Both seasoned pros and promising young executives are needed to guide the natural gas industry in the energy transition.
Who should guide natural gas through the energy transition and into its rightful position as a critical part of the global supply equation? Will gray hair and a respectable tenure define the best choices for this task, or should the industry turn to ambitious millennials fresh out of college?
In fact, neither generation alone is necessarily the best equipped for the challenge.
This revolution in the industry will need the best and the brightest of any generation who can fully embrace technology and bend its potential to the challenges ahead, workforce experts say.
“I’m a big believer in an old school/new school practical approach.” – Emily Easley, NOVUS Energy Advisors
She said that more experienced professional know how much time is required to train, think through a strategy and have a realistic perspective. “But, I also think that the world has started to move at such a rapid pace with technology that even I find myself overwhelmed,” she added.
Neither demographic has a lock on vision. Seasoned professionals may find that keeping up with the scale of information and its lightning-fast pace of technology deployment takes a team of reliable sources, Easley said. Similarly, young entrepreneurs can benefit from credible colleagues who understand what is at stake when time, cost and risk intersect.
A diverse group is nimble and has some experience to manage within a landscape that is changing as quickly as the global energy equation, she said.
“When things get too big, too fast there are always unintended consequences,” Easley said. “You have to look beyond [the short term] and ask, ‘What are the unintended consequences, and how can I ensure that I’ve got that more seasoned perspective to help de-risk [an enterprise]?’”
All hands on deck for an all-of-the-above strategy
Perhaps equally important for energy leaders to emphasize is that natural gas can be part of a smart, clean energy transition, Easley and others said.
Instead of pushing natural gas aside in favor of intermittent renewable supply, the technology already exists to deploy natural gas as failsafe for electrical grid management until new resources such as wind and solar become more reliable. Well-managed utilities can distribute the power generated from both renewable resources and natural gas.
“It’s an important component because now we have these technology solutions that also allow us to have generation within the distribution lines, which is a major shift in how our grids have run since the 1900s,” Easley said.
Moreover, the industry must emphatically remind consumers that natural gas is not merely a transition fuel, said Leslie Beyer, CEO of the Energy Workforce and Technology Council in Houston.
Hydrocarbons will continue to be a “valued part of the energy mix” in the current market and in the future, she said, adding that producers are already scrambling to employ the latest in technologies and methods to reduce the industry’s carbon footprint.
“Companies that were formerly exclusive to oil and gas are finding new supply chain outlets for their products and services in wind, solar, hydrogen, geothermal and other markets,” Beyer said.
Navigating workforce changes
Whether it’s called a silver tsunami, gray wave or the Great Crew Change, the metaphor remains the same: retirement is looming for a sizable chunk of the U.S. energy workforce between now and 2040.
The phenomenon will have a substantial demographic impact on the country and is expected to slow growth in the labor force, Beyer said.
The business of producing, transporting and processing hydrocarbons is a cyclical one, and the energy industry’s peaks and valleys represent a dynamic that most seasoned veterans have warily grown to expect.
But the workforce’s vulnerability to commodity prices reached new depths when the 2014 downturn lingered well into 2019. A Deloitte analysis in 2020 of oil and gas workforce trends found that as much of 70% of the jobs lost in 2020—when the pandemic devastated demand and tightened supply—were unlikely to return in 2021. This protraction of the workforce’s sensitivity to market volatility suggests this cyclicality is not “business as usual,” researchers said. Indeed, it could be the start of something that benefits the industry, the workforce and the environment.
“Today’s changed environment has given [oil, gas and chemicals] organizations the much-needed ‘Why not?’ to transform themselves and find new ways to reclaim their earlier appeal,” Deloitte said in the white paper, The Future of Work in Oil, Gas and Chemicals: Opportunity in a Time of Change.
Applying four levers for transformation—energy transition, integrated human-machine collaboration, recoded careers and organizational agility—could push the industry to prepare well for the future.
