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Survey of oil and gas workers shows little knowledge of energy transition

By Elizabeth Perry - Work and Climate Change Report, January 20, 2021

A report commissioned by international union coalition Industriall examines the geopolitics of fossil fuel producing countries (mainly, the United States, China, Europe and Russia) and the investments and performance of the Oil Majors (Chevron, ExxonMobil, Shell, BP, Total, as well as nationally-owned PetroChina, Gazprom and Equinor). Energy transition, national strategies, and oil companies: what are the impacts for workers? was published in November 2020, with the research updated to reflect the impacts of Covid-19. 

In addition to a thorough examination of state and corporate actions, the report asked union representatives from four oil companies about how workers understand the energy transformation and its impact on their own jobs, and whether the concept of Just Transition has become part of their union’s agenda.

Some highlights of the responses:

  • “the union members interviewed showed little knowledge about either the risks that the current transition process can generate for the industrial employee, or about the union discussion that seeks to equate the concern with the decarbonisation of the economy with the notions of equity and social justice. In some cases, even the term “Just Transition” was not known to respondents.”
  • Their lack of knowledge regarding the Just Transition can be justified by the fact that they do not believe that there will be any significant change in the energy mix of these companies.
  • Regarding information about energy transitions within the companies, “Managers are included, but the bottom of the work chain is not”
  • Lacking corporate policies or support, some employees feel compelled to take responsibility for their own re-training

Echoing results of a similar survey of North Sea oil workers in the summer of 2020, published in Offshore: Oil and gas workers’ views on industry conditions and the energy transition, one European respondent is quoted saying: “In the end, everyone is looking for job security, good wages and healthy conditions. It doesn’t matter so much if the job is in another area, as long as it is in good working conditions”.

The researchers conclude that: “Far from being just a statement of how disconnected workers are from environmental issues, these researches reveal a window of opportunity for union movements to act in a better communication strategy with their union members, drawing their attention to the climate issue and transforming their hopes for job stability and better working conditions into an ecologically sustainable political agenda.”

The report was commissioned by Industriall and conducted by the Institute of Strategic Studies of Petroleum, Natural Gas and Biofuels (Ineep), a research organization created by Brazil’s United Federation of Oil and Gas Workers (FUP).

Principles and best practices for a Just Transition for Canada’s fossil fuel workers

By Elizabeth Perry - Work and Climate Change Report, January 19, 2021

Economist Jim Stanford has written a timely new report which should be required reading for politicians setting their hair on fire about Joe Biden’s stated intention to cancel the Keystone XL pipeline project on Day one of his presidency. Employment Transitions and the Phase-Out of Fossil Fuels, released on January 18, argues that “the actual number of fossil fuel jobs and the number of communities reliant on the industry is small enough that a just and equitable transition plan for workers is very feasible” – and the key is timing.

Stanford’s report begins by setting out the statistics regarding fossil fuel employment in Canada: “under 1% of total payroll employment in Canada (or about 160,000 jobs) is located in seven industrial sectors which together comprise most of the composite fossil fuel industry. “ Using 2016 Census data, the report discusses the distribution of fossil fuel jobs by province and community, showing that Alberta accounts for 75% of fossil-related jobs in 2016, but even there, only it accounts for 7% of all provincial employment. 18 fossil fuel-dependent communities are named, where fossil fuel jobs account for 9.5% of employment – including two well-known examples, Wood Buffalo/Fort McMurray in Alberta and Estevan in Saskatchewan. The report continues to compare employment in the fossil fuel industry and in the health care sector, Canada’s largest employer. The aim is not to diminish the importance of fossil fuel employment, but to illustrate that employment possibilities exist in other sectors, even within fossil fuel-reliant communities.

