In the early 2000s, Brandon Sandmaier worked as a heavy-duty mechanic in Canada’s tar sands, the world’s largest industrial project, located in northern Alberta. He built pipelines and repaired 400-ton trucks that haul thick, oily bitumen through the open-pit mines. But after more than 10 years in the oil and gas industry, Sandmaier went back to school to study alternative energy in 2014. He knew he wanted to eventually start his own business and he saw potential for growth in solar. He now manages operations for a solar energy company that he cofounded, Generate Energy Ltd., in Sherwood Park, Alberta.
Jake Kubiski was working as an electrician in Alberta’s oil industry when he went on vacation to Costa Rica in 2015 and saw how renewable energy was booming there. Returning home, he decided to start a clean energy business in Alberta, where the industry was still nascent. Now the owner and CEO of Kuby Renewable Energy, an Edmonton-based solar contractor, he has hired about 10 staff with work experience in the fossil fuel industry. “Alberta oil and gas field employees are extremely well-trained,” he says.
Sandmaier and Kubiski’s businesses are part of a growing renewable energy sector in Alberta — unlikely shoots of life in a province that has been described as a petrostate. For decades, Alberta’s economy was dominated by the exploitation of viscous bitumen in its vast tar sands, which hold the world’s third-largest oil reserves behind Saudi Arabia and Venezuela. But since oil prices crashed in 2014, about 35,000 jobs in Alberta’s tar sands have been lost, likely for good. Now, the Canadian oil industry is being hit even harder due to imploding global demand and plummeting prices for oil caused by the coronavirus pandemic. Some companies are scaling back tar sands operations, and others are even pulling away from oil sands investment in response to growing pressure to meet climate goals.
“The transition is going to occur — I think it’s coming faster that most people think,” says one union official.
As Alberta’s oil and gas industry comes to grips with a long-lasting downturn, workers in the oil industry are beginning to look to the renewable energy sector to make up for the jobs being shed in the tar sands. A handful of nonprofit and economic development agencies are starting retraining programs to prepare former oilfield hands to work in solar and wind power. “Most of the workers that reach out to us have been through boom-bust cycles once, twice, three times,” says Andrea Visser, director of operations and administration at Iron & Earth, a nonprofit started in 2015 by oil sands workers to integrate more renewable energy into Alberta’s economy and to help develop retraining programs for former tar sands workers.
Sandmaier says more oil workers are reaching out to him to explore working in renewables. “If presented with an opportunity,” he says, “they would take it.”
Rod Wood, national representative for the labor union, Unifor, which represents many oil and gas workers in Alberta, says that although there are a few forward-looking people in the energy industry, many remain resistant to change. But he says that as the tar sands industry continues to be buffeted and as the fight to slow climate change gathers momentum, an energy transition is inevitable. “The transition is going to occur,” says Wood, whether Albertans are ready for it or not. “I think it’s coming faster that most people think.”
Around 10 percent of Alberta’s electricity generation currently comes from renewable energy sources, according to the Canada Energy Regulator. However, renewables are growing fast: From 2005 to 2018, Alberta’s installed renewable electricity capacity nearly doubled, from 1,484 megawatts to 2,825 megawatts. More than 1,300 megawatts of renewable energy projects are now under construction in the province.
The Alberta government says that 8,100 people in the province work as solar installers and 3,200 people as wind turbine technicians. By one estimate, direct and indirect employment in Alberta’s renewable energy sector totals 26,000 jobs, and two consulting firms, Solas Energy Consulting and the Delphi Group, forecast that as many as 20,000 new jobs may be created in Alberta’s renewable energy sector by 2030. As of 2018, Alberta’s oil and gas industry employed 153,000 people, a number that has likely declined since then.
Programs to retrain oil and gas workers are getting underway, albeit slowly. A non-profit corporation, Calgary Economic Development, recently started a U.S. $1.1 million program to transition unemployed oil and gas professionals to jobs in digital technology, such as software development and programming, which can be used in a variety of energy industries. And Iron & Earth is rolling out three programs to train oil and gas workers in solar and wind energy later this year. The group has so far trained 30 people for the solar sector and provided information about job opportunities to hundreds of fossil fuel workers seeking to switch to employment in renewable energy.
Oil has long been the lifeblood of Alberta’s economy. In 2018, the oil sands produced 2.9 million barrels per day, about two-thirds of Canada’s total production. In the early 2000s, people from across the country flocked to Fort McMurray, the epicenter of the oil sands boom, to make six-figure salaries. Tar sands companies could not find enough workers. Then, oil prices crashed in 2014 and stayed low, in part because of the fracking boom south of the border in the United States. More than 53,000 oil industry jobs were lost in Canada between 2014 and 2019, many of them in Alberta, according to a recent report by the Parkland Institute, a research center at the University of Alberta in Edmonton.
