Decarbonisation puts 450,000 Canadian oil & gas jobs at risk

According to Natural Resources Canada, roughly 600,000 Canadians, located mostly in Alberta, Saskatchewan, and Newfoundland and Labrador are either directly or indirectly employed in the oil and gas sector. TD Economics estimates that between 50-75 per cent of those workers are at risk of displacement in the transition through 2050, equivalent to 312,000-450,000 workers.

While the hope is that many of those displaced will find a home in the clean energy sector, such a transition is far from assured, the report warns.

It recommends that Canada implements a broad retraining framework which will start by identifying the key skills needed in the clean energy sector. To jumpstart this, TD urges the government to focus on building clean energy infrastructure in the same communities that will bear the brunt of the energy transition.

Broad-based income support may also be needed to at least partially offset income losses due to displacement, including specific supports for older workers, such as pension bridging grants.

A similar fate awaits North Sea oil workers, with a recent report claiming that the UK government needs to invest £416bn over the next 30 years to help the sector transition to net zero.

The Canadian federal government’s recently updated climate strategy sets targets to reduce the country’s emissions by 32-40 per cent by 2030, with a goal to be completely emissions neutral in 2050.

“We shouldn’t just assume that the transition for workers moving from carbon-intensive industries to the clean energy sector is going to be smooth,” said Francis Fong, the report’s co-author and managing director of TD Economics.

He compared the rise of clean energy and its impact on the oil and gas sector to the broad layoffs experienced by manual workers in the 1990s due to the introduction of automation: “The economic dogma at the time was just to assume that labour markets would adjust and that people would find their place naturally in the economy of the future - and that clearly didn’t happen,” he said.

Oil firms have been slowly and reluctantly adopting decarbonisation plans after years of climate change denialism. Shell recently announced plans to become a carbon neutral business by 2050, although the firm’s decision not to cut upstream production and lay the onus of decarbonisation on customers was heavily criticised by campaigners.