Stanford looks ahead and states: “given weakening global demand for fossil fuels, depressed prices, continued infrastructure constraints, and aggressive cost-cutting by fossil fuel employers (shedding labour to protect profits despite lower energy prices), fossil fuel industries will see continued downsizing of their employment footprint.” He summarizes the employment transitions of other sectors in Canada’s history, notably fisheries, auto manufacturing, manufacturing – as well as other sectors currently transitioning, including retail, transportation, and newspapers and media, and documents the overall dynamics which are always churning labour markets. All these arguments build to the report’s final section, which is to outline the principles and best practices for planning effective employment and community transitions for the inevitable decline of fossil fuels. 

Offshore: Oil and gas workers’ views on industry conditions and the energy transition

By Gabrielle Jeliazkov, Platform, Ryan Morrison, and Mel Evans - Platform, Friends of the Earth Scotland (FoES), Greenpeace, September 29, 2020

‘Offshore’ reveals the results of a survey of 1,383 oil and gas workers in the UK Continental Shelf. Amidst Covid-19, oil market volatility and a looming energy transition, the results and eight case studies demonstrate the dissatisfaction with precarity of work, an appetite to move into alternative industries and the policy proposals to make it happen.

Key survey results include:

  • 43% have been furloughed or made redundant since March
  • 91% of respondents had never heard of the term ‘just transition’
  • 81% would consider leaving the oil and gas industry to work in another sector
  • Given the option of retraining to work elsewhere in the energy sector, more than half would be interested in renewables and offshore wind

Based on the findings of the survey, the authors make recommendations to improve working conditions in the oil and gas sector, address barriers to entry and conditions within the renewables industry and ensure workers are able to help determine policy for the energy transition,

A well-managed energy transformation can meet UK climate commitments while protecting livelihoods and economic wellbeing – provided that the right environmental and social policies are adopted and that the affected workers, trade unions and communities are able to guide policies.

Energy systems help to shape our economic and political structures. As we inevitably change our energy system in the face of climate change, our economic and politics system must change too. An energy future grounded in democracy can create the potential for more just outcomes across society.

Read the text (PDF).

North Sea workers ready to switch to renewables, survey shows

By Gabriel Levy - People and Nature, September 29, 2020

Most UK oil workers would consider switching to another industry – and, if given the option to retrain, more than half would choose to work on renewable energy, a survey published today shows.

The survey blasts a hole in the argument by trade union leaders that every last drop of oil must be produced, supposedly to preserve jobs. Actually, workers are ready to move away from fossil fuel production – as long as they can work and their families don’t suffer.

The 1383 offshore workers who responded to the survey crave job security, above all. Nearly half of them had been laid off or furloughed since oil prices crashed in March.

Many complained about precarious employment and the contract labour now rife on the North Sea.

The survey, Offshore: oil and gas workers’ views on industry conditions and the energy transition, was put together by Platform London, Friends of the Earth Scotland and Greenpeace.

The survey’s authors seem to be the first people who have actually asked workers what they think.

The Scottish government has a comfortably-funded Just Transition Commission, including trade union chiefs, that recently ran a consultation on its interim report.

But it was campaign groups, working with activists on the ground, who bothered to talk to offshore workers.

The survey, distributed via social media and targeted advertising, garnered 1546 responses. The results excluded replies by 163 people who work in midstream or downstream industries, and are focused on the 1383 respondents who work upstream. That’s a representative sample: about 4.5% of the workforce.

One of the survey’s most sobering results is that, when asked if they had heard of a “just transition”, a staggering 91% of survey respondents said no. (The term “just transition”, nowadays used and misused by politicians, was coined by trade union militants in the 1990s to define the need to fight for social justice during the switch away from fossil fuel burning and other ecologically ruinous practices.)

Big Oil Reality Check

By David Tong, et. al. - Oil Change International, September 2020

As oil and gas companies claim to be part of the solution of the climate crisis, the reality couldn’t be more different. Our new discussion paper analyzes the current climate commitments of eight of the largest integrated oil and fossil gas companies, and reveals that none come close to aligning their actions with the urgent 1.5°C global warming limit as outlined by the Paris Agreement.

