Growth and large-scale retirements are driving the Canadian petroleum industry towards severe labour shortages. In fact, the Canadian petroleum industry may need to hire between 40,000 and 130,000 workers over the next 10 years. Visit the Petroleum HR Council’s websites at www.petrohrsc.ca or www.careersinoilandgas.com for more information.

1. The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020 March 2011 Petroleum Human Resources Council of Canada Funded in part by the Government of Canada’s Sector Council Program, Province of Alberta, Canada-British Columbia Labour Market Development Agreement, and Province of Saskatchewan.

3. Labour Market Projections and Analysis 2010-2020 Industry outlook Occupational outlooks Sector outlooks: Services Exploration and production Oil sands Pipeline Provincial outlooks: British Columbia Alberta Saskatchewan Rest of Canada Workforce considerations 2

6. Service industries – geophysical services, drilling and completions, and well services;

7. Pipeline transmission;

8. Natural gas processing; and

10. Facilitating the exchange of ideas and information; and

11. Providing industry-related information on workforce issues and career opportunities.4

13. Governments make policy and program decisions including immigration strategies, labour adjustment programs, and skills and training strategies.

14. Professional associations promote their professions and support their members.

15. Education and training institutions and organizations plan for program content, enrollment and funding.

16. Career practitioners and guidance counsellors make career recommendations.

17. Job seekers plan their careers.5

18. LMI Types The Council generates three types of LMI: Short Term HR Trends: provides a snapshot of labour market conditions and trends within petroleum workforce. Includes information such as workforce issues and trends, companies’ current and planned recruitment practices, in-demand jobs and locations companies are hiring for. Situational Analysis: outlines business, regulatory, social and technological trends and their impact on the petroleum workforce. Labour Market Projections and Analysis: provides labour demand and supply outlooks including projected gaps utilizing industry-generated employment drivers and key assumptions. Projections and analysis, which are available by industry total, sector, key provinces and core occupations, help inform effective workforce strategies for the Canadian petroleum industry. 6

19. The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020- An Overview

21. Core occupations.

22. Petroleum sectors: Services, Exploration and production, Oil sands, and Pipeline.

23. Key provinces: British Columbia, Alberta, Saskatchewan, and Rest of Canada.

24. Hiring Requirements:

25. Due to industry activity:

26. Also referred to as “expansion demand,” is the projected change in the number of workers required based on industry activity.

27. Based on occupational relationship to employment drivers.

28. Due to age-related attrition:

29. Also referred to as “replacement demand,” is the number of industry positions that will be vacated due to retirements and natural deaths.

30. Calculated using age-related attrition rate for each occupation.8

32. Labour supply/demand gaps: comparison of industry’s labour demand based on its hiring needs and its share of potential labour supply by core occupation.

33. Indicated as an occupation’s projected unemployment rate.

34. Compare projected unemployment rate to balanced unemployment rate.9

35. The Decade Ahead: Core Occupations *Titles reflect National Occupational Classification (NOC) 10

37. Oil sands: extraction, production, and upgrading of bitumen.

38. Services: contracted exploration, extraction and production services to the E&P and Oil sands sectors; excludes manufacturing and supply.

39. Petroleum services includes well services, oilfield construction and maintenance, production and transportation services.

40. Drilling and completions services includes drilling and service rig activities.

41. Geophysical services (also known as seismic) includes survey, permitting and reclamation, line construction, drilling and data acquisition.

42. Pipeline: mainline transmission for transporting daily crude oil and natural gas production in Canada.*Current employment numbers available for Offshore sector; however, Offshore employment projections are incorporated in E&P and Services sector. 11

43. The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020 - Petroleum Industry Activity Scenarios

44. 2 Price Scenarios = 3 Industry Activity Scenarios 13

45. Impact on Industry Investment and Activity 14

46. The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020 - Industry Outlook

47. Industry Outlook: Hiring Due to Industry Activity Levels 16

48. Industry Outlook: Hiring Due to Age-Related Attrition 17 An aging workforce will contribute to industry’s hiring requirements in a significant way.

49. Industry Outlook: Hiring Due to Age-Related Attrition (cont’d) 18 An aging workforce will contribute to industry’s hiring requirements in a significant way.

50. Industry Hiring Outlook – Low Scenario Age-related attrition drives industry’s hiring in low scenario. To replace retirees between 2010 and 2020, industry needs to hire approximately 39,000 workers. 19

51. Industry Hiring Outlook – Growth Oil/Low Gas Scenario While there will be some job losses between 2010 and 2020, new oil sands projects and the need to replace retiring workers drive the hiring of 53,500 workers. 20

52. Industry Hiring Outlook – Growth Scenario Industry expansion and workforce retirements between 2010 and 2020 drive the need to hire over 130,000 workers. 21

53. Industry Net Hiring Outlook 22 Regardless of the pace of economic recovery, the petroleum industry will be challenged to meet its hiring requirements.

