Drilling industry faces shortage of workers

CALGARY — There’s been a shortage of skilled workers capable of drilling technically challenging oil and gas wells this winter, the president of an industry group says.

CALGARY — There’s been a shortage of skilled workers capable of drilling technically challenging oil and gas wells this winter, the president of an industry group says.

“In many of those companies, they actually turned work down in the first quarter either because they couldn’t get enough people to staff up or they were reluctant to staff up for what might amount to a fairly short period of time,” Roger Soucy, who heads up the Petroleum Services Association of Canada, said Wednesday.

Most natural gas drilling in Canada takes place in the winter, when the ground is frozen solid. Activity tapers off when the earth becomes mushy and muddy, in a period that industry types call “spring breakup.”

For unconventional gas plays, it’s not only a matter of finding enough workers, it’s about finding the right types of workers as well.

“There’s no question that it does require a high level of expertise and skill. Typically those people aren’t hanging around street corners,” Soucy said.

In the Horn River Basin formation in northeastern British Columbia, wells are drilled horizontally — rather than vertically — to access more of the gas trapped in the shale rock.

In addition, a mixture of sand, water and chemicals is pumped at high pressure to fracture the rock and free the gas.

A conventional well, by contrast, requires a hole to be punched straight down into the ground, with natural pressure in the reservoir taking care of the rest.

The recent labour shortage is still a far cry from what Alberta’s oilpatch experienced in the boom 2007 and 2008, when workers were recruited from across Canada and abroad.

For example, the industry drilled some 25,000 wells in 2007, while the forecast for 2010 is for about 9,000.

“Certainly we don’t have the same pressures that we did two years ago, three years ago with regards to employment. The levels of activity are way down,” Soucy said.

Companies that produce oil need more workers right now than ones that chase conventional natural gas, said Gary Leach, head of the Small Explorers and Producers Association of Canada.

Numerous oilsands projects that had been delayed during the recession have been brought onto the front burner in recent months. Activity is also heating up in conventional oil plays, like the Cardium in west-central Alberta.

But for natural gas, “it’s still a different world,” Leach said.

“I think it’s still a little bit more sombre in terms of spending and price outlook and I think probably we’re going to continue to see some more rationalizations, consolidations, recapitalizations — but not the kind of activity that’s necessarily creating direct employment.”

Jobs in areas like finance, human resources and marketing can translate from one side of the industry to the other. However, skills that are more tied to the production activity itself — like geoscience — do not.

“The industry’s very big, very complex. It’s got very discrete subsets to it,” Leach said. “And sometimes it’s not so easy to jump across those boundaries.”

The unemployment rate in Alberta sits at 6.9 per cent — lower than the national average, but higher than Saskatchewan and Manitoba.

While the province continued to shed jobs in the first few months of this year, demand for workers in the construction, oil and gas and manufacturing sectors is on the rise, said ATB Financial senior economist Todd Hirsch.

“I get the sense that we’re just on the tipping point of moving back into some tighter labour markets, and, in fact, some labour shortages. We’re not quite there yet, but you get the sense that it’s building,” he said.

Those industries are starting to be squeezed now mainly because they saw the most dire job losses in the depths of the recession, he said.

In the fourth quarter 2009, more workers left Alberta than migrated into the province, and Hirsch said he doesn’t see that trend changing any time soon.

“I don’t think in the first quarter here that we’re going to see them all stampeding back. They’re going to want to see maybe even a full year of certainty that … this job is going to stick around.”