OIL AND GAS INDUSTRY WORKFORCE CHARACTERISTICS AND IMPLICATIONS

Nancy HodurDean Bangsund

Presented to:Oil and Gas Research CouncilFebruary 19, 2016Bismarck, North Dakota

Oil and Gas Industry Workforce: Objectives• Gain insights on the characteristic, perceptions and

intentions of the oil and gas workforce.

• Different characteristics than historic workforce.

• Important to understand workforce intentions and motivations regardless of current market conditions.

• Findings valuable for understanding current and future needs for housing, delivery of public and private goods and services

Workforce Survey Methodology

Stake holder interviews

Online workforce survey

Focus groups

Slowdown presented challenges

Stakeholder Interviews• Conducted 46 personal interview in 2014 • Instrumental in developing the survey instrument and

identifying key issues• Second round of interviews (additional 22) done in 2015• Many issues identified in 2014 remained in 2015, • Industry focus changed dramatically

• Housing costs• Labor Issues, turnover and poaching• Concerns regarding QoL• Prevalence of rotational schedules and non-resident workforce• Employer provided housing and housing subsidies• Industry focused on costs and improving efficiencies• Voluntary attrition as a result of cut backs• Many workers just returned home

Focus Groups• Dickinson, Ray, Watford City and Killdeer

• Findings not generalizable to the larger population

• Sampling of themes• Schools viewed positively• Like small town feel• Some staying long term others not• Communities generally viewed positively• Lack QoL amenities and public services, but progress has been made• Addition of police presence was viewed very positively• Some new residents were made to feel welcome others said they were

treated like outsiders…two worlds

Workforce Survey• Online questionnaire• Enlisted the participation of oil and gas industry firms• Cross section of firms that provided various oil and gas

industry activities• Employers sent an email to their employees with link to

the survey• Considered various methods for reaching workforce

before settling on the online questionnaire• Mail survey• Phone using cell phone billing towers• Intercept surveys• Safety meetings

Workforce Survey• 15 firms representing ~8,100 employees• ~1,668 Observations

40%

60%

Actual Distribution

Elsewhere

NorthDakota

30%

70%

Sample Distribution

Elsewhere

NorthDakota

What best describes your job?

Description of Job Observations PercentField operations, less than 2 years experience 136 8%

Field operations, 2 or more years of experience 481 29%Infrastructure construction such as roads, pipelines, municipal services, rail 13 1%

Trucking, transportation 181 11%Professional such as engineering, accounting, management, geology 394 24%

Office, clerical, administrative or support staff 260 16%Field operations support such as mechanic or equipment maintenance 195 12%

Other 8 0.5%

Total 1,668 100%

Able to generalize

findings to the larger population

What best describes the activities or services related to your job?

Industry Activity Response PercentProduction and operations, including well maintenance and transportation 663 40.0%

Fracing and well completion services 582 35.0%

Drilling, well site preparations, geophysical services 311 19.0%

Other 244 15.0%

Rail and pipeline operations, gas and oil shipments 164 10.0%Infrastructure construction, such as roads, pipelines, municipal services, rail 148 9.0%

Natural gas processing 83 5.0%

Total (2,195) 100.0%

Able to make comparisons by industry

activity.

Job Description by Residency

05

101520253035404550

Perc

ent

Job Description

North DakotaElsewhere

Activities and Service Related to Job Description

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Development Activities Production Activities

Perc

ent

Activites and Services

North DakotaElsewhere

Key take away points• Non-residents workers:

• more frequently have job descriptions related to field operations and trucking and transportation

• more frequently have job descriptions related to development activities

• Residents workers• more frequently hold professional, managerial and administrative

support positions (slightly over represented in the sample)• equal percentage of workers have job descriptions related to

development activities as production activities

Housing

020406080

Ownedhousing Rented

housing Employerprovidedhousing

61.2

29.4

6.3

3.931.3

54.8

Perc

ent

Type of Housing

Type of Housing Used While Working in North Dakota, by Residency

North Dakota

Elsewhere

North Dakota : n=1,158Elsewhere: n=489

Does not sum to 100 percent because ‘other’ not included.

Type of Housing Provided by Employer, by Residency

0

50

100

Alltemporaryhousing:hotels,crew

camps,RVs

mobile

Apartment,condo or

townhouse

Singlefamily

housing

Jobsite/on-site

housing

Other1

Perc

enta

ge

North Dakota

ElsewhereNorth Dakota: n = 73Elsewhere: n = 267

0

20

40

60

80

Live alone Live withfamily

member,significant

other,boyfriend or

girlfriend

Co-workers,roommates,

or crewcamps,

dormitories

Other

15.7

71.4

11.21.6

32.5

10.8

50.5

6.1

Perc

ent

Living Arrangements While Working in North Dakota, by Residency

North Dakota

Elsewhere(n = 1,158)

(n = 489)

Key take away points• Resident workers overwhelming live in single family homes that

they own.

• Residents that live in employer provided housing most frequently live in an apartment.

• Non-resident workers more frequently live in employer provided housing which is most frequently some sort of temporary housing.

• The non-resident workforce predominately lives alone.

• Generally satisfied with the type and condition of housing, but less so with the price (data not shown)

Non-residents: Would you like to move to North Dakota?

19%81% Yes

No

n= 486

NO

YES

1.86

1.73

1.86

2.49

1.62

2.03

2.32

2.97

1.91

3.59

1.58

1.64

1.87

1.9

2.02

2.2

2.36

2.57

2.72

3.07

Public schools and essential child care servicessuch as day care are inadequate or unavailable…

North Dakota is not a good place to raise a family.

My employer could transfer me to another location.

The type of housing I want is not available.

Climate is too extreme, too cold.

