Industry experts have some news for the president: Because of automation, a lot of the jobs lost in oil drilling aren’t coming back. And more are going to be lost.
“To me, it’s not just about automating the rig,” Ahmed Hashmi, BP’s head of upstream technology, told Bloomberg recently. “It’s about automating everything upstream of the rig.” The story also noted that “automation means wells need only five workers, down from 20.”
Donald Trump won the election with promises of creating a massive number of jobs and cracking down on industries that outsource or kill jobs. But because he isn’t discussing the real reasons we’re losing jobs — and because he’s betting on the dirty fuels of the past — he is missing the window to create millions of new jobs in clean energy.
Trump claims EPA standards for clean air and water are what has killed jobs in the fossil fuel industry and hurt the economy. The reverse is actually true. As studies have shown, EPA regulations create jobs and spur innovation.
The Office of Management and Budget reported to Congress last year that EPA’s air regulations cost the economy $41 to $48 billion (in 2014$) while providing benefits worth $172 to $668 billion.
Last week, Trump signed a law that killed a transparency requirement of the Dodd-Frank financial reforms for oil and gas companies to disclose payments to foreign governments, including taxes. Trump says this deregulation push means “bringing back jobs big-league.” He asserted, “we’re bringing them back at the mine level. The energy jobs are coming back.”
But that isn’t true. Coal wasn’t killed by regulations, as many experts have explained. Cheap renewables and fracked gas were the main culprits. And the overwhelming majority of coal jobs were lost through advanced machinery, productivity gains, and automation.
And many more mining jobs can be automated. A 2016 study found “automation is likely to replace 40–80 percent of workers in a mine, with newer mines and those with many years of life left most susceptible to automation,” as Brookings reported last month.
The oil industry is in the same exact position. The New York Times reported Sunday that some “163,000 oil jobs were lost nationally from the 2014 peak, or about 30 percent of the total.”
But, the story warns, “energy experts say that between a third and a half of the workers who lost their jobs are not returning.” A VP for strategic development at one Pennsylvania drill-rig maker explained why so many jobs won’t come back: “If it’s a repetitive task, it can be automated,” so a computer can replace a worker.
The result is that while U.S. oil production is down less than 10 percent from 2014 levels, the Times notes there are only “a bit more than one-third as many rigs operating as in 2014.” One Texas producer is now so efficient, “the company added nearly 240 wells … without adding new employees.”
The future is especially bleak for oil jobs because of the battery and electric vehicle (EV) revolution, which led Bloomberg New Energy Finance analysts to warn investors to expect the ‘big crash’ in oil by as early as 2023.
If Trump truly wanted to create jobs, he’d have to make large investments in — and embrace policies that support — fast-growing industries like EVs, energy efficiency, and renewable energy. But the president and his Big Oil backers prefer to let the Chinese do that because, you know, they invented all that climate change stuff.