Meanwhile, a wide swath of generalist investors have fled the fossil fuel space, Deloitte noted. That has resulted in a dwindling return on invested capital in the hydrocarbons space largely on par with many renewable companies.
“Put simply, the green energy business is now at a level playing field with the traditional [oil, gas and chemicals] model,” according to the report. That opens almost limitless potential for these firms to transform their traditional fossil fuel-modeled businesses.
Coupled with the digitalization that has already transformed much of the work performed within the extraction business, adopting an “all of the above” resources strategy may also open new lines of work, Deloitte said.
But finding the right balance between new workers and seasoned pros has perhaps never been as important as it is under the current circumstances.
“Renewing the focus on the workforce lies at the very center of the talent puzzle, and the time has perhaps come to revisit the traditional talent lifecycle,” Deloitte said.
Challenge or chance?
The industry’s bootstrapping habit of pulling itself out of a crisis is evident in an examination of advances made in 2020-2021. More efficient operations and capital deployment demonstrate that operators still know how to innovate, “so it’s not surprising that many believe the biggest opportunities come from advances in engineering techniques and technologies, or digitally enabled skills and competencies,” said Josh Young, director at Energy Jobline.
Members of the Energy Workforce coalition are indeed the “tech companies” of the energy sector, Beyer said.
“They’ve thrived throughout the years by creating and deploying at global scale innovations in material science, engineering, programming, data, artificial intelligence, robotics and automation,” she said. “They are already implementing or developing the technologies we need to help achieve society’s goals.”
Young and his team worked with Airswift this year to produce the Global Energy Talent Index (GETI), which found that in 2021, many believe there is opportunity to be found amid the uncertainty. Respondents to the annual survey reported that the transition to cleaner energy is a challenge to 33% of them; however, 44% viewed it as an opportunity.
“This shows us a sector that is ready to turn its concerns into something more productive,” Young said. “In a deep crisis, like pre-vaccine COVID-19, the largest concerns can be flipped into major opportunities if managed correctly.”
As such, workforce diversity will be critical, Beyer said.
“More job seekers are making diversity an important element in their job search, and multiple surveys show that people are reluctant to join organizations that are not known for encouraging diversity,” she said. “Our sector recognizes the need to grow in this area and are focused on creating more inclusive cultures that will not only attract but retain talent.”
Indeed, 57% of those responding to the GETI questions said they are confident in their employers’ resilience to the challenges ahead.
Additionally, the workforce is becoming more and more diverse. Women account for almost 20% of the workforce, and ethnic minorities account for 27%, Beyer noted.
“The sector needs to continue to focus on recruitment, retention and advancement opportunities for women and minorities. By developing pipelines of diverse talent, we can find the brightest and sharpest minds that will help us reinvent the industry for a low-carbon future,” she said.
CollegeChoice.net reported in July that another 5,000 petroleum engineers will be needed between 2016 and 2026—a growth forecast that greatly outstrips the national average.
But the GETI survey found that overwhelmingly majority of respondents (79%) who work in the oil and gas field would consider switching to another sector during the next three years. The most popular destination was in renewables.
Indeed, within the renewables space, no less than 72% of respondents across all age groups from 18 to 65-plus would pursue the same career.
Airswift CEO Janette Marx said that the biggest threat is a talent crisis and that no sector is immune. But the uncertainty is not limited to natural gas and other fossil fuel producers, and the industry is attempting to turn around the fears.
“The sector needs to show its commitment to innovation, its commitment to people and its support for environmental measures—and ensure that investors, employees, candidates and prospects all hear the message,” she said.
- Both seasoned pros and promising young executives are needed to guide the natural gas industry in the energy transition.
- Today’s changed environment gives energy companies the opportunity to take a “why not?” approach and examine ways to transform themselves.
- The energy workforce has become increasingly diverse, an advantage as the industry faces a wave of retirements.
See original article published on Hart Energy here.