This discussion paper measures oil and gas company climate plans against ten minimum criteria, focusing on the ambition, integrity, and ability necessary to implement a just transition and achieve a 1.5°C aligned managed decline of oil and fossil gas. Focusing on the oil majors, BP, Chevron, Eni, Equinor, ExxonMobil, Repsol, Shell, and Total, we find that only one company has committed to cutting oil and gas production over the next decade, and even that pledge (BP’s stated commitment to cut production by 40% by 2030) excludes around a third of the oil and gas it invests in extracting via its major share in oil giant Rosneft. Below is a summary table of these criteria included in the discussion paper.

Read the text (PDF).

The End of Oil Is Near: the pandemic may send the petroleum industry to the grave

By Antonia Juhasz - Sierra, August 24, 2020

This past spring, coastlines around the globe took on the feel of an enemy invasion as hundreds of massive oil tankers overwhelmed seaports from South Africa to Singapore. Locals and industry analysts alike used the word armada—typically applied to fleets of warships—to describe scenes such as when a group of tankers left Saudi Arabia en masse and another descended on China. One distressed news article proclaimed that a “floating hoard” of oil sat in tankers anchored across the North Sea, “everywhere from the UK to France and the Netherlands.” In April, the US Coast Guard shared an alarming video that showed dozens of tankers spread out for miles along California’s coast.

On May 12, Greenpeace activists sailed into San Francisco Bay to issue a challenge to the public. In front of the giant Amazon Falcon oil tanker—which had been docked in the bay for weeks, loaded up with Chevron oil—they unfurled a banner reading, “Oil Is Over! The Future Is Up to You.”

The oil industry has turned the oceans into aquatic parking lots—floating storage facilities holding, at their highest levels in early May, some 390 million barrels of crude oil and refined products like gasoline. Between March and May, the amount of oil “stored” at sea nearly tripled, and it has yet to abate in many parts of the world.

This tanker invasion is only one piece of a dangerous buildup in oil supply that is the result of an unprecedented global glut. The coronavirus pandemic has gutted demand, resulting in the current surplus, but it merely exacerbated a problem that’s been plaguing the oil industry for years: the incessant overproduction of a product that the world is desperately trying to wean itself from, with growing success.

Today, the global oil industry is in a tailspin. Demand has cratered, prices have collapsed, and profits are shrinking. The oil majors (giant global corporations including BP, Chevron, and Shell) are taking billions of dollars in losses while cutting tens of thousands of jobs. Smaller companies are declaring bankruptcy, and investors are looking elsewhere for returns. Significant changes to when, where, and how much oil will be produced, and by whom, are already underway. It is clear that the oil industry will not recover from COVID-19 and return to its former self. What form it ultimately takes, or whether it will even survive, is now very much an open question.

Under President Donald Trump, the United States has joined other petroleum superpowers in efforts to maintain oil’s dominance. While government bailout programs and subsidies could provide the lifeline the industry needs to stay afloat, such policies will likely throw good money after bad. As Sarah Bloom Raskin, a former Federal Reserve governor and former deputy secretary of the Treasury, has written, “Even in the short term, fossil fuels are a terrible investment. . . . It also forestalls the inevitable decline of an industry that can no longer sustain itself.”

In contrast to an agenda that doubles down on dirty fuels, a wealth of green recovery programs aim to keep fossil fuels in the ground as part of a just transition to a sustainable and equitable economy. If these policies prevail, the industry will rapidly shrink to a fraction of its former stature. Thus, as at no other time since the industry’s inception, the actions taken now by the public and by policymakers will determine oil’s fate.

The Greenpeace activists are right. Whether the pandemic marks the end of oil “is up to you.”

Culver City Takes Historic Steps to End Neighborhood Oil Drilling

By staff - Sierra Club, August 14, 2020

CULVER CITY, CA—Last night, Culver City councilmembers took the first necessary steps to phase out oil extraction in the city’s 78-acre portion of the Inglewood Oil Field. After a presentation on the amortization study commissioned by the Oil Subcommittee, and virtual public testimony, the council unanimously directed staff to develop a framework and timeline for the phase out of active wells. Diverse stakeholders gave testimony in favor of the motion from labor unions including United Steelworkers Local 675, California Nurses Association, and Jobs to Move America, environmental organizations from Sierra Club, NRDC, Food & Water Action, Center for Biological Diversity and renewable energy advocates including GRID Alternatives and the Clean Power Alliance in addition to many local residents and medical professionals.

