SHARE

A coming wave of automation in the oil industry could help boost efficiency while improving safety but could slow job growth rates.

According to data analysis conducted by Bloomberg, automation in the drilling sector could permanently eliminate as many as half of the 440,000 jobs that have been cut since oil prices began falling in late 2014.

The promise of automation could run-up against plans proposed by President Donald Trump to boost energy related jobs.

Shortly after taking office, Trump said he plans to “cancel job-killing restrictions on the production of American energy,” including regulations governing shale oil and gas production as well as coal mining.

Trump said reducing regulations will create “many millions of high paying jobs” in the energy sector.

USB analyst Angie Sedita told Bloomberg that rig efficiency gains now allow shale rigs to operate with half as many workers without any production losses.

U.S. rig counts have fallen from a high of 1,930 in October 2014 to just 694 rigs last week.
Despite the rig count rout, U.S. oil production has held relatively steady thanks to efficiency gains in the shale sector and growing offshore production.

The U.S. Energy Information Administration (EIA) said earlier this month that U.S. oil production is expected to continue climbing into 2018.

The EIA is now forecasting U.S. crude production to average 9 million bpd in 2017, up from a previous estimate of 8.7 million bpd.

The agency expects U.S. crude production to climb to 9.3 million bpd in 2018.

An annual rig census conduction by National Oilwell Varco (NOV) found that the “precipitous drop in drilling activity” over the last two years has caused “thousands of rigs to be sidelined since the end of 2014.”

NOV added that it is possible that “a large portion of these displaced units will not return to service, facing competition from newer, more capable rigs.”

Automation and new technologies are also expected to impact the upstream process outside of drilling operations.

BP’s head of upstream technology Ahmed Hashmi told Bloomberg that the “biggest thing will be the systems” that are upstream of the rig moving forward.