Four challenges affecting the US oil and gas industry

Four challenges affecting the US oil and gas industry

According to U.S. Energy Information Administration, by the end of 2013 the United States is forecasted to surpass Russia and Saudi Arabia in its production of petroleum and natural gas hydrocarbons, becoming the number one producer of oil and gas globally.

 

This has resulted in the dramatic demand for the expansion of the nation’s energy workforce, which has already experienced a 41% increase since the end of the recession in July 2013, as the Bureau of Labor Statistics declared.

 

The increased energy demand accordingly requires increased labour. For the next two years, four recruiting trends have been identified which will continue negatively affecting the industry, corporations’ bottom lines and the energy market as a whole.

 

The four recruiting trends are listed below.

 

  1. Boom in the energy industry: the demand for drilling operations is increasing with rising oil prices (in excess of $100 per barrel). In 2012, 2.1 million jobs in the energy sector were added to the U.S. economy and this figure is predicted to increase to 3.3 million by 2020.

 

  1. Shortage of talent: Increase in the demand for energy and enlargement of operations to exploit new opportunities has led to an increased need for professional engineers. U.S energy industry estimates that there will be a requirement for at least another 5,000 engineers by the end of this decade.

 

  1. Ageing workforce: Due to the low oil prices in 1980s, the experienced workforce in the industry is generally older and nearing the retirement age. This is exacerbating the current talent shortage pressure, increasing concern for the loss of knowledge and experience in the near future. It has been calculated that 50% of the current workforce will retire within the next 5-10 years.

 

  1. Emphasis on safety: Owing to the history of recent incidents, oil and gas companies are working on improving the reputation of the industry by developing tighter regulations which focus on safety and corporate responsibility. Overall, the energy industry has over a million employees nationwide and contributes to over 4% of the country’s GDP.

 

 

A challenging market for employers is emerging in which costs are rapidly growing and new resources are being discovered.

 

Adam Berk, Principal, Human Capital, Performance & Reward at Ernst  & Young, told Rigzone: "These four trends are global with talent being shifted throughout the world to fulfil the demand and support of these operations."

 

Sources:

 

http://www.rigzone.com/news/oil_gas/a/129918/Four_Oil_Gas_Recruiting_Trends_Plague_US_Industry

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