Oil Companies Bleeding Young Talent to Renewables
March 3, 2023
More signs of sun setting on oil industry, at least in its current form.
Emma McConville was thrilled when she landed a job as a geologist at Exxon Mobil in 2017. She was assigned to work on one of the company’s most exciting and lucrative projects, a giant oil field off Guyana.
But after oil prices collapsed during the pandemic, she was laid off on a video call at the end of 2020. “I probably blacked out halfway,” Ms. McConville recalled.
Her shock was short-lived. Just four months later, she landed a job with Fervo, a young Houston company that aims to tap geothermal energy under the Earth’s surface. Today she manages the design of two Fervo projects in Nevada and Utah, and earns more than she did at Exxon.
“Covid allowed me to pivot,” she said. “Covid was an impetus for renewables, not just for me but for many of my colleagues.”
Oil and gas companies laid off roughly 160,000 workers in 2020, and they maintained tight budgets and hired cautiously over the last two years. But many renewable businesses expanded rapidly after the early shock of the pandemic faded, snapping up geologists, engineers and other workers from the likes of Exxon and Chevron. Half of Fervo’s 38 employees come from fossil fuel companies, including BP, Hess and Chesapeake Energy.
Executives and workers in energy hubs in Houston, Dallas and other places say steady streams of people are moving from fossil fuel to renewable energy jobs. It’s hard to track such movements in employment statistics, but the overall numbers suggest such career moves are becoming more common. Oil, gas and coal employment has not recovered to its prepandemic levels. But the number of jobs in renewable energy, including solar, wind, geothermal and battery businesses, is rising.
The oil and gas industry had roughly 700,000 fewer workers last year than six years earlier, a decline of over 20 percent. Much of that drop had to do with the slowing of the shale drilling boom and greater automation. By comparison, employment in wind energy grew nearly 20 percent from 2016 to 2021, to more than 113,000 workers.
In more than a dozen interviews, energy workers and executives said they had switched to renewable energy because they felt that the oil and gas industry’s best days were behind it. Others said they were no longer willing to tolerate the extreme ups and downs of oil and gas prices, and the accompanying cycle of rapid hiring followed by crushing layoffs. Many said concerns about climate change, which is primarily caused by the burning of fossil fuels, were a factor in their decision.
Finally, after extensive research and planning, and under the Biden Administration’s leadership, BOEM announced the location of two wind energy areas in the Gulf of Mexico in October. The larger of the two will be located off the coast of Galveston, Texas, approximately 24 nautical miles from land in an area of almost 510,000 acres, and will provide electricity to around 2.1 million homes. The second wind farm in the Gulf will be approximately 56 nautical miles off the coast of Lake Charles, Louisiana, in an area of almost 175,000 acres. While smaller, it will still be able to power over 740,000 homes.
Given Louisiana already has a large community of offshore gas and oil workers whose skills can be largely transferred to turbine construction and maintenance, the state is in a good position to move forward with offshore wind farms. With wind lease sales in the Gulf of Mexico opening in 2025, anywhere from 7,300 to 14,700 offshore construction jobs and up to 2,800 permanent positions are expected.
Jody Robins made this switch, going from a career as an oil drilling engineer for oil companies, including Chevron, to his current role as a senior geothermal drilling engineer for the National Renewable Energy Laboratory. He moderated a panel at the conference about geothermal drilling.
“I loved the work in oil and gas,” Robins told me later. “But as the years went on, I got more and more worried about global warming and I just did not feel good about the industry, and, frankly, most of the industry’s attitude toward global warming. I was just ready to leave.”
As he sees it, the oil and gas industry is like the coal industry was 10 or 15 years ago: in a gradual decline that is making workers look for other options.
“I get contacted quite a bit by oil and gas people that have either lost their job or are not happy and wondering what else they can do out there,” he said. “When you look at solar and wind, it’s not often a great fit for oil and gas workers to go over to those industries, so naturally they gravitate towards geothermal.”
But for now, the geothermal industry is too small to be a landing spot for many oil and gas workers.
Robins was the lead author of a report released this month about the current state of the U.S. geothermal industry and technologies. It shows that geothermal power remains a small part of the electricity mix, and construction of new geothermal power plants has barely kept up with the closing of older plants.
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The geothermal industry may not stay small for long, if we can believe a new University of Texas study.
The increasing engagement of oil and gas entities in geothermal is both reflected in and explained by outcomes of the study. Authors report that oil and gas technology and knowledge transfer into geothermal is projected to deliver 20 to 43 percent in cost savings to geothermal, using existing technologies in use in the oil and gas industry today, and that nearly 70% of oil and gas entities engaged with the study reported that there are no geothermal related technical challenges that the oil and gas industry cannot solve.
“As an energy technology company, Baker Hughes has supported the geothermal sector for more than 40 years, providing technology and expertise for some of the world’s most innovative projects. Baker Hughes continues its strategic focus on new energy frontiers, including geothermal — launching into the next 40 years and beyond,” said Ajit Menon, Baker Hughes Vice President for Geothermal.
Researchers in the study calculated multiple growth scenarios for geothermal development, both globally and in Texas, placed in the context of the scale of the oil and gas industry. They concluded that drilling 1.4 million wells globally between 2030 and 2050 could meet 77 percent of the world’s projected electricity demand, while enabling Texas to decarbonize 100 percent of its grid. “The outcomes of this study are big – but so is the oil and gas industry – and the role of the industry is what has been the missing link in prior assessments about geothermal and its potential to scale,” noted Jamie Beard, Principal Investigator and Editor of the study. “To achieve the outcomes reported, we would need an Apollo-style mobilization of effort globally, but that is what climate change requires of us. We’ve done Apollo before – let’s do it again.”
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