Employment in the energy sector
Part 2 of a 5-part series on trends in Alberta’s job market
By Todd Hirsch, ATB Economics 22 June 2021 1 min read
In the first part of this series on Alberta’s labour market, we saw the difference between the recession of 2015-16 and the recession of 2020. In this segment we look at job trends in the energy sector.*
As the chart below shows, the drop in energy sector employment started before the decline in the total number of jobs. Employment in oil and gas started to fall as soon as oil prices began their descent from the heights reached in mid-2014. The number of energy sector jobs dropped by a whopping 30% between July 2014 and July 2016.
After recovering about half of its losses in the following two years, employment in the energy sector dropped again after the summer of 2018. But this time oil prices were not the main cause. The employment losses in 2018 and 2019 were largely driven by companies improving their efficiencies through consolidation, automation and other cost reductions.
Energy sector employment in Alberta was able to recover from the global pandemic relatively quickly, but remains far below 2014 levels. Efficiency gains and cost containment brought on by the price collapse that precipitated the recession of 2015-16 are the reasons. Policies aimed at reducing carbon emissions and expectations regarding further restrictions in the future are also contributing to lower employment levels.
In Part 3 in the series, we will look at job trends outside the energy sector.
*The “energy sector” in Alberta includes jobs in forestry and mining, but most of the jobs are in oil and gas extraction.
This series on Alberta’s labour market is drawn from “The State of Alberta’s Economy and the Path Forward” by ATB Financial Chief Economist Todd Hirsch and published in May 2021 by the School of Public Policy at the University of Calgary. Please note that some of the data in the original paper have been updated.
Answer to the previous trivia question: The summer solstice occurs in June in the Northern Hemisphere and in December in the Southern Hemisphere.
Today’s trivia question: What does “petroleum” mean in Latin?