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| Tue, 18th Oct 2022 11:06:00 |
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Starved of new talent: Young people are steering clear of oil jobs |
Who wants to work for the brands that brought you climate change?
In late May, António Guterres, the secretary-general of the United Nations, stood in blue graduation robes in front of a podium at Seton Hall University in South Orange, New Jersey. Looking out at the thousand-plus graduating seniors, Guterres told them that the world was facing a climate catastrophe — and it was up to them to stop it.
“As graduates, you hold the cards. Your talent is in demand from multinational companies and big financial institutions,” Guterres said in the commencement address. “But you will have plenty of opportunities to choose from, thanks to the excellence of your graduation. So my message to you is simple. Don’t work for climate wreckers. Use your talents to drive us towards a renewable future.”
If they hadn’t heard the advice from Guterres, they might have gotten the idea that digging up ancient oil deposits was not a promising career path from somewhere else. The billionaire Bill Gates recently predicted that oil companies “will be worth very little” in 30 years; CNBC’s loudest finance personality, Jim Cramer of Mad Money, has declared he’s “done” with fossil fuel stocks.
It’s part of a larger social reckoning that threatens to make business harder for oil companies. Big Oil is becoming stigmatized as awareness grows that its environmentally-friendly messaging, full of beautiful landscapes and far-off promises to erase (some) of its emissions, doesn’t match its actions. Well over half of millennials say they would avoid working in an industry with a negative image, according to a survey in 2020, with oil and gas topping the list as the most unappealing. With floods, fires, and smoke growing noticeably worse, young people have plenty of reasons to avoid working for the brands that brought you climate change.
This poses a hiring challenge for oil companies, with much of their current workforce getting closer to retirement. For years now, consulting firms have been warning the industry that it faces a “talent” gap and surveying young people to figure out how they might be convinced to take the open positions.
Meanwhile, solar and wind power are booming and luring young people who want a job that fits with their values. In 2021, according to the business group E2, 3.2 million Americans worked in clean energy industries like renewables, electric vehicles, and energy efficiency — 3.5 times the number that worked in fossil fuels. And this is likely just the beginning: Congress recently passed the Inflation Reduction Act, which is expected to cause an explosion of climate-related jobs.
“I do feel that there’s this big pincer movement coming for the fossil fuel industry — you know, they’re going to be pinched in lots of different directions,” said Caroline Dennett, a safety consultant who publicly quit working for Shell earlier this year because the company was expanding oil and gas extraction projects. “And that’s exactly what we need.”
‘Retention is a massive, massive problem’
If it weren’t for climate change, now might seem like the perfect time to drill for more oil. Russia’s invasion of Ukraine sent oil prices soaring this year, driving them up as high as $120 a barrel in June — the “boom” of the boom and bust cycle. The price has since dropped to $85, but could climb higher since OPEC, the oil cartel that includes Russia and Saudi Arabia, recently agreed to cut production by 2 million barrels a day.
With prices this high, oil companies would normally begin digging up more wells to increase production. But the calculus has changed. After years of losses, investors want their dividends. “Now we’re in a situation where the oil and gas companies are making a lot of cash flow … but the investors who stuck with those companies are basically saying, ‘Well, I stuck it out with you, give me my money back,’” said Peter Tertzakian, an energy and investing analyst, on the podcast Odd Lots this summer. Added to that is the growing pressure for financial institutions to divest from fossil fuels. All this, along with the “end of oil narrative,” has made investors hesitant to back new drilling projects, Tertzakian explained.
And even if investors were interested in expanding drilling right away, many oil companies don’t have extra drilling equipment lying around ready to use, or extra people ready to operate it. Trained and knowledgeable workers are retiring or moving to other industries. The average oil and gas worker is 44 years old, a recent report from Deloitte found. The industry has mostly rehired the 15,000 workers it laid off during the 2020 crash, according to data from the U.S. Bureau of Statistics. But the workforce numbers have been on a long downward trend since 2015, when oil prices took a plunge after a supply glut. The volatility of the industry — the cycle of laying off and hiring people — is another factor that makes the jobs unappealing, the Deloitte report said.
“Half of oil and gas professionals, I believe, would gladly leave the oil and gas industry tomorrow if they could get a renewable energy job,” said Dar-Lon Chang, who worked as an engineer at ExxonMobil for 16 years before resigning in 2019 over concerns about climate change. A recent global survey by AirSwift found that 82 percent of current oil and gas workers would consider switching to another energy sector in the next three years, up from 79 percent last year and 73 percent in 2020. Fifty-four percent of those thinking about leaving picked the renewable industry as a preferred destination.
“Retention is a massive, massive problem,” Dennett said. “They’re losing their most expert, skilled, and experienced technicians, engineers, designers, operators, mechanics … I think they will be starved of new talent.”
When Big Oil comes up in the news, it’s usually something bad — oil spills, climate lawsuits, or other dirty business. The industry has drawn comparisons to Big Tobacco, and this image has started to affect workers. “We don’t want to be the bad guys,” said one anonymous participant in a study surveying oil workers’ opinions about climate change as part of a recent paper in the journal Energy Research and Social Science.
Krista Haltunnen, the author of that study and an energy researcher at Imperial College London, said that many workers believe they can drive change within their company. “A lot of them think that they’re doing the best they can for climate change or for a better society, whether they’re right or not,” Haltunnen said. Dennett, for example, worked with Shell to make oil operations safer; Chang joined ExxonMobil after assurances from recruiters that the company was “seriously considering transitioning away from oil” and researching cleaner alternatives, and that he’d be working with natural gas — sold as the “bridge fuel” to a renewable future.
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