- Written by Zarif Alibhai Zarif Alibhai
- Published: 14 December 2015 14 December 2015
Geologist works for $11.80 an hour after being laid off from the patch
Derek Thornton is one of thousands of Albertans who trained for jobs in the oil and gas industry only find themselves caught up in a severe economic downturn.
“I am a geologist. I went to the University of Calgary and graduated in 2013 in petroleum geology,” said Thornton. “I worked downtown once I graduated from university for an entire year until my company was about to collapse.”
Thornton was an employee at Shoreline Energy Corporation when he was laid off.
“The takeaway that if I could have done everything differently if I wanted a job at the end of this, the best thing I could have done, is gone to trade school where you have a 90% hiring rate,” said Thornton.
Now 28, Thornton works at a Sobeys liquor store making just above minimum wage. He said he thought he had chosen a profession that would pay well even with the boom and bust cycles in oil and gas.
“I had an open relationship with my boss. It was an open window and when things really hit the fan he approached me to say, ‘Derek, you should look for another job because you won’t have a position here very soon.’”
“It was a little depressing, to be honest. At that point in time I was quite a positive person. I thought that I could still make it out there. It’s been really tough otherwise and it seemed to have been beaten down again and again.”
Thornton hopes the downturn won’t last much longer, while others working in the oil and gas industry have experienced this before.
Boom and bust cycle
Todd Hirsch, chief economist at ATB Financial, said the economy will continue to challenge Albertans for the foreseeable future.
“It is going to be a challenging winter. It’s going to be the worst downturn that we have seen in many years,” said Hirsch, “Oil prices are around 40, 45 dollars a barrel. This is too low for producers in this province to do well. We’re going to see perhaps two, three years of low oil prices. It’s going to be a tough year in 2015,2016 for the energy patch.
“There are going to be more layoffs as companies try to get their cost down.”
Total number of layoffs
According to Markus Ermisch, media relations advisor at the Canadian Association of Petroleum Producers, most of the layoffs have been in Alberta.
“There are 36,000 people who have been laid off in oil and gas (and) other industries across the nation and the vast majority of this is in Alberta.”
The current downturn has affected other university graduates such as Jason Milton, a contract worker. He graduated from the University of Calgary’s petroleum land management program in 2014. Milton did contract work at Strategic Oil & Gas LTD. for almost two years.
Now he spends most of his time routinely meeting for coffee with other oil and gas professionals to get employment tips and leads.
“People have told me to give up a long time ago,” said Milton. “There have been five oil and gas professionals out of 100 people who have told me to give up. [I buy] dollars worth of coffee, five bucks of coffee. Every time I meet with someone I just ask for one or two more names to keep the ball rolling.”
“‘Derek, you should look for another job because you won’t have a position here very soon.’ It was a little depressing, to be honest. At that point in time I was quite a positive person.” - Derek Thornton.
These meetings with potential employers give Milton hope that the downturn will turn around, but how long can he wait?
“After I lost my first job, just contracting with Strategic Oil and Gas, I felt that I put all my eggs in one basket and I’m not going to lie to you, I was little bit in the dumps about it, like oh, it’s my luck and poor me, I’ve graduated into these kind of times.”
Milton describes how he got laid off, as he expected his contract to be extended.
“My vice president came into my office and extended my contract. I was on the phone with family setting up celebration dinners because I kept my job for another six months.”
“It wasn’t even two days later when she came back almost in tears into my office and said ‘I am sorry to do this to you, kid, but I jumped the gun on it and we just don’t have the money for it.’ So they had to let me go. I was little bitter at the situation,” said Milton.
Never give up
Milton doesn’t want to give up the fight even though he has been laid off. Luckily, Milton’s land use negotiation skills are also transferable into the real estate industry, he said, and he has been encouraged to explore that option by his girlfriend, who has been a realtor for the past six years.
“It’s really hard to explain to my girlfriend why I go downtown all day, every day and don’t make any money for it. My girlfriend is a realtor so, I’m taking my business degree and I have partnered up with her.”
Milton now works one day a week. He makes a few hundred dollars in land as a contractor, keeping his spirits high while he rides through economic downturn.
Others in the energy field have seen downturns before. Cal Hill, executive vice president of the strategy and regulator division at the Alberta Energy Regulator, witnessed it in the 1980s.
“I think the reality is that the nature of the business it is very cyclical,” said Hill. “Not that history will always repeat itself, but we are producing a resource that is a non-renewable resource. It may change as alternatives come on more. For the immediate future the demand is going to be there. At some point in time I think it is clear that prices will go back and the cycle will turn the other way. It’s just a question of when.”
Hill has been through the downturn in 2009 and said, “My take on the downturn is we have been through downturns in the past this is another one of quite a few.”
“I don’t think anybody can suggest it’s going to take less than another year or two. A year and half will probably be on the optimistic side. So it’s going to take some time to turn around.”
Thumbnail by Zarif Alibhai.