Can Oil Patch Layoffs Fill Construction Craft Gaps in U.S. and Canada?
Plunging oil prices have cost an estimated 100,000 direct and indirect oil-and-gas sector jobs in Canada, say producers; about 31,000 could be gone in Alberta by 2019, say researchers.
PHOTO BY AP/WIDEWORLD
The Canadian Association of Petroleum Producers estimates the nation’s oil-and-gas sector lost 100,000 direct and indirect jobs in 2015. Now, many of the workers with industrial skills who moved to the Alberta oil patch for high-paying energy work are looking for work in other provinces and sectors. But the energy crash has hurt overall construction in some areas, and observers wonder if work-culture differences remain an obstacle.
Some say the trend could help to fill vacant construction jobs in North America as infrastructure, commercial and institutional sectors still drive strong demand for construction workers. In Texas, contractors are expanding their head counts amid oil and gas layoffs, says Associated General Contractors San Antonio chapter President Doug McMurry.
Labor research firm BuildForce Canada (BFC) last month estimated that, assuming current oil prices continue, Alberta could lose 31,000 construction jobs by 2019, with retirements pushing added worker losses. Researchers see a short-term bright spot in commercial construction, lasting through this year.
“The industrial workforce from Alberta is highly skilled and mobile, therefore they would be good candidates for industrial work in other provinces or, in some cases, even internationally,” says Rosemary Sparks, BFC executive director. Record numbers of construction jobs in neighboring provinces could help the newly unemployed, she notes, adding, “Many construction workers from the oil-and-gas sector would have similar industrial skills as long as similar trades were in demand for utilities work.”
In Alberta’s neighboring Manitoba, power and infrastructure projects will boost construction employment to a new peak over the next few years, stretching a 10-year construction expansion to 2018, BFC says. “We also think there will be opportunities for oil workers to work on several proposed natural-gas export projects in British Columbia,” Sparks says.
Demand in Manitoba and other provinces may help to buffer unemployment from oil and gas but would not be enough to offset the release of oil workers, Sparks says. Nevertheless, labor shortages are ongoing among key trades, including heavy-equipment operators and mechanics, pressure welders and pipefitters with specific skills and experience, BFC said in its January report. Sparks says Alberta’s current downturn is more “complex” than the one experienced in 2008-09.
“There are a lot of opportunities for workers in construction, even with the downturn in oil prices, because of the amount of megaprojects that are either underway or scheduled to start,” says Jay Edwards, an engineering and construction industry recruiter in Alberta.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
McMurry says that, despite the impact of plunging oil prices on construction, the industry is inherently more stable and less cyclical. “That is one of the messages we have for oil-and-gas workers that might be laid off,” he says. “Construction offers a much more stable career, and there are a lot of opportunities out there right now.” While drivers and equipment operators have the most translatable skills, transferred workers still would need extensive training. “You’re not going to become a journeyman electrician overnight,” McMurry notes.
Cultural issues remain. Some industry firms are skeptical that oilfield workers can get used to jobsites without “unlimited overtime.” Says Edwards, “Some employers get nervous about hiring oil workers because they leave again the minute the price of oil goes back up.”
At least one bull in the oil-and-gas sector already is predicting that trend this year. Harold Hamm, CEO of U.S. shale-oil producer Continental Resources Inc., has been widely quoted in recent weeks, speculating that per-barrel oil prices would double to $60 by the end of 2016. Hamm points to a rising domestic supply from horizontal drilling and hydraulic fracturing. Since Congress last month lifted a 40-year restriction on exports of U.S. oil to other countries, that supply now can be sold to a broader global market, says energy journalist Bill Loveless.
