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Vol. 19, No. 21 Week of May 25, 2014
Providing coverage of Alaska and northern Canada's oil and gas industry

Strong jobs outlook

Thousands of workers needed to sustain Alaska oil industry, workforce plan says

Wesley Loy

For Petroleum News

Alaska will need thousands of new, highly skilled oil and gas workers to meet industry demand through the decade, the state Department of Labor and Workforce Development says.

The bulk will be needed to replace retirees or people who otherwise leave the industry, the department says.

The strong employment outlook reflects expected industry activity including new exploration and production projects. It doesn’t count megaprojects such as a trans-Alaska natural gas pipeline, which could spark a huge hiring boom should it ever get off the drawing board.

The department makes its projections in the new “Alaska Oil and Gas Workforce Development Plan 2014-2018,” available at http://tinyurl.com/o6dlgms.

An industry steering committee contributed to the plan. The committee included representatives from Buccaneer Energy, TransCanada, Shell, BP, Tesoro, Doyon, ASRC Energy Services, ConocoPhillips and Carlisle Transportation.

Alaska’s ‘renaissance’

“Alaska’s oil and gas industry is undergoing a renaissance,” state Labor Commissioner Dianne Blumer wrote in an introductory letter. “Favorable market conditions, well-timed and properly structured incentives, and a fair tax structure focused on new investment have all contributed to a business climate that encourages new investment.”

Blumer continued: “Across the state we see increased exploration, reinvestment in legacy assets, and development of new fields like Point Thomson, the Colville Delta, and the Greater Mooses Tooth unit. These investments mean opportunity and jobs for Alaskans.”

The plan updates the “Alaska Oil and Gas Strategic Training Plan” published in 2008. The new plan expands the industry definition to include downstream sectors such as pipeline transportation, refining and related construction and manufacturing.

“This definition of the industry compels a more expansive examination of the industry’s workforce composition, future workplace demand, and the supply of potential workers to fulfill those needs,” the new plans says.

Since the 2008 plan was published, the overall trend for oil and gas employment has been upward, the Department of Labor says.

“Economic factors, aging oil fields and infrastructure, development of smaller satellite fields, and more challenging exploration characteristics have contributed to this trend of increasing employment, despite declining oil production in the state,” the plan says.

Replacing baby boomers

A big challenge for the energy and mining industries nationally is age. About a third of the U.S. workforce is composed of baby boomers poised to retire by the end of this decade. This situation is reflected in Alaska’s oil and gas workforce.

A “notable paucity” of oil and gas workers age 30 to 45 was apparent in Alaska’s workforce by 2011, the workforce development plan says.

Age information is not available for all Alaska oil and gas workers. Using the Alaska Permanent Fund dividend database, however, the Department of Labor is able to get a good handle on the resident workforce.

Seven out of 10 workers in the Alaska oil and gas industry were Alaska residents in 2011, the plan says.

“In total, 6,566 resident workers (32.4 percent) are likely to reach retirement age within the next five to 10 years,” the plan says. “Taking into consideration the high level of earnings, physical demands, and operating environment common to the industry, the average retirement age is estimated at 58 years.”

Hot jobs

Oil and gas offers some of the highest paying jobs in the state. Average annual earnings for the industry exceeded $120,000 in 2011, the plan says.

“Of the 216 occupations for which the Alaska mean wage is available, chief executive officers, engineering managers, commercial pilots, chemical engineers, lawyers, geoscientists, and other construction and engineering managers earn the highest wage in the Alaska oil and gas industry,” the plan says.

A Department of Labor analysis showed that “an estimated 2,000 new workers will be needed by the Alaska oil and gas industry between 2010 and 2020 as a result of growth. An estimated 5,500 will be needed to replace workers who retire or otherwise leave the industry.”

The industry steering committee determined the workforce development plan should focus on occupations needed for exploration and production. While the industry’s development and construction needs remain important, the scale of most development projects likely to occur during the planning period “will most likely be accommodated by the existing workforce.”

The plan adds: “Large-scale projects, not yet fully sanctioned, are likely to occur outside of the current plan.”

These major projects, all potentially huge job creators, include a pair of proposed trans-Alaska natural gas pipelines, and the Donlin Gold mining project, which could draw Cook Inlet gas for power.

The industry steering committee determined five occupational groups will be in high demand over the next five years: engineering; the geosciences; health, safety, security and environment; maritime; and remote sensing and inspection.

This last one is being driven in part by the maintenance demands of aging oil fields.

Dirty work

Of course, producing oil and gas in Alaska requires more than the guys in suits and offices.

In terms of total worker count, the Department of Labor in 2011 found that roustabouts topped the list of Alaska oil and gas occupations with more than 1,500 workers.

A roustabout, according to the Schlumberger’s online oilfield glossary, is “any unskilled manual laborer on the rig site.”

Roustabout is among positions in the industry that see a lot of turnover. The workforce development plan says that between 2010 and 2020, we’ll see 315 roustabout replacement openings.

Turnover projections for other positions such as drillers, unit operators, petroleum engineers and refinery operators can be found in the plan.

The plan also includes a sweeping overview of the many educational and apprenticeship opportunities available to prepare people for work in oil and gas and related fields.

Two programs of note are ANSEP, the state university’s Alaska Native Science and Engineering Program; and APICC, the Alaska Process Industry Careers Consortium, which has people from companies such as BP, ConocoPhillips, Shell and Alyeska Pipeline on its board of directors.



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