It’s been a long time since the oil industry got good news about the jobs picture. But a recent Goldman Sachs report is foreseeing that a massive influx of much-needed oil jobs could be soon be on the way.
Between now and the end of 2018, Goldman predicts that 80,000 and 100,000 jobs will need to be added to the industry to accommodate ramped up drilling activity. According to CNN, the figures were calculated based on estimated growth that could create demand for 700 new oil rigs — with each one requiring an average of 120 to 150 employees.
Even if Goldman is right, the new jobs won’t replace all of the positions lost after the dramatic drop in oil prices that started in 2014. Since then, the industry has seen nearly 170,000 jobs wiped out as dozens of companies looked for quick cuts to avoid bankruptcy while drillers dramatically scaled back production.
Oil prices are still hovering low — around $38 on Monday. And the country is still in the grips of a supply glut that is keeping prices from rebounding much higher.
Yet, analysts at Goldman as well as Morgan Stanley are expecting the supply-demand situation to rebalance itself by mid-2017, which will help the industry recover.
The next question is: Will the workers be there to fill the gaps? A few weeks ago, government data showed that the U.S. added 287,000 jobs in June, which helped keep the national unemployment rate below 5 percent. And, as Louisiana Oil and Gas president Don Briggs recently pointed out, many oil workers have likely moved on.
“That’s a hard time to go through, losing your job and then having to start all over,” Briggs said. “Things may come back, but in the back of their minds, they’re going to be thinking, ‘Yeah there’s no way I’m going to get back into the industry.’”
Jeff Bush, president of Denver-based CSI Recruiting, recently expressed the same concerns to CNBC and said that factors such as dropping enrollment for petroleum degrees and fading interest in the industry could keep many from returning.
"I don't see how the industry comes back to any level of activity that is busy without a breakneck amount of chasing bodies, and there just aren't going to be enough to go around," he said.
Yet, oil companies can bank on a few factors that might ensure they can fill jobs.
While many of the workers flushed out of the oil industry have indeed gone on to find work in the renewables sector or construction, the specialized knowledge of working with petroleum engineering and geology might have kept many others from settling into new careers.
And Goldman says that oil jobs are about 63 percent higher than industries like construction and a whopping 84 percent better than the national average, which could lure many workers back.