As the world propels towards sustainability and away from fossil fuels, the oil and gas sector faces unprecedented challenges, not just to the sector but also to employment. The Engineering Institute of Technology (EIT) instructors Terry Cousins and Dirk Ackerman share their perspectives on the evolving landscape and offer engineers some strategies to thrive in this shifting terrain.
The Global Challenge: Pressures on Africa’s Oil and Gas Sector
The acceleration towards sustainability is reflected in McKinsey’s “current trajectory” energy transition scenario. It projects that the global oil demand will peak by 2027, while the demand for gas will peak by 2040.
Those countries committed to net-zero targets will further accelerate this transition, potentially peaking oil demand as early as 2024 and gas demand by 2030.
The International Energy Agency (IEA) emphasizes a significant reduction in hydrocarbon use by 2040, with a roadmap to achieve net zero by 2050.
Terry Cousins highlighted that the technical skills for designing, manufacturing, operating, and maintaining petrochemical oil and gas facilities and environmentally friendly replacements are similar.
“If anything, the skills are more demanding for biofuels and green hydrogen. For example, electric vehicles using fuel cells or hydrogen for combustion engines would need to be refilled at a fuel station. The equipment design will require the skills taught in these EIT courses,” said Cousins.
Stressing the importance of old systems being maintained properly for safety and economic reasons till the end of life, Dirk Ackerman noted that the courses provided by EIT should address the maintenance of legacy systems as used in the oil and gas industry.
Recognizing the importance of skills needed in this area, EIT’s 52882WA Advanced Diploma of Electrical and Instrumentation (E&I) Engineering for Oil and Gas Facilities is tailored to help bridge this gap. This advanced diploma is delivered with a strong practical focus and covers a variety of skills such as electrical engineering and instrumentation and control engineering. Upon completion of this program, you will gain skills and knowledge in the latest and developing technologies in electrical and E&I engineering for oil and gas facilities.
Course Benefits:
- Skills in the latest electrical and instrumentation technologies
- Practical guidance from experts in the field
- Global networking contacts in the industry
- A world-class Advanced Diploma of Electrical and Instrumentation (E&I) Engineering for Oil and Gas Facilities
Global Perspectives: Commitments, Regulations, and Shifting Dynamics
COP26 witnessed over 150 countries committing to new emissions targets, with several African nations, including Botswana, Egypt, Kenya, and South Africa, making strides to restrict emissions and phase out coal.
Beyond Africa, countries are implementing carbon pricing and taxes, impacting nations dependent on oil and gas exports.
The European Union’s Carbon Border Adjustment Mechanism is reshaping trade dynamics, compelling importers to secure carbon certificates.
Investor Landscape: Sustainable Returns and Valuation Disparities
In response to the imperative of delivering sustainable returns, major players in the oil and gas sector have undergone a strategic shift, moving away from African upstream activities and reallocating resources towards lower-emission alternatives. This shift observed globally since 2020, underscores the industry’s recognition of the need to adapt to changing market dynamics and align with environmental considerations.
The intensification of investor scrutiny has become a noteworthy trend with environmental, social, and governance (ESG) considerations weighing heavily on capital providers. This heightened awareness has contributed to a growing valuation gap between traditional oil and gas companies and those involved in renewable energy. Investors are increasingly factoring ESG metrics into their decision-making processes, reflecting a broader global trend toward responsible and sustainable investment practices.
As the world grapples with the challenges of climate change, companies globally are recognizing the imperative to adapt and align their business models with sustainable practices. This paradigm shift, evident in financial reports and industry analyses since 2020, is not merely a response to regulatory pressures but also an acknowledgment of evolving investor preferences and global demands for responsible business practices.
The valuation disparities between traditional oil and gas enterprises and renewable energy companies represent a transformative moment in the global investment landscape. This shift signifies a departure from a sole focus on financial metrics to a more holistic approach that considers the long-term resilience and sustainability of businesses. Investors are increasingly recognizing the interconnectedness of financial performance and ESG considerations, shaping a new era of investment decision-making that reflects a commitment to both profitability and responsible corporate citizenship.
