Alberta Sector Profile: Mining, Quarrying, and Oil and Gas

Highlights

  • This profile focuses on the oil and gas subsector within mining, quarrying, oil and gas. Overwhelmingly, employment is within the oil and gas subsector and support activities for oil and gas extraction in Alberta.
  • A substantial portion of Alberta's annual GDP comes from the oil and gas subsector. Over 21% of Alberta's annual GDP comes from the oil and gas subsector, as does 6% of provincial employment.
  • In 2021, there were 84,500 people employed in Alberta in the oil and gas subsector and 50,500 people employed in the support activities for the subsector.
  • While oil prices are projected to remain high in 2022 and into 2024, there remains a high amount of uncertainty within the subsector in Alberta.

Provincial Overview

The sector is divided into two subsectors: oil and gas extraction (NAICS 211) and support activities for mining, and oil and gas extraction (NAICS 213). The oil and gas extraction subsector includes establishments primarily engaged in operating oil and gas field properties. This subsector includes the production of oil, the mining and extraction of oil from oil shale and oil sands, and the production of gas and hydrocarbon liquids, through gasification and liquefaction. [1] The support activities for mining and oil and gas subsector comprises establishments that provide support services, on a contract or fee basis, for the mining and quarrying of minerals and for the extraction of oil and gas. Establishments engaged in the exploration for minerals, other than oil or gas, are included. [2]

In 2021, there were 84,500 people employed in Alberta in the oil and gas extraction subsector and 50,500 people employed in the support activities subsector.

Line graph showing subsector employment from 2011 to 2021

Source: Statistics Canada Labour Force Survey, ESDC custom table

Show graphic in plain text

Subsector Employment

Year Mining and
Quarrying		 Support Activities for Mining
and Oil and Gas Extraction		 Oil and Gas
Extraction
2011 5,800 62,200 78,300
2012 6,200 70,800 92,900
2013 7,200 82,800 79,500
2014 7,600 80,700 81,800
2015 6,100 63,800 81,300
2016 5,300 55,000 69,300
2017 9,400 51,600 71,600
2018 7,500 61,800 73,800
2019 6,500 58,700 72,800
2020 3,500 51,500 70,200
2021 4,300 50,500 84,500

Note: Figures shown are employment estimates.

The majority of those employed in the oil and gas subsector are core working age men. About 78% of those employed in the sector are male, while nearly 81% of those employed are in the core working age (25-54 years old) population.

Chart showing employment distribution by gender in 2021

Source: Statistics Canada Labour Force Survey, ESDC custom table

Show graphic in plain text

Gender Distribution (2021)

Gender % of Sector Employment
Female 22%
Male 78%

Employment in the oil and gas subsector tends to create a ripple effect of increased employment in other sectors of the economy. A Statistics Canada report estimated that every direct job created in the oil and gas subsector typically creates two indirect jobs in businesses that sell to oil and gas producers and three “induced” jobs in sectors where oil and gas workers spend their money, such as accommodation and food services, retail, education and medical services. [3] Based on a Statistics Canada 2016 supply-use table, major suppliers of inputs to the oil and gas subsector include manufacturing (18.7%), finance, insurance, and real estate services (18.8%), other mining industries (15.0%), professional services (12.8%), administrative services (7.9%), and the oil and gas industry itself (7.4%). [4]

Chart showing employment distribution by age in 2021

Source: Statistics Canada Labour Force Survey, ESDC custom table. Totals may not add to 100% due to rounding.

Show graphic in plain text

Age Distribution (2021)

Age Group % of Sector Employment
15-24 years 5%
25-54 years 81%
55+ years 15%

Sector Trends

Alberta had the largest decline in economic activity due to the pandemic of all the provinces because of the major drop in oil demand. [5] In March 2020, the price of Western Canadian Select (WCS) hit a record low, at US $3.50 per barrel. [6] Oil production in Alberta was down drastically on a year-over-year basis from April 2020 through October 2020. [7] As a result, Alberta saw lower oil and gas extraction and reduced resource-project related engineering construction, and its real GDP shrank by 8.2% in 2020. [8]

As the world began to recover from the pandemic, demand for oil increased significantly. Oil production began to increase at the end of 2020 and reached record levels in 2021 at 3.61 million barrels per day [9] . On a year-to-date basis, output was roughly 102 million barrels (9%) higher in 2021 than in 2020 and 35 million barrels (3%) higher than in 2019. [10] By December 2021, the price of WCS had increased to US $65.60 per barrel. [11]

Line graph showing sector employment from 2011 to 2021

Source: Statistics Canada Labour Force Survey, ESDC custom table

Show graphic in plain text

Mining, Quarrying, & Oil and Gas Employment

Year Employment
2011 146,300
2012 169,900
2013 169,600
2014 170,100
2015 151,200
2016 129,600
2017 132,600
2018 143,200
2019 138,000
2020 125,200
2021 139,300

Note: Figures shown are employment estimates

Employment in the sector also improved in 2021. Employment in the oil and gas subsector increased by +14,300 jobs (+20%).

