Calgary professionals evolve to meet emerging industry needs
Global mergers, green ideals and high technology inspire a white-collar step change
Illustration by Ben Frey
When the beginnings of an oil and gas industry first bubbled up in the 1850s in northwestern Pennsylvania, about the only qualifications an oil and gas “professional” really needed was a degree in spunk or a PhD in pickaxe. Still, as Daniel Yergin notes in his 1991 Pulitzer-winning history of the oil industry, The Prize, even then, George Bissell, a New York lawyer who founded Venango Co. – the company that began the hydrocarbon age – used an outside consultant. He was a chemist hired to analyze the “rock oil” seeping out of springs and wells at a place called Oil Creek.
Bissell speculated that rock oil would be a better, cheaper – and for him a lucrative – competitor to coal oil, which was back then burnt as an illuminant in lamps. Hoping to raise investment money, he had his chemist, Benjamin Silliman Jr., test rock oil for flammability and its possibilities as a lubricant. Until then, the mysterious black goo had only been used as a medicine, a snake oil reputed to cure toothaches, worms, rheumatism and other ailments.
During the early Victorian age of oil, black gold was simply scraped off the ground with primitive skimmers or soaked up with rags. But Silliman’s report on oil’s potential was “a turning point in the establishment of the petroleum business,” wrote historian Paul Gibbons in the 1940s. As oil rapidly became industrialized, the jobs and professions that sprang up alongside it would evolve swiftly as well. Though Bissell was regarded as a prescient petroleum thinker for his time, he would not recognize the plethora of professions and professional consulting services that grease the wheels of the oil and gas industry today. With the industry on the cusp of sea changes in how it does business, a host of new careers and professional services will be coming on stream in the next five to 20 years.
Three major drivers – the environmental push and its attendant regulatory frameworks, technological innovations and the culture clash of global mergers – are among the factors mutating the professional forces in oil and gas. They are shifting emphasis on job availability or creating completely new career titles, such as carbon auditors, something barely heard of just a few years ago. “I guess what we are seeing here is an evolution of competencies and skill sets required from any kind of resource extraction,” says Grant Trump, founder and president of ECO Canada. Standing for Environmental Careers Organization, ECO is an industry-led organization partly funded by the federal government that is involved in environmental career development assisting both employees and industry.
With new regulatory frameworks and, adds Trump, “public opinion demanding that companies take a more careful look at environmental considerations,” new kinds of jobs – testing, measuring and improving air, water and land quality in petroleum-related projects – are expanding. “You know, looking after past sins is one activity. But so is looking forward and making sure companies are in environmental compliance.”
These new professions have titles such as environmental co-ordinator, environmental manager or environmental specialist. There will be a burgeoning demand for professional gas verifiers and quantifiers, foresees Trump, “because are we going to move to some sort of cap-and-trade system that measures [greenhouse gases] and rewards companies that reduce them? I believe we are.”
And while reclamation and remediation specialists aren’t exactly new fields, they are positions gaining prominence as consulting firms try to offer their oil and gas clients a wider slew of environmental expertise. These new jobs, says Trump, “tend to be what we refer to as discipline plus. So they generally involve a scientific or engineering discipline. They are engineers, chemists, biologists, and then they have gone on to obtain additional environmental competencies that add to that discipline.”
With a PhD in environmental science and degrees in mechanical engineering and fluid mechanics, Christine Schuh is certainly stocked up on disciplines. She is, as a carbon auditor, a pioneer in the emerging field of greenhouse gas verification. Schuh joined PricewaterhouseCoopers Calgary in 2000 and is now associate partner with its climate change group. You could call her a “stack counter” instead of a bean counter. When assigned to analyze the GHGs emitted by oil and gas operations, “I do actually count the number of smokestacks in the air,” she says. “That’s before I have even crossed the gate.”
One part of her job is to identify all sources of emissions (as well as sinks) on a site, from the obvious smokestacks at a refinery to leaks in pipes. Next, Schuh has to determine the appropriate methodology to measure each source and sink of emissions. “Once you figure that out, you can figure out how a company collects its data, measures it, monitors it and calculates it.” Then, in addition to her scientific expertise, her accounting skills kick in as Schuh develops an audit trail from measurement to reporting. With a typical gas plant, a carbon audit can take four to six weeks, not including the analytical work needed before going to the site. Her job is often carried out with a team of three to seven people with varying disciplines.
