Robots Over Roughnecks: Next Drilling Boom Might Not Add Many Jobs

Tyler Durden's picture

Submitted by Tsvetana Parasova via OilPrice.com,

The inevitable advance of technology and automation has upended industries such as car manufacturing and food processing. Now robotics is making its way into the oil fields by helping drilling activities and putting together heavy pipes.

For companies, more automation would mean higher efficiency, safer operations, and ultimately, lower drilling and production costs. For oil rig workers, it would mean that part of the jobs lost during the oil price downturn would never return. Also, part of the new job openings would require a different type of skill set: for example, information technology and advanced computer skills.

But even if automation is expected to increase, and some day take over drilling sites and drillships, it is not the norm in the oil and gas industry today. While there have been early adopters, the oil and gas drilling business is still years away from becoming an automated activity.

Companies that had been lavishly spending on drilling at oil prices at $100 per barrel were too busy pumping oil and gas to think of efficiency and production costs. But the oil price bust has squeezed their budgets, and the firms are now seeking to cut costs while increasing efficiency.

Apart from reducing the human factor in drilling such as shifts or fatigue, or work-related accidents and incidents, automation can reduce headcount costs.

Automated drilling rigs may be able in the future to reduce the number of persons in a drilling crew by almost 40 percent, from 25 workers to 15 workers, Houston Chronicle’s Jordan Blum writes, quoting industry analysts.

Drilling company Nabors Industries expects that it may be able to reduce the size of the crew at each well site to around 5 people from 20 workers now if more automated drilling rigs are used, Bloomberg’s David Wethe says.

However, a sensitive issue such as workforce in an industry that had slashed a couple of hundred thousand jobs during the downturn has just become even more sensitive with the new U.S. administration.

“The Trump Administration will embrace the shale oil and gas revolution to bring jobs and prosperity to millions of Americans,” President Trump’s America First Energy Plan states.

So companies are likely to keep a low profile on how much staff costs they would be saving.

“They’ll more likely brag about the automation rather than these head counts,” James West, an analyst with investment bank Evercore ISI, told Bloomberg.

Automation is also likely to drive small-sized subcontractors doing jobs for larger companies out of business.

Although it is expected in the not-so-distant future, automated rigs will not be replacing en masse human workforce this year or next. Right now, there are many conventional under-utilized rigs, especially in offshore drilling, where companies had slashed exploration and drilling expenditure.

In land drilling, activity in the U.S. oil patch is picking up, and employment has recently shown the first signs of gains after more than two years of declines.

Total job growth in Texas is expected to rise from 1.6 percent in 2016 to around 2 percent in 2017, Dallas Fed assistant vice president and senior economist Keith Phillips said earlier this month.

“Job growth picked up in the second half of 2016 due to a stabilization of the energy sector,” Phillips noted.

Part of the jobs lost over the past two and a half years may never return due to increased automation, but the recovery of U.S. drilling may send companies hunting again for staff this year.

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D Nyle's picture

its not the drilling that requires people , it the maintenace, oil is hell on everything

Looney's picture

 

I wonder if Robots or Vending Machines can replace politicians…  ;-)

Looney

Arnold's picture

Automation, sensors, and graphic representation came into operations as I was leaving.

It was helpful.

Replacing roughnecks, construction trades, and floor operators, by attrition only.

Kill the Job, kill the Knowledge, kill the trade.

Creative_Destruct's picture

Worked  on rigs back in the 70's. Deck hand, rig hand, derreck hand on big rigs, also doodlebugged, cored for coal , sampled for uranium. Saved enough to put myself through engineering school and two advanced degrees, debt free. Father refused to pay for my schooling."Earn it yourself son." Good kick in the ass. Loved the man.

Not gonna be possible anymore. Most of those jobs ARE automatable ( maintainence IS an exception, to some extent).

Now even less incentives for the snowflakes. Gonna make 'em super-soft and easy targets for the deep AI to take out.

Our fuckin' species is just playing out the string. Living on borrowed time. And these spoiled brats can't even see it coming.

juangrande's picture

Or they do see it coming, so our economic paradigm won't apply too much to them. My nephew has a degree in PE and had a job with Chevron for 2 years. He quit and went back to school to study EE and computer science. He has high interest in interactive education. He's accutely aware of AI and automation. He's 23 yrs. old

Creative_Destruct's picture

Good for him. My son is doing much the same thing. I have degrees in ME, and CE and my son is in Comp Sci and Robotics. My fear is, he and his associates will program the Bots that will eliminate everyone elses jobs first, with their's going last....

 

Mustafa Kemal's picture

Given their past performance, that would be easier than replacing walmart cashiers

U4 eee aaa's picture

It's impossible to make a robot that stupid

boattrash's picture

D Nyle, Exactly! Salt water is hell on Equip as well. I call B.S. on the "40%" estimate, as I believe that number is generated by the people trying to sell the technology to the drilling companies.

dark pools of soros's picture

ok so the meat of this is 10 fucking jobs lost per site..  from 25 to 15... not much of a boom or bust

King Tut's picture

This is going to mean a lot of lost business for meth dealers and tattoo parlors

Yukon Cornholius's picture

Hookers and truck dealerships too.

rejected's picture

I have worked on these riggs.....

