How to ensure oil workers have access to clean energy jobs

As the world shifts away from fossil fuels and toward renewable alternatives, we inevitably see job losses in the oil and gas sector around the world. Meanwhile, renewable energy jobs are growing in line with capacity expansion. Many of those who have worked in the oil and gas sector are ideal candidates for the clean energy sector, as they have extensive experience in the energy sector, as well as the skills needed to support operations. Therefore, governments and the private energy sector must put in place mechanisms to facilitate the transition of workers and support the development of the green energy sector. In addition, governments around the world must consider how to overcome the geographical barriers associated with the transition from fossil fuels to renewables.

During the Covid-19 pandemic, many oil and gas companies were forced to lay off workers due to the dramatic drop in energy demand worldwide. However, as global energy demand has risen to record levels, many companies have rehired their employees. However, the global shift away from fossil fuels and towards renewable alternatives means that there are fewer jobs in the oil and gas sector than there used to be, leaving many workers without jobs to return to. However, there are more jobs in the energy sector today than there were in 2019, largely due to the significant growth in clean energy – a sector that now employs more workers than fossil fuels.

According to the IEA, energy employment reached almost 67 million workers in 2022, an increase of 3.4 million compared to pre-pandemic levels. While clean energy sectors created 4.7 million jobs between 2019 and 2022, to a total of 35 million, fossil fuel sector jobs are slowly recovering from the pandemic, meaning that by 2022 they will remain about 1.3 million lower than the pre-pandemic level of 32 million. The largest job growth was recorded in photovoltaics, wind power, electric vehicles (EVs) and batteries, heat pumps, and critical minerals extraction, which together employ about 9 million workers, with photovoltaics alone accounting for about 4 million jobs. In addition to jobs in the operational sector, huge growth was observed in construction and manufacturing, which created about half of the clean energy jobs.

While the number of clean energy jobs is growing, companies worldwide cite skills shortages as a major obstacle to increasing productivity, according to an IEA survey of 160 energy companies worldwide. The report found that the number of workers earning degrees or certificates related to energy sector jobs is falling far short of growing demand. IEA Executive Director Fatih Birol explained: “The unprecedented acceleration we have seen in the clean energy transition is creating millions of new jobs around the world, but they are not being filled fast enough.” Birol added: “Governments, industry and educational institutions need to implement programmes to provide the expertise needed in the energy sector to keep pace with growing demand, particularly in the production and construction of clean energy projects needed to meet our energy and climate goals.”

In the UK, the number of jobs in the North Sea oil and gas sector fell by 28 percent between 2015 and 2022, from 38,100 to 27,600, while the number of jobs in the clean energy sector increased by 29 percent to 26,600, indicates a clear change in capabilities. Clean energy jobs are growing even as the ruling Conservative Party has scaled back support for onshore wind and solar energy. Jonathan Noronha-Gant, senior campaigner at Global Witness, believes that “instead of flogging this dead horse, the government must face reality and give full support to the renewable energy industry and ensure the creation of well-paid jobs” in the sector, providing good conditions for UK workers… This would improve both energy security and reduce emissions.”

Meanwhile, clean energy jobs in the U.S. are growing, but they are highly dependent on geography. A 2023 report from the journal Nature Communications suggests that while many workers have the skills to transition from the fossil fuel industry to the clean energy sector, geography is a major barrier. The paper examines 14 years of fossil fuel employment and skills data and finds that many workers will have to relocate to work in clean energy as new renewable energy regions emerge in less conventional areas of the U.S. The report finds that without careful planning and targeted policies, it estimates that only about 2% of fossil fuel workers involved in extraction are likely to transition to green jobs this decade.

While jobs in the fossil fuel sector have declined and continue to decline, opportunities in the clean energy sector are growing. The global green transformation is changing jobs in the energy sector. There is huge potential to introduce mechanisms to support the transition of workers from the fossil fuel industry to the clean energy sector through government and private sector support. However, barriers such as geography still stand in the way of this change, which means more needs to be done to ensure that oil sector workers do not remain unemployed and that clean energy companies find the talent needed to accelerate the growth of energy capacity needed to drive the green transformation.

Author: Felicity Bradstock for Oilprice.com

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