1000s more oil and gas job losses in 2016, new report predicts
Every day the hole just gets deeper, former well site company owner says
A new labour market outlook forecasts a sluggish recovery for Canada's oil and gas industry over the next few years, with an estimated loss of up to 24,000 direct jobs in 2016, which would bring the total number of losses to roughly 52,000 since the start of 2015.
When companies finally do emerge from the downturn they'll be leaner and slow to rehire, according to the latest report from Enform's Petroleum Labour Market Information division.
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Enform is an arm of six lobby groups representing the oil and gas industry, including the Canadian Association of Petroleum Producers and the Canadian Energy Pipeline Association.
"Certainly it is a very modest recovery relative to other downturns," said Carol Howes, Enform's vice president of communications.
"In 2009, we saw quite a sharp increase in job hirings and activity. After that downturn the recovery was very quick and swift. The expectation is that that won't necessarily be the case this time around," said Howes.
Enform's data-crunchers looked at two labour market scenarios for 2016-2020 based on different oil price forecasts. They predict that if prices remain below US $60 per barrel until 2020, the industry will need to hire 46,435 workers.
If oil prices reach the US $60-80 per barrel range by 2020, hiring requirements could reach 55,305 jobs. Even then, the industry wouldn't hit pre-downturn employment levels.
"2014 was a peak year definitely for the industry, and the expectation is that the jobs won't recover to those levels, not any time soon," said Howes.
Enform predicts oil prices will start to recover in 2017, but Howes says a "new normal" is taking shape in the industry, as prices stay lower for longer and companies scale back benefits and salaries.
"One of the areas of concern that the industry had over the last few years was inflation of salaries and the costs that were incurred as a result of what the expectations were for salaries within the industry. So, we think going forward there will be a bit of a cap on that," said Howes.
"We're going to recover into a world that is more competitive and certainly one that's going to demand more agility. That translates to companies being very careful about the kind of workers they bring back and how fast they bring them back," said Michal Moore, a professor of energy economics at the University of Calgary's School of Public Policy.
The slow recovery is draining for oil field workers and their families.
"We're out of options, like, there's no reserve left whatsoever," said Terry Kaminski, a 46-year-old father of four in Sylvan Lake, Alta.
His well site supervision company went bankrupt last year. These days he's scraping by working as a farm hand.
"Every day the hole just gets deeper," said Kaminski, who has worked in the oil and gas industry for 20 years. "To stay afloat I've cashed in my pension to pay bills. I've sold off possessions."
As tight as his finances are, the prospect of returning to the industry when prices recover leaves him cold.
"The ups and downs of the oil patch... this last time has really just turned me off," he said. "I don't want to, but I may be forced to go back to it."
Kaminski's concerns are echoed in Enform's labour market outlook, which says companies are concerned about attracting skilled labour after a prolonged downturn.
"Where we do see some significant concerns going forward is the ability to be able to replace some of the seasoned and skilled folks who have retired, and whether we will be able to attract young people into the industry because they are the ones looking at the industry going, 'Is this where I want to be?'" said Howes.
Enform says Alberta's oil and gas sector supported 178,830 direct jobs in 2014.
It estimates that by 2020, industry employment levels will be between 161,920 and 173,525, depending on oil prices.