Going into 2022, the short term prospect for oil and gas is positive. Robust global demand combined with disruptions in global supply due to the conflict in Ukraine have kept energy prices high. Oil prices are forecast to remain in the low US $70 per barrel range over 2022. [12] Rapidly changing geopolitical conditions is resulting in a high amount of volatility in energy prices.

Chart showing GDP percentage share in 2021

Source: Statistics Canada, Table 36-10-0400-01 (2021)

Show graphic in plain text

21% of the province's total GDP comes from this sector

Sector Outlook

While oil prices are projected to remain high in the rest of 2022 and into 2024, there remains a high amount of uncertainty within the oil and gas subsector in Alberta.

Despite the recent surge in oil prices, capital spending in the sector has been decreasing in recent years. National oil and gas extraction spending in 2021 was $3.6 billion higher (+17%) than 2020. This was, however, was $9.7 billion (-28%) below the pre-pandemic level in 2019 and $53.9 billion (-69%) below 2014. [13] The Canadian Association of Petroleum Producers estimates that capital spending in the sector will by increase by 22% in 2022, but still this is still well below levels of investment a decade ago. [14]

Canadian companies remain wary of spending aggressively to grow oil production after 2020 pandemic-induced oil price collapse. Instead, many producers are prioritizing paying down debt incurred during the pandemic and returning profits to shareholders, who have been demanding that companies rein in spending. Additionally, other producers, including Canadian Natural Resources Ltd. and Suncor Energy have focused on producing at the same level as efficiently as possible to drive down costs. [15]

Additionaly, the problem of limited export capacity is likely to persist. In January 2021, the cancellation of the Keystone XL pipeline, which would have carried up to 830,000 barrels per day of Alberta crude to the United States, was announced. [16] This development means that the price discount between Western Canadian Select (WCS) and West Texas Intermediate (WTI) will likely persist, as the discount is largely a function of how difficult it is to get WCS to coastal ports. Most of Alberta's oil goes to refineries in the US Midwest or the US Gulf Coast.

While demand has jumped for relatively cheap Canadian natural gas, driving exports to the United States to three-year highs, it remains fact that Canada has no direct export capacity for natural gas or liquefied natural gas (LNG). Alberta natural gas currently flows to the US Gulf Coast via pipeline or rail for export through US LNG terminals. [17]

The sector is also facing increasing pressure to reduce emissions related to oil and gas projects in Alberta. In June 2021, Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy announced the Oil Sands Pathways to Net Zero initiative. These companies operate approximately 90% of Canada's oil sands production. The goal is to work with the federal and Alberta governments to achieve net zero greenhouse gas (GHG) emissions from oil sands operations by 2050, and to help Canada meet its climate goals, including its Paris Agreement commitments and 2050 net zero target. [18]

The province is working with industry to support technologies such as carbon capture to reduce emissions. In March 2022, Alberta picked six proposals from firms including Enbridge and Shell to explore developing open-access carbon storage hubs in the Edmonton region. The hubs would have capacity to store around 20% of oil-rich Alberta's total emissions, and would be part of a broader strategic plan to develop a carbon capture and storage (CCS) industry in the province. [19]

Also in March 2022, the Government of Canada released its new emissions-reduction plan to reach greenhouse-gas targets by 2030. It projects the oil and gas industry needs to cut emissions 42 per cent from current levels if Canada is to meet its new goals. A hard cap will be imposed on emissions from the sector, once consultations are complete and work on the cap is finalized. [20]

Occupation of Interest: Oil and Gas Well Drillers, Servicers, Testers and Related Workers

Oil and gas well drillers and well servicers control the operation of drilling and hoisting equipment on drilling and service rigs, and direct the activities of the rig crew under supervision of the rig manager. Oil and gas well loggers, testers and related workers operate specialized mechanical or electronic equipment, tools or instruments to provide services in conjunction with well drilling, completion or servicing. They are employed by drilling and well service contractors, petroleum producing companies and well logging or testing companies.

