On this May Day it is timely to share an article by OPEC Secretary General, H.E. Haitham Al Ghais, released last Monday on the role of the oil and gas industry in global employment.

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“A job is never just a number on a spreadsheet. Behind every job is a person, a livelihood, a story. It is a man or a woman, a breadwinner, doing their best to provide for their families, putting food on tables and shelter above heads. Jobs are about enabling children’s education and saving for retirement. Jobs involve fulfilling individual potential, forging societies and fostering community spirit. There is a dignity to work.”

According to the Secretary General, the oil and gas industry plays an important role in global employment, alone supporting some 70 million jobs worldwide. Beyond the direct employment of highly skilled and specialized workers, the industry generates multiplier benefits for local and national economies. This includes providing opportunities for a wide range of companies in other parts of the supply chain from manufacturing, transportation companies, hotels, restaurants and retail.

From this perspective, the notion that the sector is currently experiencing a labor shortage trend is worrying. It is said that the younger generations are being pushed away from pursuing a career in the sector, and that fewer petroleum-related subjects are being offered at universities.

Influencing this thinking is the perception that the industry is not a viable long-term employment option, driven by the erroneous view that oil is not part of a sustainable energy future. This has been exacerbated by references to the potentially devastating number of job losses and massive layoffs expected in some net-zero energy pathways advocated by some energy stakeholders.

In the 2023 update to its Net Zero Roadmap, the International Energy Agency (IEA) foresees 13 million jobs lost in fossil fuel-related industries between 2022 and 2030. That is 13 million jobs lost in an eight-year period, equating to roughly 1.6 million jobs lost every year, 135,000 a month, or 4,500 a day.

The counterpoint is posited that new jobs will be created in alternative industries, but there are countless challenges to this and the transferability of job skill sets cannot be assumed.

Indeed, the IEA’s most recent World Energy Employment report states, “There are limits on the transferability of skills to clean energy sectors. Not all the clean energy jobs that are created will be co-located or share the same skills as those lost. Late-career workers may also be reluctant to switch industries as they likely earn more in oil and gas than the wages in most clean energy sectors: oil and gas workers are among the highest paid workers in any sector thanks to their high level of skilling, well-established labour representation, and the need to compensate for occupational hazards and mobility requirements.”

Specifically, on oil and gas sector jobs, the IEA has sent mixed signals about the labor needs of the immediate future. Almost a year before the IEA first launched its Net Zero Emissions (NZE) Scenario in 2021, the Executive Director of the IEA stated, in an interview with Anadolu Agency, “My main concern is there are millions of people around the world who work in oil and oil-related sectors. Natural gas and oil industries are also strong pillars for the world economy. If these industries collapse, they will have a negative impact on the global economy as well.”

In the IEA’s NZE Scenario, one that has recently been leveraged by policymakers, the oil and gas sector experiences a decline of more than 2.5 million jobs, or around 20%, in the period to 2030.

The mass job losses envisaged by the IEA’s NZE hangs like a sword of Damocles over oil and gas industry workers everywhere. Moreover, the impact of mass redundancies or the shutting of certain industries is not confined to the economic sphere. It can affect societal harmony too. There are enough past examples from around the world of communities that have struggled to rebuild following the forced closure of an industry.

OPEC has a clear and consistent message on oil industry jobs – the world will need more of them! Oil demand is expected to grow to 116 mb/d by 2045 and, to meet this demand and further develop technologies to reduce emissions, more workers will be needed.

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