“Here’s the wonderful thing about climate change,” says Schuh, clearly ebullient about the prospects for emerging careers in her field. “It takes all sorts of disciplines to make things work. It’s not just engineers, not just chemists. It is a wide variety of people. You need people who know government policy and how to design it. You need lawyers who understand the regulations to develop the regulations. You need engineers to understand how industry and equipment works.”
As oil and gas companies accept the science of climate change – something far more common north of the border than south – it will heat up the demand for a range of new professional services needed to give companies the greenhouse gas data necessary to operate in a carbon-constrained world. People like Schuh, not to mention others in new disciplines such as environmental communications, will also be needed as more publicly held companies produce corporate social responsibility reports detailing their efforts to work more conscientiously in communities and towards the environment. But for those reports to carry any weight with stakeholders they will need credible professional services to verify – in the same way accountants now count revenues and expenditures – the pollutants, gases and other environmental impacts companies produce.
To that end, Schuh taught a course last June for the first time on greenhouse gas emissions, risk reporting and assurance to members of the Canadian Institute of Chartered Accountants. “To get to this point where the professional associations are interested in teaching their membership about this tells me that this is an issue that’s not going to go away and will need to be addressed long term.”
At Ernst & Young, senior manager Lance Mortlock sees corporate global expansions, not just global warming, spawning other new professional consultant offerings, among them diversity management professional services. Though a recent $5.4-billion joint venture between Calgary-based Encana Corp. and PetroChina collapsed in June, in Canada there’s been a significant uptick in joint projects or corporate mergers between operators from widely divergent corporate and social cultures. “Professional services firms are certainly evolving and expanding their offerings as companies in Calgary are becoming more global. We see a lot of foreign nationals coming in,” says Mortlock, citing the spring announcement of Malaysia’s national oil company, Petronas, entering into a $1-billion venture with Calgary’s Progress Energy Resources Corp.
Progress Energy sold a 50 per cent interest in three of its Montney unconventional gas plays to Petronas. The two partners plan to build a liquefied natural gas (LNG) export facility on British Columbia’s coast to ship the chilled fossil fuel to new markets. Says Mortlock, who leads Ernst & Young’s Calgary oil and gas center: “It’s a great example of two quite different cultures and companies coming together and doing business together. That creates a lot of complexity and that’s where some of these emerging roles and emerging services are coming from. There is a potential for some culture clashes in that.” And thus potential for a new breed of human resources professional – diversity managers – skilled at bridging cultural and ideological gaps to iron out what can be very big wrinkles.
“I’ve been involved personally, and colleagues of mine have been involved, on other deals where we have seen some of those differences in how business is done,” Mortlock says. It can be as simple as meetings being held in a language some post-merger employees don’t understand. “Some of the national oil companies, because they are government-owned, tend to be more process, procedure, very reporting driven. Whereas a lot of the mid-sized companies in the Calgary market are very action-focused, very adaptive, very flexible, not a lot of bureaucracy, not a lot of process and procedure.”
In 2009, Asian investment in Alberta’s oil sands was virtually nil. In 2010, it was US$9.2 billion. With the growth in international mergers, Ernst & Young is finding itself called in to do cultural assessments and help manage communications between the newly married corporations. It often takes a team approach, with people skilled in the required languages along with specialized knowledge of Asian or other cultures. Human resource professionals have been dealing with diversity issues for a long time, “but on a different level,” Mortlock says. “This adds a slightly different and slightly more complex dimension to that.”
To make the most of these culturally spiced mergers, foreign and Canadian companies need careful integration planning. This is creating novel C-suite roles – demanding new skills – with titles such as vice-president of corporate transformation, director of corporate efficiency, or vice-president of business improvement. “As things become more global, you have to think more about how you manage your business,” Mortlock says. “Are you centralized, or decentralized? If you have interest in Houston and Calgary, do you have one management team, or two? Some of the corporate functions like supply services, human resources and information technology, do they get delivered and provided as a service out of the center? There are definitely new types of things we are getting involved in as a result of these deals.”
