Automation Reveals Trouble for Workers in Oil & Gas

Jobs in oil & gas sink while energy industry grows

“Iron Roughnecks” eliminates workers in the oil industry 

Iron Roughneck taking jobs photo from NOV

A recent trend in the oil & gas industry offers an interesting example of the impact robots and automation can have on an industry and its workforce.

The argument in favor of automation and robots goes like this 'yes new technology eliminates jobs, but the disruption will be temporary and the changes will actually create new jobs as a result.'

But a chart examining production and employment trends in the oil & gas industry may bury this argument - or at least put a little dirt on it. The graph shows that within a two year period, the oil & gas industry plummeted and then rebounded.

Not so unusual for such a volatile industry. What is concerning, however, is that while production and employment both nose-dived after the industry experienced hard times when things improved, the number of rigs increased but employment didn't. Graph below.

The reason for this was the appearance of Iron Roughnecks to do the work previously carried out by rig workers. Robots and automation are increasing production of oil & gas, lowering costs for energy companies. Looking at these developments, it doesn't seem unlikely what we are witnessing is a model that could play out in other industries.

While it remains to be seen how automation displacement translates into new jobs for oil and gas workers, obvious impressions are first, displacement from robots can come rapidly, and second, the appearance of new jobs don't.

In the past, a typical rig required 20 or so workers to meet production, Now a rig only needs around 5 people and those rigs, with the help of robots, can be more productive. With 220,000 jobs gone in the oil & gas industry, where will the displaced find new work? From Futurism