You may have heard about the idea of "peak oil", where some experts predict that the world's ability to produce oil will peak within one or two decades. How does this affect your offshore employment prospects? Should you still chase after oil company jobs? After all, no more oil means no more jobs, right? Maybe we should all become farmers and grow our own food?
Well, it is still too early to panic. Oil prices are still high, around $110 per barrel. Consider that oil cost $70 in 2006, and under $50 in the early 2000s, we are not likely to see any significant drop in oil prices soon. This means oil companies will keep on looking for more oil, as well as develop better technologies to get more oil out of existing oil fields.
How will better technology help? Currently, we get 20% initial recovery rate out of oil wells. Another 40% can be recovered using modern techniques like water flooding and carbon dioxide flooding. In other words, we still have 40% of the oil left behind in our supposedly dry oil fields - that is billions of barrels of oil. Given continued high oil prices, oilfield services companies will soon find new ways to recover this last 40% of oil left in the ground. Do you still think oil company jobs will disappear?
Here is another fact to consider - only a small percentage of the Earth's surface has been explored for oil, mainly deserts and shallow seas. New technologies will make it possible to find and recover oil in deeper oceans. Offshore employment will definitely still exist. New offshore drilling jobs will continue to be created.
We should also not forget two alternative sources of oil: heavy oil and oil shale deposits. Heavy oil is much thicker than normal crude. It has the consistency of molasses, and is more difficult to pump out. With oil prices above $100, oil companies are now looking at the heavy oil fields in Alberta (Canada) and Orinoco (Venezuela). Undoubtedly, more heavy oil fields will be found and exploited. As the demand for more oil from China and India is unlikely to quiet down anytime soon, oil companies will continue to build new oil rigs to pump heavy oil. The equipment may change, but offshore employment will continue to grow.
Canada, USA, and Venezuela continue to sit on a considerable amount of oil from oil shale deposits - two trillion barrels of crude - more than all historical conventional crude and present reserves combined. The most famous of these oil shale deposits is the Green River Shale Formation encompassing the States of Colorado, Utah and Wyoming. It remains untapped, as the available technology today is still too crude and expensive. But with improving technology and continued depletion of conventional crude oil fields, it is just a matter of time before these oil shale fields start contributing jobs.
So where will all these oil company jobs and offshore employment opportunities be? According to a 2006 UK report on the energy sector, using data gathered from over 200 companies and major trade associations, there are major shortages in managerial, professional and technical staff. The lack of technicians, riggers, scaffolders, floormen and subsea engineers was highlighted. The same report mentioned that:
- 31,500 persons directly work for oil and gas companies and major contractors
- 223,000 persons work in the oil and gas supply chain
- 85,000 work in jobs created by spending from oil company employees - shops, restaurants, doctors, etc.
Certainly not all of this information holds true for the US and Canada in 2008 and beyond, but it is still food for thought. Not everyone needs to work as a roustabout for Shell. A little brainstorming will find you other jobs you can do in the oil and gas industry, e.g. oil refinery jobs.
As you can see, "peak oil" will not affect your offshore employment prospects or your ability to find oil company jobs. Of course, the equipment used on oil rigs will change and evolve, but that has been true since the 1900s.
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