The article in the url below presents an interesting take on the issue of climate change from the perspective of the generation just now entering the workforce. In particular, it highlights the difficulties oil and gas firms face in hiring sufficient numbers of graduates and their concern that this will create a "generational gap" within their employee populations. This challenge has only been enhanced by the COVID-19 recession:
"The economic crisis caused by the pandemic, combined with a growing distaste for the oil business among potential young employees, is creating a new problem for the industry. Energy giants including Chevron Corp. and BP PLC are trying to avoid creating a generational gap in their staffs—a problem they've faced in previous downturns—that could make it more difficult to tackle industry-changing competition from renewable energy and electric vehicles."
Not only is the industry having to reinvent itself in order to adapt, but it is being forced to do so within a radically transformed competitive environment:
"America's oil-and-gas industry has cut about 105,000 positions, or roughly 20% of its jobs, from March 1 through the end of June, according to Accenture. At its low in April, global oil demand was down more than 20% from a year earlier, according to the International Energy Agency. Demand has been climbing since, but it isn't expected to surpass 2019 levels until 2023, said analytics firm IHS Markit. Even by the end of the decade demand is expected to be 3.5 million to 4 million barrels a day lower than previously forecast, IHS said."
Given the damage already done by fossil fuels to the environment, along with energy companies' historical reluctance to recognize their impact, the industry is facing a bit of an image problem among the prospective employees it now needs to attract:
"… the public, especially younger people, increasingly sees the industry in a negative light. A career in oil and gas was unappealing to 44% of 20- to 35-year-olds, according to a 2017 survey by Ernst & Young LLP. An even greater portion of 16- to 19-year-olds, nearly two-thirds, held that sentiment."
Moreover, the industry has hardly been exactly 'inclusive' at the best of times:
"[In 2019] 88% of people working in oil-and-gas extraction were white, and just 22% were women."
The result is that these companies face higher hiring costs and a reduced pool of talent from which to select, but at least they are aware of the challenges they face:
"This time, Chevron plans to maintain at least some university recruiting despite being in the process of cutting up to 15% of its workforce. The company also continued its internship program virtually. Half of the class are racial or ethnic minorities and 37% are women, a more diverse group than Chevron's workforce overall. … BP made its summer internship program virtual and honored full-time offers to some 300 recent graduates, even as it cuts nearly 10,000 jobs, or 14% of its global workforce."
One chart in the article demonstrates the dramatically cyclical nature of hiring in the industry. These cycles are correlated with the price of oil:
University departments are responding to the needs of the industry, although in a way that appears more reactive and pandering, rather than proactive and intellectually independent:
"Universities' petroleum-engineering departments are remaking curricula in light of demands for digitally savvy employees. LSU began requiring additional data-analytics course work last year, and it plans in the spring to introduce an elective about carbon capture and storage."
Ultimately, to those who support the industry, the core concern of energy companies is not so much finding enough people willing to work for them, but rather being able to generate enough open positions given the volatility in oil prices to hire all of the students looking for jobs. To some degree, while the headline driving the article is all about the values of the new generation of job seekers, the article concludes by noting that there will always be sufficient numbers of people willing to work for the higher salaries the industry provides, as long as the jobs are available to them. Or, perhaps that is what we might expect someone to say from a university department already fully committed to the industry:
"'There's a mentality out there that oil and gas is finished,' said Jeff Spath, who leads Texas A&M University's petroleum-engineering department, adding that there is 'a growing disdain' for the industry. Dr. Spath said he thinks a generation or two of students will still be able to build a full career in oil and gas, because fuels are widely expected to make up a large share of the global energy supply for decades. But the downturn is hitting Texas A&M's students hard. As of early August, only a third of the petroleum engineers who graduated this spring with a bachelor's degree had a job, Dr. Spath said. Some 70% of the class of 2019 had found a job by that time last year."
Take care
David
David Chandler
Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)
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Oil Firms Fret Over Finding Young Workers
By Rebecca Elliott
August 19, 2020
The Wall Street Journal
Late Edition – Final
B1, B4
https://www.wsj.com/articles/oil-industry-frets-about-recruiting-its-next-generation-of-workers-11597763882
