Tension is mounting for employees and investors in the oil and gas industries. As extraction and energy sectors regain a foothold in the wake of COVID-19, the 2020 presidential election appears as a fork in the road. On the right, the path leads to rewarding work in oil and gas — for a few years, at least. The left-hand path leads through unknown territory, a provocative “certain death” for fossil fuels in the US, and a long, painful rebirth of domestic energy as we know it.
The outcome of the 2020 election is yet to be written. As potential investors in energy and employees in that field, we need to choose the path we believe to be the most successful and rarely does sound economic strategy (“social responsibility“) nor rationale win — and actively defend ourselves and mitigate loss as it happens. So today, I’ll be writing about the two possible futures of work in oil and gas.
This is one of those terrifyingly exciting situations, like Schrodinger’s cat in a box. We’re unsure of the outcome, but there will be one of two. We cannot travel down both paths. But for this moment, we must consider them as equally viable.
Today, I’m going to takes us down the right-hand path because I feel that’s the more likely outcome. Now and again, we’ll glance the other way and see what could be happening on the other path — because eventually, these two paths merge, as fossil fuels are ultimately a finite resource (well maybe not).
But before we can make any predictions on the future of work in oil and gas, we need to briefly set the stage. One cannot make accurate predictions without an understanding of our current position. So let’s define our jumping-off point!
Oil and Gas Employment Statistics of 2020
At the time of writing — late October 2020 — the US crude oil, natural gas, and chemicals (OG&C) industry boasts nearly 1.5 million employees domestically, plus a host of geologists, scientists, and engineers on land and offshore. Many of these jobs are relatively new. It’s only been in recent years that US energy companies could shift into a position of energy security rather than energy scarcity and dependence on foreign fuels. Here’s a quick recap of recent events:
- This new independence forced the hand of crude oil-producing nations Saudi Arabia and Russia into a price war in early 2020.
- Throughout 2020, oil prices have experienced historic slumps and even negative prices.
- Negative oil pricing occurs when it costs more to store a material than it’s worth to sell, often due to high supply and low demand.
- Reduced travel and commuting — due to the COVID-19 pandemic — dropped the demand for gas and oil further.
- About 107,000 employees (7%) in US oil and gas employees have since been laid off.
Today, the market has stabilized, though oil and gas prices remain low. Oil field and natural gas employees are concerned about the future of their jobs, and many question their ability to transition to new positions in wind or solar.
Now that we have laid the groundwork, let’s answer the real question: what happens next for gas and oil employees?
The Short Term Outlook: Oil and Gas Employment Will Be Stable for a Few Years
This is where the fork in the road begins.
No matter who wins the presidential election, employment in gas and oil will remain mostly static for a few years. President Donald Trump has prioritized US energy independence and will encourage it if re-elected. I believe he will win. Traveling along this path, we see a faster economic recovery. It begins with a boost in consumer confidence that leads to more manufacturing, transport, and travel. There will be a significant uptick in oil and gas jobs, which should start immediately in the 2020 holiday season.
Over on the left-hand path, former VP Joe Biden has other plans. He promises to deconstruct the oil industry if he is elected. It’s a serious concern for employees in oil and gas.
Even so, that deconstruction would take a few years. It cannot happen overnight. Our infrastructure relies almost wholly on gas and oil. Per the US Energy Information Administration (EIA), US vehicles — including personal, freight, and military vehicles of all types — use something like 220 billion gallons of liquid fuel per year.
But What About Electric Vehicles, You Ask?
Electric cars ultimately rely on fossil fuels for most of the electricity stored in their batteries. (Those batteries, by the way, require lithium — another of earth’s finite resources that offer potential employment opportunity yet come at a significant environmental cost.) So while they may reduce immediate dependence on gas and oil, they are only a short term answer.
Looking further down this path, we see more jobs appearing in wind, solar, and possibly tidal energy sources. There will also be increased demand for lithium or a lithium replacement, as well as an advent of lithium-recycling technology and plants.
And there’s still more to think about:
- Oil and gas employees — laborers and non-professionals in particular — are nervous about the concept of an impending “green new deal.”