Urban oil extraction and production have long exposed Los Angeles residents to toxic emissions and dangerous chemicals in their own neighborhoods. Oil production sites use and emit known carcinogens and endocrine disruptors, like benzene and formaldehyde, fine and ultra-fine particulate matter, and hydrogen sulfide. All of these chemicals have proven records of toxicity and are known to cause health impacts ranging from nosebleeds to chronic headaches, increased risks of asthma and other respiratory illnesses, and increased risk of cancer.

“Every day nurses across California treat children with asthma and we see firsthand the connection between environmental and public health,” said Tveen Kirkpatrick, R.N. wth California Nurses Association/ National Nurses United. “We are proud to stand with the communities closest to toxic operations in Culver City and call for a shutdown of the Inglewood Oil Field. California should look beyond fossils to a future where workers and communities don’t pay the price for the oil industry’s pollution with their bodies.”

Over one million people live within five miles of the massive Inglewood Oil Field, the largest urban oilfield in the nation, sprawled across Culver City and the historically African American neighborhood of Baldwin Hills. For decades, residents have called on local and state elected officials to strengthen health and safety protections from industrial oil operations near their homes, schools and parks. With Culver City now advancing plans to phase out existing oil wells, local environmental justice, labor and health advocates are urging councilmembers to seize this opportunity to model a Just Transition. They have sent multiple letters to Heather Baker, Assistant City Attorney, calling for the city to hold oil operators responsible for cleanup costs, and ensure that a properly trained and local unionized workforce is paid a living wage for the remediation of wells. 

Equitable Access to Clean Energy Resilience

By various - The Climate Center, August 5, 2020

Featuring Janea Scott, California Energy Commission; Genevieve Shiroma, California Public Utilities Commission; Carmen Ramirez, Mayor Pro Tem of Oxnard; Ellie Cohen, The Climate Center and others about policies to support climate justice and community energy resilience in lower-income communities who suffer disproportionately from pollution and power outages.

This summit gave overview of what California is doing now for clean energy resilience and what new policies are needed to provide access to clean and reliable power for all. Mari Rose Taruc, Reclaim Our Power Utility Justice Campaign; Gabriela Orantes, North Bay Organizing Project; and Nayamin Martinez, Central California Environmental Justice Network discussed the issue of equitable access from an Environmental Justice perspective.

Mark Kyle, former Director of Government Affairs & Public Relations, Operating Engineers Local 3 and currently a North Bay attorney representing labor unions, nonprofits, and individuals; Jennifer Kropke, Workforce and Environmental Engagement for International Brotherhood of Electrical Workers, Local Union 11, and Vivian Price, CSU Dominguez Hills & Labor Network for Sustainability talked about the Labor perspective.

Carolyn Glanton, Sonoma Clean Power; Sage Lang, Monterey Bay Community Power; Stephanie Chen, Senior Policy Counsel, MCE, and JP Ross, East Bay Community Energy discussed the work that Community Choice Agencies are doing to bring more energy resilience to lower-income communities.

Letter from USW Local 675 on Orphan Wells

By Philip Baker and David Campbell - United Steelworkers Local 675, August 5, 2020

We write to support an important economic recovery opportunity that will create jobs, provide tremendous health and environmental benefits to frontline communities, and advance a just transition away from fossil fuels: the accelerated remediation of oil and gas wells in California.

California law already requires that oil and gas operators fully fund the cost of oil and gas well remediation in California.

The job creation from this work is substantial. A recent national study estimated a total of 15.9 total jobs (direct, indirect, and induced) per million dollars spent.

Remediation of Oil and Gas Wells Must be Accelerated in Tandem with a Halt on Permitting New Wells and a Managed Phaseout of Oil and Gas Extraction.

Read the text (PDF).