I don't think so.

As an aside,,, I have seen many companies "SAVE" themselves out of business.

buckstopshere's picture

Danger, Will Robinson, danger.

williambanzai7's picture

Can we replace State Department wankers with robots?

Soul Glow's picture

The only job we can't replace is the artist.  You're in luck Bonz!

blue51's picture

I wish they would replace a State Dept. Wanker with Tulsi Gabbard . Go Tulsi ! CNN still sucks . https://youtu.be/AQkKln0bNvE
Sorry Off topic.

U4 eee aaa's picture

The only place we don't need efficiency is at the State Department

flaminratzazz's picture

your arms and legs have nothing to do

some machine is doing that for you.

jeffglobal's picture

That's what my girlfriend said about her Rabbit to me.

flaminratzazz's picture

men are being replaced everywhere..

Ever go to this website?

http://www.returnofkings.com/

flaminratzazz's picture

you pick you sons, your daughters too

from the bottom of a long glass tube

desert_mariner's picture

This mechanization [not automation] has been around for 30 plus years...

jeffglobal's picture

Men have been replaced for "laying pipe" with alternative machines by women for years now.  Why should this be any surprise.

flaminratzazz's picture

is it me or does the future look like no fun at all?

Mustafa Kemal's picture

flaminratzazz, no, you are not alone.  It looks like its going to be a continual struggle with the onslaught on our freedoms, privacy, and what little money we have left. Where to find jobs in the future? Friends of mine are trying to find alternatives to sending their kids to college because they think the fortune they will spend will not return in any employment, or worse that they will have to engage the eastern power elite just to be employed.

My father told me "find something you like to do and learn to do it well and things will work out from there". Sorry dad, while it worked for me (very well I might add), I dont think it applies anymore.  

Where to?

Conax's picture

Let the robots buy all those chevvy cruzes.

Soul Glow's picture

There's going to be a new line of work soon:  Robotic maintainence.  Start working to keep the robots in tip top shape today!

flaminratzazz's picture

will robots and ai be able to do that as well?

Dominus Ludificatio's picture

Why bother ,the robots can be replaced with new robots.

Soul Glow's picture

A high quality piece of equipment will always need maintainence.  We're not talking McDonald's robots when it comes to drilling oil.

Mustafa Kemal's picture

There's going to be a new line of work soon:"

 There are going to others also. I can imagine when these operations go automatic it will be easier to sabotage them for the simple reason that you may not have to hurt anyone when you blow shit up. Or you wont have to hurt anyone when you shoot the tires out of a driverless truck.  

 

dogismycopilot's picture

Not happening anytime soon if ever

NoWayJose's picture

It's like self driving cars - great in a controlled environment but unable to handle anything unexpected. And drilling for oil is full of unexpected things.

DieSocialJusticeWankers's picture

Get trained in designing robots, marketing robots, maintaining robots, developing software for robots, selling robots....there are thousands of potential jobs out there....don't get a degree in gender faggot studies.....

perkunas's picture

But the robots are made in China, maintained and developed even the modern software. It's far cheaper to find someone in china. That has a degree in computer's, understands the system, language, and lives near where its manufactured. Especially when they can pay them 4$ a day. The worst thing you can do is get educated wind up with 100,000$ debt and no job.

mo mule's picture

So if Trump puts a 20% tarrif on all Imports, wouldn't you be able to make robots cheaper in the US. It should be enough of a advantage to compete. 

raios_parta's picture

I've worked in the industrial automation industry for 14 years and I can guarantee you that's bulshit. China are way behind on automation. Most are produced in the US or in Germany.

perkunas's picture

I reject the Idea, machines replace workers. This has been going on since the industrial revolution, where they complained machines would displace workers.What has changed is not the technology, but the economics. The 1 percent own everything, this is a return to the feudal system of the middle ages.

desirdavenir's picture

reject it if you want, but 100 years ago, when modernization came to agriculture (fertilizers, tractors,...), population working in agriculture fell from 50% to 10% in a few decades. the missing 40% went to work in industry. Now where will industry workers will go to work ? Restaurants & hotels ? 

perkunas's picture

Your missing the point, you think the pie is only so big, bake a bigger pie. There is no end to greed, people always want more, there are places where they have nothing. What has changed is the wealth distribution. People simply have no money to buy anything.When the 1 percent own 98 percent of everything, that wealth no longer flows.

Jack's Raging Bile Duct's picture

Thank you. An uncommon insight on Zerohedge these days. The problem isn't automation, it's the distribution of wealth. That problem exists, because our monetary system is built to advantage those who control it.

Yukon Cornholius's picture

Jobs will be moving into home care for the elderly, and there are always vacancies for big pharma pin cushsions.

flaminratzazz's picture

how long until organized crime use robots for home invasions?

baldknobber's picture

I heard a report the other day that said the biggest future growth in the law field would be lawyers for robots. If they pinch a robot for stealing cars can they go into his hard drive and turn him into a rat or do they have to call his lawyer?   Questions for the future

NoWayJose's picture

And I guess they are also working on robotic sex dolls to replace the prostitutes hanging out in hotel rooms near the oil fields!