Canadian fossil fuel workers won’t be saved by Carney’s oil and gas boosterism

Workers in Canada’s oil and gas industry won’t be able to escape the sector’s coming collapse regardless of the fossil fuel boosterism from politicians in Ottawa and Alberta. 

That’s according to new research from the Centre for Future Work, which found that concerns about fossil fuel employment “have been weaponized by industry” to prevent or delay policies to reduce oil and gas production and use.

“For people who think a new deal with Alberta, a new oil pipeline and new upstream investment is going to solve the employment problem in Alberta, they haven't been paying attention,” said Jim Stanford, an economist and director of Centre for Future Work. “Oil production has increased by a third over the last decade, and oil employment has declined by close to 40,000 jobs.”

Prime Minister Mark Carney has referred two LNG export terminals and a new gas pipeline to his Major Projects Office and signed a memorandum of understanding (MOU) with Alberta Premier Danielle Smith that could see a new major oil pipeline built to the BC coast and the world’s largest carbon capture project built. Across all these initiatives, he has stressed the tens of billions of dollars’ worth of investment would lead to thousands of good-paying careers. 

“The MOU is built on practical solutions: stronger, more effective industrial carbon pricing, major private sector investments in clean technologies, and expanded, responsible energy development for the workers and communities who rely on it,” reads a statement from the Prime Minister’s Office announcing the deal with Alberta.

In a statement, the Alberta government claimed the MOU — which proposes to remove a series of environment and climate change policies while offering new incentives to oil and gas companies — would “create hundreds of thousands of new jobs.” The province’s statement did not offer evidence to back up the claim.

Given that production of both oil and gas has increased as jobs decreased over the past decade, Stanford says the decline can’t be fairly attributed to climate policies. 

Instead, tens of thousands of jobs have been lost due to companies finding ways to extract more fossil fuels with fewer workers using technological advances such as self-driving trucks in the oilsands, remote well testing and horizontal drilling. In the case of Imperial Oil’s recent mass layoffs, the jobs will simply move to the United States. 

“The idea that ‘if we pump more, we'll work more’ is wrong,” Stanford said, adding that the evidence is clear that an energy transition is happening both in Canada and in the world, and employment will continue to fall. “Don't think for a minute that a new pipeline is going to change that clear, downward, trajectory in fossil fuel employment. It won't.”

According to the most recent Statistics Canada data synthesized in the Centre for Future Work report, just under one per cent of Canadians are directly employed in oil and gas. The rate of decline over the past decade “coincidentally” aligns with net-zero by 2050, Stanford said. 

Employment figures, however, are regionally specific. In the country’s most fossil fuel dependent province, Alberta, more than five per cent are directly employed in oil and gas. In some places like Fort McMurray, that total leaps to about 30 per cent of the workforce. 

“The challenges created by a transition away from fossil fuels will be felt disproportionately, and this is why it should be a matter of national public interest, not left up to each region,” Stanford said. 

Out of 90 surveyed workers in the fossil fuel industry, a majority (nearly 60 per cent) understand burning fossil fuels drives climate change and so must be phased out — however, 27 per cent do not believe climate change is related to human activity at all, and fossil fuel production and consumption can continue indefinitely, according to the research.

Despite the majority understanding that burning fossil fuels must decline to avoid climate breakdown, nearly 60 per cent said they will still be working in oil and gas in five years, compared to 20 per cent who expect to change industries. 

“While most fossil fuel workers realize their industry will shrink in the future as a result of climate actions, few expect this to cause imminent changes in their own employment circumstances,” the research found. “This seeming contradiction perhaps reflects uncertainty about when climate policies will actually begin to impact fossil fuel production. 

“This uncertainty is understandable in light of the continuing expansion of Canadian fossil fuels… and the widening gap between Canada’s stated climate commitments and the disappointing pace of actual emissions reduction progress.”

The report argues that given the energy transition is occurring, the choice at hand for policy makers is not whether to pursue it, it’s whether to plan for it.

“At present, it is occurring in an unplanned, unsupported and chaotic way, with key disemployment decisions made unilaterally by fossil fuel employers in the interests of maximizing their own profits,” the report reads.

“Pretending that the employment transition can be stopped does not ‘protect’ fossil fuel workers; it simply exposes them to more of the unsupported dislocation they have already experienced over the past decade.”

Interviews with fossil fuel union members quoted anonymously in the report suggests that how a transition is talked about matters. The term “just transition” was coined by trade unionists, but has taken on new meaning with many workers in the fossil fuel sector understanding it as a code word for losing their jobs, according to the findings.

“The older workers say, don’t worry about me, I'll be fine, I'm going to retire, you look after the young guys. The young guys say, don't worry about me, I'll be fine, I'll be able to transfer my skills, look after the old guys,” said one interviewee. “Very Canadian story of caring for each other.”

Stanford said a common misconception is that transitioning fossil fuel workers will require mass-retraining for other sectors like renewables. That may be part of the solution, but it is more likely to be a small fraction of it, he said. Most of the transition over the next 25 years will be fossil fuel workers retiring.

The findings suggest the task at hand is utterly doable and the challenge is much smaller than many people believe, Stanford argues. But it nonetheless will require serious policy from the government. 

According to those interviewed for the report, two strategies with consistently strong support include training for younger workers and pension and benefit bridging for older workers. 

Survey data indicates fossil fuel workers expect federal and provincial governments and fossil fuel companies to support them through the transition. 

By the end of this year, the federal government is scheduled to publish a sustainable jobs action plan, but the government could not confirm it was on track. 

When asked if sustainable jobs were a priority for the government, Natural Resources Minister Tim Hodgson’s office did not respond by deadline. 

Beyond jobs, the risks to government coffers from the global energy transition are immense, the UK-based think tank Carbon Tracker found. Canadian oil and gas production growth is a high-risk, low reward strategy that puts companies and their investors at more risk than peers globally.

Alberta’s revenues from oil and gas would fall from $153 billion to $23 billion — a staggering 85 per cent drop — if governments can limit global warming to 2 degrees Celsius.