Green Stimulus for Oil and Gas Workers: Considering a Major Federal Effort to Plug Orphaned and Abandoned Wells

By Daniel Raimi, Neelesh Nerurkar, and Jason Bordoff - Columbia Center on Global Energy Policy, School of International and Public Affairs, and Resources for the Future, July 2020

The global economic damages wrought by COVID-19 have dramatically magnified the suffering caused by the deadly virus. US lawmakers have already approved $3 trillion in aid to help offset the economic damage, and additional measures are under consideration. At the same time, the need to invest trillions in economic recovery has prompted calls to “build back better” by making the recovery a greener, less carbon-intensive one.

This paper, a joint effort between Resources for the Future and the Center on Global Energy Policy at Columbia University, examines the potential to boost US employment in the oil and gas workforce while also reducing pollution through a federal program to plug orphaned and abandoned oil and gas wells. These wells can leak methane and other pollutants that contribute to climate change, poor air quality, and other health and environmental risks. This research included interviews with key regulatory and industry officials to present the most up-to-date information on this rapidly evolving issue.

While states and the federal government fund well plugging activities through bonding requirements, industry fees, and other sources, these funds have not historically been adequate to reduce the inventory of orphan unplugged wells. Many of these sites date back to the 19th and early 20th centuries, when regulations including bonding requirements were weak or, in many cases, nonexistent. Estimates for the total number of orphaned and abandoned wells range from several hundred thousand to 3 million, depending on the definition of such wells needing attention. At the same time the oil and gas industry, which has seen employment drop to levels not seen since 2006, appears able to scale up to carry out this work. Labor and equipment are readily available due to the low oil price environment created by the collapse in demand from the coronavirus.

The paper finds:

  • A significant federal program to plug orphan wells could create tens of thousands of jobs, potentially as many as 120,000 if 500,000 wells were plugged. Addressing 500,000 wells would require state, tribal, and federal agencies to identify and prioritize hundreds of thousands of additional wells, most of which are unaccounted for in current inventories of orphaned wells. These inventories indicate that the largest number of orphaned wells are in Pennsylvania.
  • A widespread federal effort to plug orphaned and abandoned oil and gas wells would reduce local air pollution, safety risks, and greenhouse gas emissions at a cost of roughly $67 to $170 per ton of CO2-equivalent, well within the range of other policy options.
  • A significant pool of labor from the oil and gas industry could be deployed toward and benefit from such a program. More than 76,000 direct industry jobs were lost from February to June of 2020, a number that is likely to rise in the months to come. The job losses have been especially acute in rural regions where domestic oil and gas production occurs and where economies are closely tied to industry fortunes, such as the Permian Basin in West Texas and New Mexico, the Marcellus in Pennsylvania and Ohio, the Bakken in North Dakota, and parts of California, Colorado, Louisiana, Oklahoma, and other states. In these regions, this downturn not only affects workers but also funding for schools, infrastructure, public safety, and more, as a prior collaboration between RFF and CGEP found.
  • The costs of plugging and restoring well sites vary widely, and the total outlay of a well plugging program to address the known inventory of 56,600 orphaned wells could plausibly range from $1.4 billion to $2.7 billion. Expanding the program to identify and plug 500,000 wells could plausibly cost between $12 and $24 billion. States have different technical requirements for plugging wells and restoring surface locations, and some wells pose greater risks to groundwater, are harder to access, or are deeper than average. All these factors affect plugging and restoration costs.
  • One potential challenge of a very large program (i.e., addressing hundreds of thousands of wells) is that state regulatory offices would likely need to scale up administrative capacity to oversee such programs.
  • While states and the federal government require oil and gas companies to post bonds or other forms of financial assurance to pay for well plugging in case firms go bankrupt before plugging wells, these bonds often do not cover the full costs. Federal funding could exacerbate this problem if states and companies see it as alleviating their responsibility to plan for future remediation costs adequately. To avoid this, a federal program could prioritize plugging wells abandoned decades ago that were not subject to modern regulatory frameworks.

Read the text (PDF).

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