Energy Voice article – The Human Cost of Covid and Commodity Price Crash
When lockdown started, did any of us think we would still be in the grip of the pandemic over 130 days later? How many of us understood the immense cost that would be exacted by the virus in so many ways – not being able to see family and friends, illness, bereavement, postponing major life events- without starting on the cost to businesses and the economy?
These are challenging times for all industries, and we are seeing the impact of this on people’s jobs and livelihoods nearly every day in the news.
As the pandemic gripped the world, the oil and gas industry was already steeling itself amidst falling prices at a time when it was only just beginning to recover from one of the most prolonged downturns in its history. Coming at a time when industry is focused on Roadmap 2035 and positioning itself as a key partner to deliver emissions reduction solutions, the term ‘perfect storm’ is an understatement. But what of the human cost?
Thousands have found themselves on furlough, a scheme welcomed throughout the country but not without its challenges for all industries. There were still employment costs to be met, so open ended furlough was not sustainable for many companies. We have already seen the tragedy of thousands of redundancies; an earlier OGUK report estimates as many as 30,000 direct and indirect jobs could be lost by the end of 2021. Platforms have seen reduced manning levels, drilling activity has stopped and shows no sign of recovery until well into 2021 at the earliest, more likely beyond. Not only are people losing jobs, possibly for the second time in four or five years, they are doing so at a time when the economy is in meltdown and thousands of people are chasing every vacancy. I’m sure we all know someone personally affected.
This is not just a financial body blow, the toll on the mental health of those impacted is likely to be high. I include industry leaders in that; it is not easy to make critical business decisions knowing they will lead to unemployment for hundreds of your colleagues, or to watch your business disintegrate before your eyes, as one leader described it.
For those fortunate to remain in work, there are additional pressures and sources of anxiety. Offshore workers and vessel crews worry about getting to and from points of mobilisation, the risk of infection at work, the risk of infection for their families, the impact of illness and bereavement. For those working at home, there is the additional challenge of juggling work and caring responsibilities, home schooling and concerns regarding maintaining productivity in such an environment. Add to that the subtle inference that you should have decluttered, redecorated, read everything on your bookshelf and become a master baker and it is not surprising that many feel they are drowning psychologically.
In an effort to try and support those who have lost jobs, OGUK will later this month host a webinar in partnership with Skills Development Scotland to signpost people to jobs available in other energy sectors e.g. nuclear, where there are opportunities, and highlight support available from government agencies.
At the same time, there’s a role for governments and our regulators too through helping to stimulate plugging and abandonment activity in the near term, and unlocking funds to allow people to keep their certs up to date during these challenging times.
Ours is a remarkably resilient industry with remarkably resilient people. Though we are conscious that we will need their skills in the future as the sector recovers and embraces its role in the energy transition, we also recognise the human cost of the last four months and the need to try and help those who have applied their considerable skills on the industry’s behalf. Understanding how we as an oil and gas industry can pull together and find ways to support our friends and colleagues will be critical during these challenging times.
Dr Alix Thom is OGUK’s Workforce Engagement and Skills Manager