Renewables

Oil and gas execs bet on renewables: survey

Renewable energies will soon overtake oil, gas and coal as the world’s prevailing energy sources. Skeptical? Just ask someone in the know, like an oil and gas executive.

In a survey recently conducted by an international executive search firm, the majority of oil and gas industry leaders surveyed said they believe renewables are quickly gaining on fossil fuels. And the head of Canadian operations with the firm says he doesn’t understand—or even agree with—the survey results.

“To be perfectly honest, all of us were surprised by that result,” says Brian Coffman, general manager of Maxwell Drummond International’s Canadian operations. “It does seem to run counter to what I hear in Calgary when I go to conferences where renewables are discussed.”

It also runs counter to the conclusions of some of the world’s major energy forecasting bodies.

For example, a study released last November by the International Energy Agency projected that renewables, including hydro, wind, solar, geothermal and biomass, would only meet about 14 per cent of world energy demand by 2035. That’s up from about seven per cent now.

Meanwhile, it said fossil fuels, such as oil, natural gas and coal, would meet almost all of the remaining demand, while overall primary energy demand grows by about 36 per cent by 2035.

That’s a forecast Coffman says he would not differ with—but it wasn’t what the more than 100 executives from major oil and gas companies and oilfield service contractors told Maxwell Drummond in its annual survey. Executives in the United States, Canada, Europe, Asia, Africa, Australasia and the Middle East were questioned by the firm.

Kevin Davidson, chief operating officer of the executive search consultancy, was also surprised with the results, which contradict last year’s survey.

“The results were illuminating on many different levels, but one discovery particularly interested us,” he says. “In contrast to last year’s survey, alternative energy is now at the forefront of energy business leaders’ minds as an increasingly valuable source.”

CHANGING THEIR TUNE

Davidson notes that in 2010, oil and gas was expected to be the “most substantial contributor” to the energy mix in the next five, 10 and 15 years. “But in 2011, more than 90 per cent of respondents believed that by 2025, renewables will be the most substantial energy source.”

Coffman says there has been a growing trend towards energy executives citing the use of renewables. But the results this year are at odds with virtually all other research by independent bodies.

He speculates it might have something to do with stubbornly high oil prices, with executives believing there is a form of demand destruction occurring that will cause more of the world’s population to turn to renewables.

Ironically, he says his firm has a vested interest in this not being so, since much of its business is done with those in the conventional oil and gas industry.

“Maxwell Drummond does have a renewables section in our London office, but it’s a very small part of our portfolio at the moment,” Coffman says.

CALLING ALL STUDENTS

Yet another irony is that those same executives who said renewables will become the prevailing energy source are also overwhelmingly in favour of encouraging students and graduates to consider a career in energy.

Coffman says that would suggest most of those same executives don’t see the conventional energy sector as a “sunset industry,” since it dominates the energy space now.

An overwhelming 98.2 per cent of respondents said they would encourage students and graduates to consider a career in energy.

The survey also dealt with an emerging issue in the energy industry and the economies of Alberta and Canada—significant projected shortages of skilled and professional workers in the sector.

As previously reported in Energize Alberta, the Petroleum Human Resources Council of Canada (PHRCC), a federal government-created sector council that monitors labour needs in the industry, predicts there could be a shortage of as many as 130,000 workers in the next decade if oil and gas activity is strong. That shortage would be caused by retirements and the growth of labour-intensive sectors like the oilsands.

Coffman says the survey respondents identified existing “gaps” in worker requirements in areas including reservoir and petroleum engineering, drilling and completions, field operations, and subsea and marine skills. Those gaps ranged from 39.6 per cent in the case of subsea and marine workers to between 41.4 per cent to 49.5 per cent in the other skilled areas.

According to 63.8 per cent of respondents, the “poor public perception” of the oil and gas sector is largely responsible for those gaps. The PHRCC, and other industry bodies have reached a similar conclusion and are trying to educate young people about the high-paying jobs in the sector.

A large percentage of those surveyed said they believe collaboration and knowledge sharing among those involved in the industry would improve the situation. About 59 per cent said cross-sector task forces would help, with 46.8 per cent saying employee exchanges would help.

IN DEMAND

Project management, health, safety and environment, and offshore and onshore operations would benefit most from greater collaboration, with a range of 40.5 per cent on the case of onshore operations to almost 70 per cent in project management and engineering.

Coffman says it makes sense that industry executives see room for collaboration and knowledge sharing, but there’s a limit to how far that can go and in what job areas it is possible.

For instance, he notes that those with degrees in business administration or in accounting can shift from one sector to another and from one company to another within an industry, but that’s not as likely to happen in technical areas, such as the geosciences.

“It’s not easy to find those people and there are definitely challenges to getting them to collaborate and share information with those working for other companies,” he says. “Also, it’s not likely you’ll see geoscientists from different sectors collaborate. You don’t see mining engineers or geoscientists in the mining sector collaborating with those in the oil and gas industry and vice versa, for instance.”

Sub-sectors within the oil and gas industry are becoming so specialized it’s difficult to think of how information sharing could occur with others. A reservoir engineer who specializes in steam assisted gravity drainage technology isn’t likely to find someone in the mining sector with the same sets of knowledge.

Nevertheless, Coffman says there is definitely room for collaboration and knowledge sharing.

“For instance, an executive with BP could spend two weeks working for an oilfield service company or an executive with an E&P [exploration and production] company could spend some time with a pipeline company or a company involved in renewables.”

He adds that the “sense of optimism” that exists among managers in the oil and gas industry is palpable, which might be reflected in the 98.2 per cent of executives who would encourage young people to enter the business.

 

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