A previous blog post explained that the Alberta oil and gas industry had a net loss of over 33,000 jobs in the last decade because of accelerating automation and reduced project construction. Ongoing automation could result in 40,000 to 50,000 more job cuts by 2040. How will we replace those jobs?
The International Energy Agency (IEA) has some answers spelled out in its new report on employment in the global energy sector. Interestingly, the trends identified by the IEA are similar to those the Alberta Federation of Labour (AFL) discussed in its groundbreaking report, “Skate to Where the Puck is Going.”
The most important international trend is that diverse energy jobs are being created when entrepreneurial governments pursue clean energy industrial policies that result in new investment in infrastructure, manufacturing plants, and mines. China, the United States, and European countries have all adopted this approach. They are all subsidizing the development, production, and adoption of clean energy technologies in a very significant way. The race is on to see which country or region will be the new industrial superpower.
“The unprecedented acceleration that we have seen in clean energy transitions is creating millions of new job opportunities all over the world – but these are not being filled quickly enough,” said IEA Executive Director Fatih Birol.
The United Conservative Party (UCP) government has not positioned Alberta well to generate these diverse energy jobs. Premier Smith dealt the wind and solar industries a serious blow by “pausing” development for seven months. And the UCP government’s Emissions Reduction and Energy Development Plan is heavily focused on protecting incumbents in the oil, gas, and electricity sectors rather than stimulating growth in the emerging diverse energy industries.
“The UCP is protecting the interests of oil companies’ foreign shareholders rather than those of working Albertans,” says Gil McGowan, president of the Alberta Federation of Labour. “Smith has bet on the energy status quo instead of the energy transition. With the IEA predicting peak fossil fuel demand by 2030 or sooner, the status quo will increasingly be disrupted. Thanks to the UCP, the odds are very good that Alberta will be grossly unprepared to cope with disruptive change when it arrives.”
Here are three things you need to know about the rapidly changing world of energy employment.
Fewer fossil fuels workers, far more clean energy jobs
“Energy employment reached nearly 67 million in 2022 — growing by 3.4 million over pre-pandemic levels. Clean energy sectors added 4.7 million jobs globally over the same period and stand at 35 million, while fossil fuels jobs recovered more slowly after layoffs in 2020 and remain around 1.3 million below pre-pandemic employment levels, at 32 million.” – IEA World Energy Employment 2023, executive summary.
These trends aren’t good news for Alberta. The number of production jobs has fallen, especially in oil. Gas sector employment is growing but only thanks to LNG, which in Canada will be produced on the West Coast and is unlikely to see the kind of expansion taking place in the United States, Middle East, and Australia. Hydrocarbon extraction is a mature industry, and companies are focused on lowering production costs, primarily by replacing workers with technology.
What kinds of clean energy jobs are we talking about?
Construction and manufacturing lead the way. They represent more than half of all energy jobs, according to the IEA, and grew by 2.6 million over the past four years. Five sectors (solar, wind, electric vehicle and battery manufacturing, heat pumps, and critical minerals mining) are responsible for over half of those jobs. Alberta isn’t likely to benefit from all those clean energy jobs, but it could for some.
Since 2019, $5 billion has been invested in over 5,000 megawatts of Alberta wind and solar projects that created 5,430 jobs. This was three-quarters of all Canadian renewable energy installations in 2022. The UCP government’s ill-advised 7-month renewables “moratorium” threatens many Albertans’ jobs and endangers tens of billions in potential future investment. In Skate to Where the Puck is Going, the AFL argued for rapidly building out the province’s electricity sector using wind, solar, and geothermal energy.
The report also advocated for other clean energy industrial strategies, like taking full advantage of Alberta’s critical mineral potential. The province doesn’t have all the minerals that go into a battery, but it has plenty.
The real potential, though, is in refining and processing those minerals into battery metals. Almost 80% of that processing capacity is currently in China. With the United States pushing a rapid build out of electric vehicle and battery manufacturing, processing will quickly become a bottleneck for North American battery plants. Unfortunately, this clean energy opportunity isn’t on the UCP’s radar.
Energy worker shortages
“Science, technology, engineering and mathematical degrees relevant to the energy sector are not rising fast enough to meet demand for new workers with these credentials. The gap is even more severe for vocational jobs.” – IEA World Energy Employment 2023, executive summary.
On average, energy industries require more highly skilled workers than other sectors. Certifications of technicians have flatlined in Europe and the US while dropping by 9% annually in China prior to the pandemic. At the same time, the IEA estimates that jobs requiring certification are forecast to grow 8% per year in its net-zero scenario. The most acute shortages are not surprisingly in the areas of most demand: construction and installation.
Even though Alberta oil and gas employment has decreased by more than 33,000 jobs in the last decade, the industry can’t find enough employees, especially in the services sector. Young workers worry about the sector’s employment volatility and climate record. The University of Calgary eliminated its petroleum engineering degree because not enough students enrolled. And skilled trades shortages are a big problem in Alberta, just like everywhere else.
The global trends are clear: employment in oil and gas is falling even though production is growing, while clean energy employment is rapidly rising.
Many skills transfer from oil and gas to clean energy
“We estimate that half of workers in fossil fuel sectors who face redundancy risks this decade have skills demanded by growing clean energy sectors. Many of these workers could switch into new roles with around four weeks of additional dedicated training.” – IEA World Energy Employment 2023, executive summary.
This is important for Alberta.
Suncor, for example, recently cut 1,500 jobs while it ramps up deployment of autonomous haul trucks in its oil sands mining operations. Imperial Oil is growing its fleet of autonomous haulers. Soon every oil sands mine will be using them. These are good union jobs that won’t be coming back.
The IEA estimates that only four weeks additional training is required to prepare laid-off workers for clean energy employment. Most of the training can be done on the job. Oil and gas workers can more easily transfer to jobs in hydrogen supply and transportation, carbon capture utilization and storage, geothermal, biofuel, and biogas.
But Alberta needs to grow the industries that will provide the new jobs. The UCP are doing too little, too slowly, to keep up.
Conclusion
Perhaps the most important idea in Skate to Where the Puck is Going is that Alberta can build new clean energy industries that use some or all of the province’s oil and gas production as feedstock. This would enable Alberta to maintain many of the existing oil and gas jobs, while adding many of the new energy jobs described in the IEA report.
The AFL is advocating for developing an advanced materials manufacturing sector using bitumen and captured carbon dioxide as feedstocks. Building out this sector, for example, would require construction of new plants to provide carbon fibre precursors and turn that precursor into carbon fibre panels. New supply chains would create even more new jobs.
This is just one example of the creative solutions the Alberta labour movement is bringing to the table.
“If Alberta follows a strategy similar to the one outlined in our plan, at least 200,000 new jobs could be created in our province,” says Gil McGowan, president of the AFL. “That’s more than peak oil and gas employment 10 years ago. If we’re smart, Alberta can be more prosperous than it’s ever been.”