- But the employment landscape is changing in these fields in other ways, too. Let’s think about the mass exodus of retiring “boomers.”
- Within the next decade, 2.7 million “baby boomers” will retire, leaving tens of thousands of skilled, well-paid positions open.
- In light of the energy changes looming on the horizon, we expect a portion of skilled laborers to seek other careers or retire early within the next few years.
All this leads to the ultimate question: is a career in oil and gas viable?
“Should I keep my oilfield job or look for other work?”
If you’re young and unhappy with your work in oil or gas fields, these next few years are the perfect time to seek a degree or apprenticeship in a more sustainable career. If you love your well-paying job as it is, or you’re nearing retirement age, hang in there! You’ll surely see more advancement opportunities in the next few years as boomers retire en masse and a young, inexperienced workforce takes up the yoke.
But what happens next? What is the long-term outlook for work in oil and gas? No matter who wins the election, fossil fuels are thought to be finite (a whole new blog so let’s continue). So let’s think about work in these fields, say ten years from now.
The Long Term Outlook on Employment in Gas, Oil, and Extraction
Oil & Gas in 2030
It’s challenging to establish how many years we can operate on the oil and gas deposits we know about today. Current research states that globally, we use about 11 billion tons of fossil fuels every year. The research suggests that we’ll run out of oil, coal, and gas in about 52 years if we continue as is and don’t make any significant discovery in the realms of sources or technology.
But, let’s remember that these same sources ten years ago said we’d fall short of fossil fuels in only forty years. Ten of those forty years have already passed. Therefore, We’ve added 22 years — or 55% — to our expected fossil fuel viability. That was also before the COVID-19 pandemic encouraged the Work From Home (WFH) movement. In 2020, employers were forced to swallow WFH, and they’ve come to see benefits like reduced overhead, fewer real estate leases, and fewer workers’ comp claims. That means more WFH opportunities for the people who want them and less congestion on the roads for folks who don’t.
While those clear highways and reduced commuter times don’t translate well into demand for oil and gas, they do mitigate the emergency status of fossil fuels over the next ten years. Know that WFH is not transitory. It’s here to stay.
Another key turning point for oil and gas is likely coming in 2035 when California is expected to halt all sales of new gas-powered motor vehicles.
Changes Coming to Work in Oil and Gas in 2035 — Especially for California
In September 2020, California Governor Gavin Newsom signed an order to ban the sale of new gasoline vehicles by 2035. While electric auto manufacturers like Tesla jump for joy, it creates significant and understandable concerns for gas vehicles manufacturers. After all, Californians buy about 16 million new vehicles in a non-pandemic year.
While California is known for an extremely progressive stance on climate change and environmental issues, not all Californians are excited about the law. Oil fields in Kern County — the San Joaquin Basin is known as the “oil capital of California” — produce 110,000 barrels of oil equivalent (BOE) every day and employ 10,000 workers in an average year. Newsom’s ban on gas vehicles could become a death sentence for 10,000 oil and gas jobs in California.
California is the largest economy in the US and the eighth largest economy on the planet. Statistically, Californians consume all the oil produced there and import more. Still, a ban on the sale of new gas-powered vehicles does not take old cars off the road — yet.
About 30 million registered vehicles are on the road in California today, and almost half of them aren’t new. It will take a long time for electric cars to replace gas completely especially as the antique car revolution heats back up as boomers and gen-x’ers take what’s left of their disposable income and restore that old Bronco or Defender. However, as that demand dwindles, the available work in oil and gas in California will dwindle, too.
More Predictions for the Future
Ultimately, I speculate that oil and gas jobs will remain steady for the next few years. If President Trump is re-elected, we’ll surely see a bump in these sectors. If former VP Joe Biden is elected, we won’t see any new business springing up in these fields. But it will be a few years before our infrastructure and dependency are entirely overhauled. Either way, fossil fuel replacements and a lithium replacement will need to be developed soon.
If you’re wondering about your future career or finding work in oil and gas, don’t worry. I’d say it’s good for the next twelve or fourteen years.