Throughout each technological era, the energy industry has remained one of the most naturally challenging sectors to work within. But in recent years it has become even more difficult for energy companies to continue to operate profitably whilst meeting increasingly demanding laws and legislation. Not only is the energy industry especially difficult to navigate because of its environmental responsibilities, the sector – particularly the UK’s oil and gas domain- is now faced with two glaringly obvious dilemmas; people and cost.
The Increasing Lack of Qualified Engineers
The energy industry currently employs over 10 million people globally but less than half a million of those people work within the British sector. The numbers alone is not the problem – it’s the fact that there are not enough experienced people in the UK oil and gas industry that are ready to step in once a large proportion of experienced energy engineers retire in the very near future.
According to the World Petroleum Council (WPC), between 40 and 60% of petroleum engineers and geoscientists are set to retire in the next five years. And whilst there has been an increase in the volume of graduate engineers entering the UK industry, there is a worryingly low amount of people with more than five years experience that will soon have to fill roles that require extensive knowledge and understanding of the industry.
It is difficult to say how the energy industry in the UK plans to overcome this issue, as there are a number of reasons as to why it is lacking experienced personnel in the first place. Many engineers and scientists pursuing a career in energy generally move to regions such as Africa, the Middle East or Russia, where natural resources are more plentiful and the work is typically more lucrative. It is not only the location of the gas and oil that attracts these energy professionals to these places, but the climate and the wealth that regions such as the Middle East and Africa can offer.
The Cost of Industry Operations
You will hardly be surprised to hear that the second factor challenging the UK oil and gas industry in 2013 is the cost of its internal operations. As we all know, oil has been consistently rising in price for many years now and this is because of the high cost of extracting the natural resource. Ten years ago a barrel of oil could cost as low as $40, nowadays the same barrel can set you back as much as $150. This is because the time when it was acceptable to remove natural resources from land-based or shallow water deposits has passed. These days, energy suppliers have to dig ultra-deep watered wells in order to remove oil and gas – a process which is undeniably more expensive.
David King is an energy industry analyst and regularly writes articles on behalf of fittings manufacturer Waverley brownall.