The growing amount of automation in the oil industry is shaking up the human workforce. Where will these skilled workers go in the wake of the dwindling need for a human hand?
In days gone by, workers on an oil rig would carry various wrenches and piping tools, but today they are more likely to be carrying a laptop. At least, that’s the word from Donald McLain, the chairman of the industrial programs department at Victoria College, who says oil industry automation is on the rise.
Traditionally, Oil companies have been able to offer the most competitive salaries to highly-skilled engineers and rig workers alike due to their extremely lucrative commodity and the delicate nature of working on a rig, but it seems like big oil may have a different kind of workforce in the future.
McLain has worked as a rig hand for 25 years, which has put him in a position to opine knowledgeable on the current state of offshore jobs in the oil drilling sector. He is acutely aware of the rising tide of laid-off oil workers, and one of his most recent efforts is training these workers for more technical jobs in the industry.#automation leaves no stone unturned by a #robot including in oil industry.Click To Tweet
You could call the last few years a “boom and bust’ period for the oil industry, but the oil market never actually busts. We have seen a downturn, however, in the last couple of years, and the resulting shock has led industry leaders to analyze the ratio of humans to robots on their rigs. Oil industry automation, it seems, is on the rise, and as usual, that is causing a drop in the use of human labor.
The human workforce is being let go from an increasing number of offshore oil rigs, which begs the question: Where have all the people gone, and why are they being let go?
What’s Eating the Oil and Gas industry?
According to a survey by the Pew Research Center, 65% of Americans prefer the development of alternative energy sources, as opposed to 27% who believe that the expanded production of fossil fuels is the way to go, and this has contributed to a downturn in the oil business that has given execs some time to contemplate automating their workforce. As is the case with many fields in the industrial and agricultural sector, very efficient automation can cut a lot of costs out of the production process, so it is an easy decision for them to make from an economic standpoint.
Rigs have improved their efficiency over the years. For example, Angie Sedita of UBS Corp says that rigs in the shale industry require half as many workers as it did at the height of the oil boom in 2015, and the improvements that make this possible often require software specialists rather than roughnecks.
With the current trend of technology in the oil drilling sector, engineers can design an oil well at their desks, allowing an automated system to draw up a model and send instructions to other mechanical systems that build it. That means that one software engineer can adequately cover the operations of more rigs, simultaneously making them more in demand while lowering the need for a large number of them.
The transition of workers to robots isn’t entirely unheard of in Industry 4.0, and that is why people like McLain are promoting education and retraining for many laid-off oil workers.
With oil Industry Automation, Where Will all the Labor go?
oil industry automation is bringing us from enhancing the abilities of roughnecks to outright replacing them, which makes one wonder where those skilled workers will end up.
When NASA made budget cuts in Houston, many of the highly skilled engineers went to work for the oil and chemical industries because they were the only other places where these individuals could both use their very specialized skillset and get paid handsomely for it. If the oil option is also limited, where will these people find work?
Some of the workers will leave the industry altogether, but many who have software engineering experience will likely find new places to go in the energy sector. Also, the current trend of oil industry automation leaves a void where start-ups and new companies based on renewables can flourish, so some may also side-step into the renewable energy sector.
For those workers that the oil industry still needs, the current U.S. administration is hopeful that there will be more jobs in the shale sector, according to Jay Colquitt, the founder of OilfieldTrash.com. The hope is that Trump will open more federal lands up for drilling, and if that happens then the rise in jobs will follow. Luckily for them, modern technology isn’t yet at the point where it can eliminate the human presence from an oil drilling team, but if I were them, I would be wary of what Industry 4.0 will bring to automation efforts.
After all is said and done, it seems that there is a wealth of talent out there that will soon be looking for a new direction in life, or simply a new place to work. With their skills and experience, they will likely land somewhere, but time will tell us if that means they stay in the oil and gas sector, or go somewhere else.