Robots could replace hundreds of thousands of oil and gas jobs by 2030

Marcy de Luna, Houston Chronicle  March 30, 2021

After losing thousands of jobs to the pandemic downturn, robotics and automation could slash hundreds of thousands more oil and gas jobs around the world and sharply reduce labor costs by 2030, according to Norwegian energy research firm Rystad Energy.

At least 20 percent of the jobs in drilling, operational support and maintenance could be automated in the next 10 years, Rystad said Monday, with U.S. employment needs reduced by more than 140,000 workers.

The industry has already seen significant job losses. Nearly 60,000 oil exploration and production jobs in Texas were lost in 2020, as the global pandemic caused an unprecedented oil crash. Nationally, the oil and gas industry lost an estimated 107,000 jobs during the pandemic, according to global consulting firm Deloitte.

The use of robots is already emerging as a low-cost alternative in the offshore industry, where they can stay underwater permanently and easily access places that are difficult to reach for submersibles remotely operated by humans.

But their use in inspection, maintenance and repairs is where robotics has gained the most traction in recent years. For example, the self-propelled robotics arms developed by Kongsberg Maritime and used by Norwegian operator Equinor can travel longer distances and carry out subsea maintenance and repair in confined spaces.

Drilling, which is costly work and involves dangerous tasks in challenging environments, also stands to be upended by robots.

Robotic drilling systems can potentially reduce the number of roughnecks required on a drilling rig by 20 to 30 percent, decreasing the annual cost of U.S. wages in the industry by more than $7 billion by 2030, according to Rystad.

The number of drilling rigs in Texas has already plunged. The figure decreased by more than 60 percent in 2020, dropping to 155 in December, the lowest level since Baker Hughes started tallying the weekly rig count in 1944.

Technological advancements and resulting job cuts are not new to the industry, which has become more efficient over the years, said Karr Ingham, economist at the Texas Alliance of Energy Producers, an industry organization focused on independent producers.

"We don't need as many employees to produce record and growing amounts of crude oil and natural gas, and potentially as much as we need," Ingham said. "These efficiencies have been coming. They've been in place and growing for some time. All industries do this."

The advancements will help the industry save money, Ingham said.

"It's time, labor and money saving," he said. "It is the objective of any firm, which is to produce to the most of what I can produce with the fewest resources deployed at the lowest cost possible."

Sumit Yadav, a service analyst at Rystad, said in a Monday release that these savings will be partially offset by the considerable investments in new technology.

While the emergence of robotics in the oil and gas industry seems inevitable, there are challenges that will delay full-scale adoption by a few years, including their long-term reliability. Robots, according to Rystad, have yet to be widely tested and have limited communication capabilities between units.

In addition, labor organizations will likely fight further automation and use of robotics, which may be subject to tests to ensure they meet federal safety and environmental standards, Rystad said.