Shale and the UK Skills Force: How Will We Cope?

It is still not certain how big the UK shale market will be, but we must be ready to meet the demand for skills as and when it arises, suggests Mike Thornhill, exploration and production manager - oil and gas, Spencer Ogden.

Changes in supply and demand in the energy skills market have been big news in recent years. There has been concern over the growing skills gap in established markets such as conventional oil and gas - particularly in middle management. In these mature markets, we can predict with some accuracy the development of skills demand, and take pre-emptive action accordingly. The shale market is still embryonic, however, and we therefore cannot accurately anticipate how the UK will fare. What we can do is monitor local developments and test site successes while looking to more established markets for clues as to how we might meet skills needs in the UK.

Shale right now

Shale is hot news, and the story develops daily in the national and trade media. In early spring the government announced plans to incentivise communities to make the prospect of fracking in their areas more appealing. In May an industry roundtable hosted by Spencer Ogden led to national controversy over flaring in Sussex, and in June the feasibility of British shale projects was up for debate. Most recently, The British Geological Survey (BGS) and DECC reported on estimated shale gas resources in central Britain: 1,329 trillion cubic feet (tcf). With the UK using approximately 3 tcf per year, this number hints at the value in shale development. But BGS is wary of being over-optimistic, reminding us that it's much harder to predict how much gas can actually be extracted.

Planning for the future

So where are the markets that might give us an indication of what's in store for the UK? Two examples on opposite ends of the scale are the USA and Poland.

The most obvious is the USA, the great shale success story. In 2000 shale made up just 1.6 per cent of the country's natural gas production, but by 2010 the figure stood at 23.1 per cent, with 600,000 workers employed. This was thanks in part to its laws on land ownership. Developments in the US have taken place largely on private land, giving owners and companies a decent return on investment. In the UK, however, the underlying rocks belong to the Crown Estate, and this makes it a more complicated - and less lucrative - prospect for developers.

The story has been very different in Poland, where success has been elusive. Predictions of 500 wells drilled in a year fell through, with only 33 test wells drilled since 2010 - and only five of them horizontally fracked. Taxation and licensing issues were compounded by poor test well results. The upshot? The market stalled.

This Polish spectre hangs over the industry, with emerging shale markets fearful of a similar fate. The expected fracking boom came not with a bang but a whimper. As tests proceed in the UK, production will remain until it is proven to be sustainable and profitable - only then will the skills market be faced with a boom.

Transferable skills

Even in the face of uncertainty about the future of the UK shale market, we must prepare to meet its potential skills demands, which may amount to 74,000 jobs.

But where will we find these workers? There aren't enough existing shale experts in the UK, and we can’t source them from abroad as the sector is still too small. We do, however, have a ready supply of skilled conventional oil and gas workers, particularly in the North Sea. However, while many will no doubt be drafted from this pool, we must remember that it is already experiencing a skills shortage of its own - PwC recently referred to this as an "emerging talent and recruitment crisis".

These workers will need cross-training, as some of the methods used in UK fracking will be new to them. There are thousands of American contractors that might be paid to come here to help us skill up our local workforce. Initiatives like this, as well as government-sponsored training programmes, could help to equip workers new to the sector with the skills they need.

In conclusion

There are many variables and unknowns which will dictate the success - or otherwise - of UK shale. Right now, we don’t even know how much of an appetite there will be for drilling projects, or how quickly developments will proceed. More than 170 licenses for onshore oil and gas exploration have been issued in the UK, but these must materialise before shale's potential can be explored. For now we can learn from existing markets, monitor the work of companies like Caudrilla and IGas, and prepare for skills demand as it develops. We are lucky to have a wealth of expertise in conventional oil and gas. These workers, with their valuable transferable skills, are at a premium - and we have some of the best in the world. 

Mike Thirnhill, Exploration and Production Manager - Oil and Gas, Spencer Ogden