A recent survey conducted by Evercore ISI showed that many laid off mechanics and roustabouts have found work in other industries and may not return to the oil and gas sector even if the industry recovers.
That is potentially a large problem for energy companies desiring to ramp up production if oil prices continue to rise.
New York investment bank Goldman Sachs projected that the number of active drilling rigs could double by the end of next year, but oil companies may not be able to find enough workers to operate them.
“Labor constraints will be an ongoing bottleneck that will slow and prolong the North American recovery,” said James West, an oil field analyst at Evercore.
Nearly 150,000 U.S. energy workers were laid off in the wake of the two-year oil bust. Evercore’s survey revealed almost 80 percent of the former oil and gas workers are now employed in sectors such as construction, engineering consulting, chemicals and retail.
“The result is a massive age and experience disparity between retirement-ready individuals and the recurring waves of ‘green hat’ new hires,” said West.
“The real reason service companies are worried right now is that when that occurs,” said Chad Hesters, director of Houston’s Korn Ferry. “It makes every project that they’re working on dramatically more expensive.”