Question for the O&G folks out there:
I am of the understanding that much of the jobs and income generated through the last few oil booms (pre-2007; 2011 - 2015) was due to high capital spending that allowed an amazing amount of wealth to be spread around. Combined with a relatively unconsolidated Canadian oil and gas sector, the high paying jobs multiplied: many companies all expanding capacity and production all at once, triggering huge wage escalation on everything from engineers to welders to business planners to truck drivers. The outcome of all this was actually quite unique economically as the boom tide did in fact raise many boats: while hardly evenly spread among the wider population, an portion of Alberta's population got significantly higher incomes for a while, particularly trades and professionals.
Fast-forward to today:
Prior to COVID, we pumped more oil than ever, but at a discount due to the capacity constraints of pipelines (e.g. the transportation differential would still exist if we had better capacity, however the gap would be less). Capital spending has been reduced significantly as prices do not warrant new capacity growth, focus has switched to operating efficiency which has had compounding effects, just like in the boom but unfortunately in the opposite direction. Companies close and consolidate, reducing jobs and removing duplicate positions. Focus on operating efficiency rather than pure growth is all about reducing the workforce, automating and controlling wages as well as no longer needing all the expensive labour to start and manage new projects to the same level (e.g. project managers, trades etc.)
So my questions are:
- Does pumping more oil still result in more jobs? While I assume that is true to some extent, if my preamble is roughly correct the relationship between more oil = more jobs has got to be significantly shifted from the previous boom perspective?
- E.g. we pump 4.5M barrels today but employ fewer than we did when we pumped 3.5M barrels (and trying to rapidly expand capacity)
- Is there a future where it is possible for the industry to employ the same or greater number of well-paid people? Surely some jobs will always exist, but more? or at the same pay rate?
I ask this because I am curious on if folks actually have legitimate reason to believe the past that our politicians hearken to could actually happen where more people are employed and the industry expands (in absolute or relative terms compared to the wider economy). I can see almost no reality where this occurs, but want to hear from the folks that think differently than me and why they think real possibility or not.
IMO, I can see scenarios where our production growing again, but can't see the kind of rapid job growth return with it for the reasons above. I fear that our single-industry, single-party, single-media province has had decades of brainwashing so many Albertans to rally for false hopes and blame false enemies, many of which will be unwittingly left behind whether the industry grows again or not.
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