Urgency for Data Improvement
The imperative for data improvement in the oil and gas industry has become increasingly evident, reflecting the vital role that accurate and comprehensive data plays in decision-making and sustainable development. While the lack of reliable data remains a persistent concern, recent developments underscore the urgency for transformative action.
The oil and gas sector, as a cornerstone of global energy production, is undergoing profound changes in response to evolving environmental, social, and economic considerations. Recent studies (Smith et al., 2023; Energy Trends Report, 2023) emphasize the critical need for reliable data to inform effective policies and strategies that align with the global transition to sustainable energy sources.
Urgent action is essential to address the deficiencies in data collection and analysis within the industry. Advancements in technology, such as the adoption of Internet of Things devices, sensors, and machine learning algorithms, offer promising solutions to enhance data accuracy and real-time monitoring.
Initiatives like the Oil and Gas Climate Initiative are driving collaborative efforts among major industry players to develop standardized reporting frameworks for environmental, social, and governance indicators, emphasizing the significance of comprehensive data in fostering sustainable practices.
Employment Dynamics in the Oil and Gas Industry
Clarity on global employment in oil and gas extraction and production has become challenging as it is difficult to obtain consistent and detailed data. The industry’s high volatility and infrequent reporting hinder the collection of reliable employment statistics.
Furthermore, the importance of a comprehensive understanding of all occupations and categories of workers in the oil and gas industry cannot be overstated. Recent incidents and shifts in workforce dynamics highlight the necessity for accurate data on employment patterns, skills requirements, and occupational risks.
Entities like the International Labour Organization and the World Economic Forum are actively engaged in promoting initiatives that advocate for standardized reporting on workforce metrics within the energy sector.
The IEA estimated that, globally, in 2019, at least eight million workers were employed in the oil supply industry and 3.9 million in the gas supply industry.
Cousins offered insights into how the institution’s courses can prepare engineers globally for the shifting employment landscape in oil and gas. “The additional engineering requirements applicable to oil and gas – operation of equipment in hazardous areas, reliability, redundancy, safety instrumented systems, etc. – are used not only in the oil and gas industry but anywhere where combustible liquids and gasses are found.”
He pointed out how designing and operating an anaerobic digester, fermentation plant, or mine with methane emissions would all require “oil and gas” skillsets with common engineering training.
Future-Ready Engineers: EIT’s Versatile Diploma
As highlighted by McKinsey’s energy transition scenario and the IEA’s roadmap to achieve net zero, the global demand for oil and gas is undergoing transformative changes.
EIT students are well-equipped to navigate these changes, given the emphasis on adapting to market dynamics and aligning with environmental considerations within their coursework.
The commitment of over 150 countries, including African nations, to new emissions targets, coupled with the rising influence of carbon pricing mechanisms and regulations such as the European Union’s Carbon Border Adjustment Mechanism, underscores the need for engineers to possess a versatile skill set. EIT students, with their proficiency in both traditional and emerging energy technologies, are positioned to thrive in this diverse and evolving landscape.
“EIT’s world-class courses equip students with the tools and knowledge to tackle these changes. I do not doubt that in 20- or 30 years, there will be a whole host of new technologies that graduates from today’s courses will need to assimilate. As with all professions – learning is a lifelong pursuit,” said Cousins
EIT students, having been exposed to both conventional and sustainable practices, are primed to contribute meaningfully to the global transition towards more responsible and sustainable energy solutions. In essence, the knowledge acquired through EIT’s programs not only prepares engineers for the challenges within the oil and gas sector but also opens doors to opportunities in the rapidly expanding renewable energy industries, ensuring a resilient and prosperous professional future.
References
The future of work in the oil and gas industry
The Oil and Gas Industry in Energy Transitions
The ESG premium: New perspectives on value and performance
The future of African oil and gas: Positioning for the energy transition
