How Many People Really Do Work in the Oil Sands?

Clean Energy Canada (CEC) produced a report last week entitled “Tracking the Green Energy Revolution 2014 – Canada.” Though this report isn’t about “green jobs,” one of the comparisons made (and picked up by the media) is that “in 2012 there were 23,700 direct clean-energy sector jobs and 22,340 direct oil sands jobs.”

A lot of people were surprised by the number for oil sands jobs; the perception is that the oil and gas sector in Alberta employs a lot of people, and the oil sands is a big chunk of that. According to Statistics Canada (table 383-0031), the total number of jobs in oil and gas extraction was 57,305 in 2012. Add 69,555 jobs in support activities (NAICS codes 213111 and 213118) for oil and gas extraction, and that’s a far different picture. This also excludes pipeline jobs, which are also part of the energy sector. Of course, it is unfortunate that the jobs numbers for conventional and unconventional aren’t available, but these are still all direct jobs. It indicates that Clean Energy Canada vastly underestimates oil sands jobs. How did this happen?

Based on a subsequent blog post from CEC, the source for the clean-energy jobs is the “Canadian Clean Technology Industry Report” from Analytica Advisors, and the source for oil sands jobs is “The Decade Ahead: Labour Market Outlook to 2022 for Canada’s Oil and Gas Industry,” a 2013 Petroleum Human Resources Council report.

I haven’t read the Analytica Advisors report (it costs $2500 to access), but based on the Executive Summary, their numbers are based on a survey of clean tech firms. I can’t be sure, but I think they’ve counted all the jobs at each company as clean tech jobs, regardless of the person’s role. (Aside: this is an issue with the “green jobs” literature. Arguably, an accountant at an oil company fulfills the same function as an accountant at a clean tech or clean energy company, and so it is job function rather than where a person works that should matter when counting “green” or “clean” jobs. For more details, see this School of Public Policy report.)

Now, looking at the Petroleum Human Resources Council (PHRC) report, total estimated industry employment in 2012 was 195,200. This is broken down into oil and gas services (94,100), conventional exploration and production (72,000), oil sands (22,300) and pipelines (6,400). Their data is sourced from Statistics Canada’s labour force survey and industry surveys. Now, the important point is how “oil sands jobs” are defined here; the following details are from Appendix I of the PHRC report. The Petroleum Human Resources Council undertook a workforce survey in 2011 that covered 100 per cent of mining firms, 100 per cent of upgraders and 73 per cent of in situ production. Companies were asked to report headcounts by location of work, occupation, and occupation-type; they were also asked to include only those positions 100 per cent dedicated to oil sands operations. I’m not sure how the surveyed companies interpreted this, but it does suggest support activities (chefs in the camps, accountants at head offices) are not included in oil sands employment.

So what does this tell us in the end? The problem really seems to be one of measurement. It’s not entirely an apples-to-apples comparison, so in that, the CEC report is a little misleading. The PHRC numbers provide a lower bound on oil sands employment; an accurate comparison between the “clean energy jobs” and “oil sands jobs” would require numbers on total employees at companies involved in the oil sands. That does get a bit tricky, though, as many operators in the oil sands are also involved in conventional oil and gas production.

Measurement and definition is key here. However, the discussion about which sector has more jobs misses a very important point: jobs are costs. The more jobs per dollar of output produced – whether its oil in the oil sands or “clean energy” – the less efficient production is. We could clearly generate all the clean energy we want by riding on bicycles to generate electricity, but that isn’t an effective use of time, nor an efficient way to produce electricity. Instead of focusing on jobs created as a measure of success for the clean tech or clean energy industry, we should be concentrating on what really matters: emissions in each sector, and how efficiently energy is being used to produce the things we want.