Labor shortage
It’s a tough sell to lure workers back to Canada’s remote oil sands region.
After years of being a magnet for job seekers, Canada’ s oil patch is turning into a bit of a no-go place — and that’s making a recovery harder.
Drilling and equipment providers are finding it a tough sell to lure workers back to Alberta’ s gravel roads and remote camps, where temperatures can drop below minus 40 degrees, after massive job cuts in the past years left lasting bad memories. Many who had moved there returned to their home provinces and found jobs in construction, mining, fishing or forestry.
As producers seek to shift back to growth gear, the labor shortage adds another headwind to an industry challenged by high costs and middling crude prices. While an OPEC-driven market improvement from last year’s doldrums means oil services providers are in high demand again, they now have less sway to attract drivers to haul equipment and crews to man fracking rigs.
“We need more crews and more equipment, but those extra people aren’t coming back,” said Mark Salkeld, president of the Petroleum Services Association of Canada.
Trican Well Service, a Calgary-based provider of services like fracking, cementing and well monitoring, probably missed out on as much as $15 million in revenue in the first quarter because it didn’ t have enough workers to meet customers’ demand, CEO Dale Dusterhoft said.
The company is aiming to hire 200 people by the end of the summer but expects to miss that target. Once the new workers are hired, they’ll require at least two months of training before they’re turned loose in the field.
“We can’t really get them all as quick as we want,” Dusterhoft said in an interview. “So it probably delays our growth a little.”
While the industry is no longer in a position to offer the kind of salaries paid when oil sold for more than $100 a barrel, there’s more to workers’ reluctance than just money. Some who were fired during the downturn took jobs in other sectors that may pay less, but feel safer, said Garnet Amundson, CEO of Essential Energy Services.
“When we went to try and bring some of those folks back, the most common question we got was, ‘Do you have steady work? If I come back, how do I know I’m not going to be laid off in three or six months again?’ ” Amundson said.
The nature of the work itself is also keeping wage earners away from Alberta. Jobs require long hours on the road or weeks away from home in remote locations of a sparsely populated province that’s bigger than France, with winter temperatures close to Siberia’s.
“We can’t really get them all as quick as we want. So it probably delays our growth a little.” Dale Dusterhoft, Trican Well Service