Due to the sudden and drastic drop in oil prices over the last several quarters, many oilsands companies are suddenly faced with the need to cut costs and reduce workforces. While oilsands projects were very profitable when oil was going for $70-80 a barrel, the recent market conditions have slowed growth in the industry and caused concern among investors who have already spent billions in infrastructure, technology and expansion.
Over the next five years, the oilsands industry is expected to shrink by 1%, and demand for construction workers will be reduced by nearly 84%, meaning a loss of more than 10,000 jobs especially for construction workers in the field. This comes as a result of slowing expansion as well as increased reliance on automated technologies. In some cases, oilsands employees have already seen the results of these cuts such as when Suncor went to driverless trucks, leaving drivers at their mining sites without work.
Despite the current market prices for oil by the barrel, the industry is expected to recover slowly, and reach levels near it’s previous price point by the year 2020. Until then hiring will continue to slow down, and layoffs may be inevitable. Companies are going to be focused more on retaining their highly educated and skilled engineers and designers rather than their field hands, as the engineers will help them overcome their market struggles and create more efficient technologies that require less labor. As construction operations begin to downsize, it is expected that the industry will add roughly 9,800 jobs in the operations and maintenance fields, indicative of shifting expectations about the future of oilsands mining.
People employed by major oilsands mining companies should be wary of the changing tides that the industry now faces. As other oil extraction methods become more efficient, and prices continue to fluctuate wildly, investors will be shy about pouring more energy and money into any of the projects that were previously planned. Fortunately, for investments that were already made based on projections leading up to 2020, there will continue to be jobs available to finish out the projects at hand, and prepare for the next five years once oil prices have begun to recover. While the future is not certain, there are definitely some good signs that oil will return to higher prices and more jobs will become available once this slump is over.