54. 23 Core Occupations with Greatest Hiring Requirements in Growth Scenario

55. Labour Supply/Demand Outlook – Low Scenario 24 Job losses diminish the industry’s ability to attract labour supply from in-mobility sources, resulting in labour supply/demand gaps.

56. Labour Supply/Demand Outlook – Growth Oil/Low Gas Scenario 25 Industry’s main source of potential labour supply is new entrants, creating a productivity risk given that hiring needs to focus on replacing retirees. 13,501 46,479 33,027 7,050

57. Labour Supply/Demand Outlook – Growth Scenario 26 Increased activity enhances the industry’s ability to attract labour supply from in-mobility sources – mostly immigrants. 54,263 54,263 84,978 84,978 76,044 76,044 39,600 39,600

58. Labour Supply/Demand Outlook – Labour Shortages 27 Industry labour shortages return by 2012 in the growth scenario and by 2014 in the other two scenarios. Actual Projected

59. 28 Labour Supply/Demand Outlook – Key Findings Regardless of scenario, labour shortages are not going away.

61. Plant operators, steam engineers and power engineers

62. Maintenance trades

63. Production accountants

64. Field operators/specialists: slickline, snubbing, completions, Class 1 drivers

65. Rig crews (derrickhands in particular)

66. Environmental and regulatory specialists29

68. Geologists and engineers with knowledge of shale gas and oil reservoirs and well stimulation and completions

69. Measurement while drilling (MWD) specialists

70. Completions specialists

71. Fracturing (or fraccing) operators

72. Class 1 drivers/operators to get equipment and materials to the well site

73. Water and environmental management technicians and specialists

74. 1st, 2nd and 3rd class steam engineers30

75. Industry Outlook – Services Sector Workforce Consideration 31 A healthy Services sector workforce is critical to the petroleum industry as a whole. Oil sands is increasing its reliance on the Services sector.

77. Even though the industry’s workforce is projected to lose jobs in the low scenario.

78. Labour shortages are not going away – regardless of scenario.

79. Labour supply/demand gaps occur in all scenarios and begin as early as 2011 for some occupations.

80. The petroleum industry is already experiencing chronic shortages for some occupations.

81. Game changers such as unconventional natural gas, enhanced oil recovery and in-situ oil sands extraction have increased demand for certain occupations and created a need for new skills and knowledge.

82. The industry will need to diversify the labour supply pools it hires from.

83. Shortages of occupations unique to the industry will be a particular challenge because of limited labour supply opportunities.

84. A healthy Services sector workforce is critical to the petroleum industry as a whole.32

85. The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020 - Sector Outlooks

87. The trend towards supporting the Oil sands sector lessens the impact should low natural gas prices persist.

88. Despite job losses in the low scenario, the industry will need to hire workers across all scenarios.

89. Labour supply/demand gaps occur in all scenarios.

90. Labour supply/demand gaps begin as early as 2011.

91. By 2014 at the latest, the unemployment rate for field workers falls below 2007 levels.

92. High turnover adds to the difficulty the sector will have maintaining its workforce because a single position may need to be filled over and over. 34

93. Services Sector Hiring Due to Industry Activity Levels 35

94. Services Sector Hiring Requirements 36 Depending on the scenario, the Services sector will need to hire between 18,000 and 72,000 workers by 2020.

95. Services Occupations with Greatest Hiring Requirements in Growth Scenario 37

97. Age-related attrition is the key driver of hiring in the low and growth oil/low gas scenarios.

98. Sector is building new gas plants.

99. Increased requirement for steam-ticket plant operators and maintenance trades.

100. The key labour supply/demand risks for the E&P sector are:

101. Limited labour supply sources for petroleum industry-specific positions vacated due to age-related attrition; and

102. The ongoing need for a knowledgeable and innovative workforce as the sector plans and executes technically challenging unconventional oil and gas plays.38

103. E&P Sector Hiring Due to Industry Activity Levels 39

104. E&P Sector Hiring Requirements 40 Age-related attrition drives E&P hiring in both the low and growth oil/low gas scenarios.

105. E&P Occupations with Greatest Hiring Requirements in Growth Scenario 41

107. The addition of hiring due to age-related attrition will put significant pressure on the sector.

108. The shift towards in-situ technologies is changing the makeup of the oil sands workforce.

109. Increased need for steam-ticketed operators and water treatment specialists.

110. Increased requirement for petroleum industry-specific occupations such as petroleum engineers, SAGD/in-situ engineers, drilling coordinators etc.