Although oil prices and demand have largely recovered from the initial shock of the COVID-19 pandemic, Alberta's oil and gas sector still faces challenges including pipeline capacity constraints, major project cancelations and increasing hesitancy to invest in new fossil fuel projects.

Approximately 22,600 people work in this occupation. Oil and gas well drillers, servicers, testers and related workers mainly work in support activities for mining, oil and gas (60%), and to a lesser extent in oil and gas extraction (21%). Full-time workers represent more than 95% of the workforce.

Bar graph showing occupational employment from 2011 to 2021

Source: Statistics Canada Labour Force Survey, ESDC custom table

Show graphic in plain text

Occupational Employment

Year Employment
2011 16,500
2012 18,700
2013 21,500
2014 23,100
2015 21,500
2016 17,200
2017 21,200
2018 25,800
2019 21,000
2020 19,400
2021 21,600

Note: Figures shown are employment estimates

Most oil and gas well drillers, servicers, testers and related workers work only part of the year (59%), while less than half work all year (41%). Those who worked only part of the year did so for an average of 34 weeks.

Within oil and gas well drillers, servicers, testers and related workers, 11% of are self-employed compared to an average of 12% for all occupations in Alberta.

For more information on this occupation including wages, job postings, and breakdown of outlook by region, please see the market report on jobbank.gc.ca.

Note

In preparing this document, the authors have taken care to provide clients with labour market information that is timely and accurate at the time of publication. Since labour market conditions are dynamic, some of the information presented here may have changed since this document was published. Users are encouraged to also refer to other sources for additional information on the local economy and labour market. Information contained in this document does not necessarily reflect official policies of Employment and Social Development Canada.

Prepared by: Labour Market Information (LMI) Directorate, Service Canada, Western Canada and Territories Region

For further information, please contact the LMI team

Endnotes

  1. Statistics Canada, North American Industry Classification System (NAICS) Canada 2017 Version 1.0- 211 - Oil and gas extraction ↑

  2. Statistics Canada, North American Industry Classification System (NAICS) Canada 2012 - 213 - Support activities for mining, and oil and gas extraction ↑

  3. Canadian Energy Centre (June 10, 2021) A Matter of Fact: Oil and gas jobs deliver high value for Canada Workforce provides an outsized contribution to national finances ↑

  4. Statistics Canada (July 8, 2020) The Decline in Production and Investment in Canada's Oil and Gas Sector and its Impact on the Economy ↑

  5. Statistics Canada (June 23, 2021). Economic impacts of COVID-19 in the provinces and territories ↑

  6. Government of Alberta, Oil Prices ↑

  7. ATB Financial (February 18, 2021) Oil production in Alberta getting back on track ↑

  8. Statistics Canada (June 23, 2021) Economic impacts of COVID-19 in the provinces and territories ↑

  9. Oil Sands Magazine (February 7, 2022) 2021 in Five Charts: A Look Back at a Record-Breaking Year For the Oil Sands ↑

  10. ATB Financial (January 13, 2022) Oil production in Alberta remains elevated ↑

  11. Government of Alberta, Oil Prices ↑

  12. Conference Board of Canada (February 15, 2022) Virus Remains a Driving, Uncertain Force in Oil and Gas: Canada's Two-Year Energy Outlook ↑

  13. ATB Finanical (March 3, 2022) Oil and gas spending staged a minor comeback in 2021 ↑

  14. CBC News (January 20, 2022) Industry group expects oil and gas investment to rise 22 per cent this year to $32.8 billion ↑

  15. Reuters (March 3, 2022) As world scrambles for oil, Canadian producers reluctant to spend on growth ↑

  16. CTV News (January 21, 2022) TC Energy cutting more than 1,000 Keystone XL construction jobs as work halted ↑

  17. BOE Report (October 25, 2021) Canada boosts U.S. natgas exports, drills more as global prices surge ↑

  18. Suncor Energy (June 09, 2021) Canada's largest oil sands producers announce unprecedented alliance to achieve net zero greenhouse gas emissions ↑

  19. Reuters (April 5, 2022) Analysis: Alberta's ambitious carbon capture plans hang on Canada govt and shareholder support ↑

  20. Financial Post (March 29, 2022) Canada's new climate roadmap will require oil and gas sector to slash emissions 42% by 2030 ↑

Date modified: