the renewable space if companies can create an overall compensation package of training, long-term career progression, and stability,” Bowen said. “I think the first companies to get it right are going to have a real advantage attracting top talent.”