111. Growing reliance on the Services sector. 42

112. Oil Sands Sector Hiring Due to Industry Activity Levels 43

113. Oil Sands Sector Hiring Requirements 44 Oil sands sector needs to hire workers regardless of scenario.

114. Oil Sands Occupations with Greatest Hiring Requirements in Growth Scenario 45

116. The combination of potential new projects on the horizon and hiring due to age-related attrition.

117. Pipeline workforce has the oldest demographic in the industry.

118. Competing with other petroleum sectors for workers. 46

119. Pipeline Sector Hiring Due to Industry Activity Levels 47

120. Pipeline Sector Hiring Requirements 48 Additions to the pipeline workforce is dependent on building new pipelines; however, hiring due to age-related attrition is significant for this sector.

121. Pipeline Occupations with Greatest Hiring Requirements in Growth Scenario 49

122. The Decade Ahead: Labour Market Projections and Analysis for Canada’s Oil and Gas Industry to 2020 - Provincial Outlooks

124. Even in the low scenario, the oil and gas industry employment levels stay relatively flat and age-related attrition results in the need to hire approximately 3,000 workers.

125. The Services sector is the province’s largest sector and will experience the most severe labour shortages.

126. In the growth scenario, this sector will add approximately 6,500 BC-based jobs or 74% of its 2009 employment.

127. New technology is driving the need for fraccing and completions operators.

128. The sector has to contend with high turnover rates among its field workers.

129. New gas plants will require steam-ticket operators and maintenance trades.

130. Industry activity has put significant pressure on community resources and the local labour market.

131. Increased industry activity is likely to further strain local housing, infrastructure and services. This could be a deterrent to attracting and retaining workers.51

132. BC-based Hiring Due to Industry Activity Levels 52

133. Hiring Requirements for BC-based Employment 53 13,501 33,027

134. BC-based Occupations with Greatest Hiring Requirements in Growth Scenario 54

136. Over 75% of industry’s hiring requirements are Alberta-based.

137. Workforce attraction and development initiatives will need to target all potential labour supply including women, immigrants, Aboriginal Peoples, youth and mid-career transitioners.

138. Alberta is home to many industry-specific occupations including drilling coordinators/production managers, geologists and geophysicists, and all types of engineers.

139. Labour supply sources for these industry-specific occupations are limited and any reduction human resources programs targeting these occupations will jeopardize industry’s ability to fill these roles.

140. Addressing Services sector workforce issues are key for the province given growing support to Oil sands sector.55

141. Alberta-based Hiring Due to Industry Activity Levels 56 127,645 (-4%)

142. Hiring Requirements for Alberta-based Employment 57

143. Alberta-based Occupations with Greatest Hiring Requirements in Growth Scenario 58

145. Services sector is the province’s largest sector and will experience the most severe labour shortages.

146. In the growth scenario, this sector will need to fill approximately 6,000 SK-based jobs – 91% of industry’s projected hiring requirements.

147. New technology is driving the need for fracing and completions operators.

148. The sector has to contend with high turnover rates among its field workers.

149. Saskatchewan has a long history of providing labour supply to the oil and gas industry.

150. Increased activity and age-related attrition is an opportunity to retain secondary and post-secondary grads in the province.

151. Industry activity has put significant pressure on community resources and the local labour market.

152. Increased industry activity is likely to further strain local housing, infrastructure and services. This could be a deterrent to attracting and retaining workers.59

153. Saskatchewan-based Hiring Due to Industry Activity Levels 60

154. Hiring Requirements for Saskatchewan-based Employment 61

155. Saskatchewan-based Occupations with Greatest Hiring Requirements in Growth Scenario 62

157. Nunavut is the only jurisdiction in Canada that does not currently have any petroleum production.

158. In 2009, the Offshore sector employed approximately 3,200 workers.

159. East Coast offshore industry will add approximately 1,000 jobs this decade.

160. Two new offshore projects – Deep Panuke (2011) and Hebron (2017).

161. Approximately 1,000 positions will need to be hired due to age-related attrition.

162. Hiring for offshore marine support will also be required.

163. Oil and gas employment in Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island, Yukon, Northwest Territories and onshore Nova Scotia and Newfoundland and Labrador was approximately 5,600 jobs in 2009.

164. Recent advancements in technology make unlocking additional oil and gas reserves across Canada very possible.63

166. Labour shortages are not going away – regardless of scenario.

167. The petroleum industry is already experiencing chronic labour shortages for some occupations.

168. Game changers such as unconventional natural gas, enhanced oil recovery and in-situ oil sands extraction have increased demand for certain occupations and created a need for new skills and knowledge.

169. The industry does not have a decade to address labour shortages.

170. Labour shortages across all core occupations occur as early as 2013.

171. A healthy Services sector workforce is critical to the petroleum industry as a whole.64

173. Drawing talent from diverse labour supply pools while continuing to attract traditional labour pools such as new graduates.

174. Capacity building within the petroleum workforce.

175. Managing labour costs while addressing labour shortages.

176. Increased collaboration on workforce solutions within the industry and with other stakeholders. The new reality is that labour supply is not unlike oil supply – the readily available sources are gone. 65