Those jobs are likely not coming back, according to Ian Hussey, research manager at the Parkland Institute, who wrote the report. Facing tighter budgets, oil companies have changed the way they operate to reduce costs. Suncor, an oil sands mining company, eliminated all drivers that operate massive haul trucks in one of its mines in 2018 and replaced them with driverless trucks. The company is now replicating that model at its other mines and is expecting to cut 400 drivers by 2023. Higher production and investment no longer equate to more jobs. “Those trends have really decoupled over the last five years,” says Hussey. During that period, while oil sands production increased by 23 percent, jobs declined by the same amount.
Major financial institutions have shifted away from investing in the tar sands due to their climate impacts.
As pressure grows to reduce greenhouse gas emissions, forces from outside Alberta are also threatening the oil sands, whose thick bitumen requires an extraction and refining process that produces more greenhouse gases than conventional oil. In recent months, major financial institutions — from Sweden’s central bank to the world’s largest asset manager, Blackrock — have shifted away from investing in Alberta’s fossil fuel industry due to its climate impacts. And in February, Teck Resources, a mining company, withdrew an application to develop a U.S. $15.5-billion oil sands project that had been nine years in the making. The company’s CEO wrote that the proposed mine had “surfaced a broader debate over climate change and Canada’s role in addressing it.”
The global economic recession created by the coronavirus has further darkened the outlook for the tar sands industry. As companies slash their spending and delay projects, Alberta’s oil and gas sector is seeing hundreds of layoffs and thousands of jobs put on hold.
While the majority of oil workers are not eager to switch careers, many see the writing on the wall. “There’s a recognition that they work in an industry that’s part of the problem,” says Jamie Kirkpatrick, program manager at Blue Green Canada, an alliance among labor unions, environmental groups, and civil society organizations that advocates for working people and the environment. However, he says, switching to other sectors can be unappealing since it often means taking a sizeable pay cut.
While acknowledging the contribution of fossil fuels to people’s livelihoods, Iron & Earth is heading campaigns asking for federal and provincial government support to retrain fossil fuel workers and create more jobs in renewable energy. More than 5,000 people have signed the organization’s pledge to “stand with fossil fuel workers calling for training in renewable energy.” Iron & Earth has already retrained a small number of fossil fuel workers and members of the Louis Bull Tribe, a Cree nation near Edmonton. Iron & Earth plans to roll out three more training programs in the solar and wind sectors in Alberta in August. By 2025, the organization’s goal is to bring training programs to 70 communities and 1,000 workers across Canada.
The Calgary Economic Development project is aimed at transitioning displaced oil and gas professionals, such as engineers and geoscientists, into the technology sector. The federally funded project is focused on Calgary, a hub for major oil companies that has been hit hard by the oil downturn. The program, which offers six months of free training, accepted 50 students in its first round, although 500 people applied. Another 50 students will take part in a second round of training scheduled later this year. Given the number of oil and gas workers sitting idle and the demand for jobs in the technology sector, thousands of people should be trained, says Mary Moran, president and CEO of Calgary Economic Development.
The previous left-of-center Alberta government bolstered clean-energy growth by pledging to generate 30 percent of the province’s electricity from renewables by 2030. The province provided incentives to homeowners and businesses for solar installation and held three auctions for renewable power projects in 2017 and 2018, leading to the ongoing construction of 1,360 megawatts of renewable energy capacity.
However, the current conservative government scrapped these programs when it came to power last year. Estimates now are that by 2030 renewables are likely to provide 19 percent of the province’s electricity, doubling current generation, according to one forecast.
The recovery period that follows the oil industry swoon could be an opportunity to pivot to a new energy future.
Market forces are increasingly driving renewables growth in the province. Several major projects have secured funding from private investors despite the lack of support by the provincial government. A 400-megawatt solar project, the largest in the country, received $500 million in backing from a Danish investment group earlier this year, and a North American energy company, TC Energy, agreed to buy more than half of the electricity generated by a 130-megawatt solar project currently under construction in southern Alberta. Across Canada, jobs in the clean energy sector are set to grow faster than in oil and gas, according to a 2019 report by Clean Energy Canada.
The recovery period that follows the current coronavirus-related swoon in the oil industry could be an opportunity to pivot to a new energy future in Alberta, Wood, the labor official, says. In March, the federal government said it was preparing a multibillion-dollar bailout for the struggling oil and gas industry. In response, 256 academics across Canada signed a letter to Prime Minister Justin Trudeau urging the government to “support an economic recovery plan that encompasses a green transition.” Trudeau recently announced that the bailout would include U.S. $536 million for investments that reduce greenhouse gas emissions. Wood sees the support as a positive step, but says workers will need a lot more help going forward as demand for Alberta’s oil declines.
For now, oil is still king. Less than two miles from Sandmaier’s solar company, refineries continue to process more than 300,000 barrels a day. “We cannot just continue to prop up [the fossil fuel] industry,” he says. “We have to look at what industries do have hope.”