The oil and gas industry has, since not long after the days when rock oil was slurped up with rags, nurtured the development of new technologies to increase productivity and profits. And new technologies nurture new professional services. For instance, says Les Little, executive director of Alberta Innovates, “There has been a push to look for alternative type energy services – or sources of renewables to assist your non-renewable hydrocarbon-based resource recovery process.”
It will take people with strong science backgrounds to develop and integrate such new technologies, be it geothermal, solar or even biofeed stocks. One innovative in situ recovery process for the oil sands currently being piloted could spark a sizable increase in the use of electrical engineers in the sector.
Companies like Calgary-based E-T Energy and Siemens are testing variations of electrical-based recovery processes that involve inserting grids of electrical probes into bitumen deposits too deep to mine and too shallow for steam-assisted gravity drainage (SAGD) recovery techniques. Adapting technologies previously used to remediate contaminated well sites, electrical currents are sent through the probes, heating up swaths of bitumen that can then be pumped to the surface. The process promises to use less energy and far less water than SAGD to recover bitumen. “There’s a new skill set that is going to be required here to deal with the safe generation and delivery of electricity at site,” predicts Little. That could mean more specialized electrical engineers in the sector. And with more so-called “smart wells” being operated remotely, there is a greater need for software engineers to design integrated real-time data systems.
And there will be big opportunities in the nano sciences, as oil and gas companies turn to the molecular world for things such as better, longer-lasting pipeline coatings to combat the ever-present problem of corrosion. In 2007, the Alberta government invested $130 million in nanotechnology education infrastructure, predicting that the investment in the emerging field could return $20 billion in economic activity to the province. The money made room for 600 nanotech graduate students.
Little says there are projects underway to perfect products such as nano-filtration systems, nano-catalysts for use in refineries and nano-absorbents for use in reclamation and remediation projects. “The nano area can actually affect everything that we do,” Little says. “There could be a new skill set here looking at developing the next range of technologies that can effectively adapt these discoveries and apply them in industrial processes.”
But filling these emerging fields with qualified bodies could be a major challenge. As the oil and gas sector recovers amidst increased prices for oil, already there are labor shortages in core professions and trades and in the services sector. Petroleum Human Resources Council of Canada (PHRC) statistics show that in 2009 the oil sands sector alone employed approximately 12,300 workers. And in every growth scenario forecast by the PHRC, the oil sands’ workforce is expected to grow in size. “Between 2010 and 2020,” the council says in its report, The Decade Ahead: Labour Market Projections & Analysis for Canada’s Oil and Gas Industry, “the sector will need to hire for at least 9,000 positions and possibly up to 14,900 positions due to a combination of expansion and replacement demand.”
Finding employees with both the educational backgrounds and industry experience to fill emerging new professional services won’t be easy, says ECO Canada’s Trump, even as almost every post-secondary institute in Canada has developed environmental programming to train students in the new green professions. “This is a major issue. We are finding in the industry right now there is a tremendous churn, people moving from one company to another, particularly in the consulting business.” Trump says the average stay in any job in the oil and gas industry is only 2.2 years.
And for many of the new eco services such as environmental engineers, reclamation and remediation specialists and carbon auditors, the public sector has become a stiff competitor for employees. That’s a shift from just five years ago when the private sector, waving fistfuls of cash, could easily out-bid government for the best talent. “When you talk about a regulatory environment, that means the regulators themselves have to have people of equal competence to the people in the private sector that they are regulating,” Trump says. Government employers are now making salary adjustments to attract these people, as well as offering superior pension benefits and a better work/life balance.
Over at Suncor Energy Inc., spokesperson Dany Laferriere says the oil sands giant is committed to a sustainable journey, “so you’ll see us continue to hire people who can help us on this journey and to achieve our environmental targets. This includes everything from project managers who are land and forest reclamation specialists to research engineers and environmental project engineers.”
“But,” adds Laferriere, “it’s not so much the specific role or qualifications that’s the emerging trend; it’s the attitude and holistic thinking professionals can bring to the table.”
More posts by Anthony A. Davis
- Taking Flight: Poland tries to revive its shale gas hopes as Russia tightens its grip
- Separating fact from fiction in the claim that oil and gas companies are over-subsidized
- New trading platforms connect junior players with high net worth Canadians
- Private equity quietly raises its profile in the oil patch
- AIMCo’s $380-million bet on Precision Drilling pays off