03-03 Labour

It was a long time ago, 1979, just a year before my father died. And he said with much sadness that his business did not have a future. His tailors in the family clothing business had an average age of 56, and young people were just not interested in “picking up a needle”. And today that kind of hand-made custom clothing is gone and replaced by clothing made by machine.
Another interesting moment was in the late 1990s, and I was given a private briefing by officials of the Department of Manpower and Immigration. They told me that all the developed societies are going to face serious manpower shortages because of their aging populations.
The solution would be new technologies that reduce the need for labour and the immigration of skilled workers from around the world. India was suggested as a prime source of skilled labour.
It should be no surprise to anyone that the oil and gas industry is facing a manpower crisis. The average age of workers in this sector is around 50 years of age and half will retire in the next decade.
And there is real difficulty attracting young workers. And it is not just the shortage of scientists and engineers, but drill workers and truck drivers. There are stories of truck drivers earning $200K US a year in Texas.
The year I graduated from engineering in 1956, about 20% of the class went to work for either Imperial Oil or Shell. And today, Exxon (the parent company of Imperial Oil) and Shell are training something like 10,000 students annually.
Labour shortages usually mean things like dormant wells and fracking crews lacking truck drivers. And, of course, labour shortages mean higher wages.
But even money does not solve long-term labour issues. The issue is the growth and learning opportunities in an industry. This is what attracts young people who have had technical training. They are interested in the future and the future is about the burning of fossil fuels.
Sophisticated young engineers and scientists understand global warming and will take jobs where their beliefs are reinforced. This means in the energy sector, working for companies that produces energy from renewable sources like the wind or the sun.
Of all the challenges facing the oil and gas industry labour shortages are the most critical. Their only salvation will be higher energy prices, higher wages and poaching workers from around the world.