Lack of social opportunities, no social life

Lack of lifestyle amenities

I don't want to purchase a home because I amafraid the value will drop in the future.

My spouse and family do not want to move awayfrom friends and family.

Housing is too expensive.

Average Score 1

Factors That Influence Respondents That Live Elsewhere Decision to Move to North Dakota

Do NotWant toMove toND

Want toMove toND

1Average score where 1 is no influence, 2 is some influence, 3 is considerable influence, 4 is totally influences.(n = 378)

Key take away points• Housing cost and price risk were most frequently cited as

a significant influence for those that want to move to North Dakota.

• Housing cost also influences those that that do not want to move to North Dakota, but moving away from friends and family was more frequently cited as the factor that has considerable influence.

• The weather or perceptions that ND lacks good schools, or quality of life amenities are much less of a consideration both groups. This is especially relevant for those that would like to move.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

1 - 5dayson

6 - 10dayson

11-14

dayson

14 -21

dayson

morethan21

days

1 - 5dayson

6 - 10dayson

11-14

dayson

14 -21

dayson

morethan21

days

North Dakota Elsewhere

Number of Days "On" by Residency

(n = 1,132) (n = 466)

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

1 - 2daysoff

3 - 5daysoff

6 -10daysoff

11 - 21daysoff

1 - 2daysoff

3 - 5daysoff

6 -10daysoff

11 - 21daysoff

North Dakota Elsewhere

Number of Days "Off" by Residency

(n = 1,107) (n = 466)

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

8hours

orless

9 - 10hours

11-12hours

13-16hours

17-24hours

8hours

orless

9 - 10hours 11-12

hours 13-16hours 17-24

hoursNorth Dakota

Elsewhere

26.1%

32.2%

25.8%

12.3%

3.6%7.6%

12.3%

31.7%36.4%

12.1%

Hours and Residency

Hours per Shift, by Residency

(n = 1,090)

(n = 473)

58.3%

19.9%

Key take away points• Non-resident workers have longer work periods ‘on’ and

‘off’ and work longer shifts than workers that live in North Dakota

• Longer work periods ‘on’ and ‘off’ enable non-resident workers to return home

• That pattern is consistent across all job descriptions (data not shown)

• That pattern is also consistent across industry activities, both development activities and production and operations activities (data not shown)

0%

10%

20%

30%

40%

50%

60%

Would like to move to ND Do not want to move to ND

Do not live in North Dakota

35.1%

51.8%

31.9%

14.0%13.8% 15.8%12.8% 12.5%

5.3% 4.8%0.0% 1.0%1.1% 0.0%

Job Description of Respondents That Do Not Live in North Dakota and Their Intensions to

Move to North Dakota

field operations trucking, transportationfield operations support professional servicesoffice, clerical infrastructure construction

(n = 392)(n = 94)

0%

10%

20%

30%

40%

50%

60%

70%

Would like to move toND

Do not want to moveto ND

Respondents that do not live in North Dakota

43.2%

67.6%

37.0%

21.2%19.8%

11.2%

Industry Activity, of Respondent That Do Not Live in North Dakota, by Intentions to Move to North Dakota

Development activitesonly

Production/operationsactivities only

Both development andproduction/operationsactivities

(n = 349)(n = 81)

0%

10%

20%

30%

40%

50%

60%

Would like to moveto ND

Do not want tomove to ND

Respondent that do not live in NorthDakota

5.3% 3.3%

40.4%

29.1%

43.6%

57.7%

10.6% 9.9%

Type of Housing Respondents That Do Not Live in North Dakota Use While Working in North Dakota and

Intentions to Move to North Dakota

OwnRentEmployer providedOther

(n = 349)(n = 81)

0%

10%

20%

30%

40%

50%

60%

Want to move to ND Do not want to move to ND

Respondent That Do Not Live in North Dakota

29.3%

57.5%

34.1%

15.5%

24.4%

7.1%

0.0%

7.5%4.9%

7.5%

2.4% 1.8%2.4%0.4%

2.4% 2.7%

Type of Employer Provided Housing, Respondents That Do Not Live in North Dakota and Their Intension

to Move to North Dakota

Crew Camp Apartment RV, Camper, MobilJob site housing Condo, Townhome Hotel

(n = 226)(n = 41)

Effects of Industry Slowdown—Results Interpreted with Caution

0%10%20%30%40%50%60%70%80%90%

Before 02-01-2015 After 02-01-2015

Respondents That Do Not Want to Live in North Dakota

31.1%

13.2%

68.9%

86.8%

Respondents' Residency and Time Period Questionnaire Was Completed

Respondents That Do Not Live in North Dakota Intentions to Move to North Dakota, by Time Period When

Questionnaire Was Completed

Want to moveto ND

Do not want tomove to ND

Effects of Industry Slowdown—Results Interpreted with Caution• Small sample size for non-resident workers that want to

move to North Dakota

• Could be other factors that influence decision• Improving economy elsewhere• Personal considerations• No controls for motivations

• Appears that change in intentions coincided with downturn in economic conditions

Conclusions• There are two distinct workforces present in the oil and

gas industry.• They utilize different types of housing and have different

characteristics.• They have different work patterns, work longer periods on

and off and work longer shifts. Live alone or in camps or with roommates

• The non-resident workforce is more concentrated in development activities than production and operations activities

• A majority of the non-resident workforce has no intentions of moving to ND

• Study struck a cord with respondents…30 pages of ‘other comments’

We have a much larger workforce

200,000

250,000

300,000

350,000

400,000

450,000

500,000

All EmploymentPrivate and Public Sector

Source: Quarterly Census of Employment and Workforce, 2014

Know these job are not all held by ND residents

Average annual change from 1990-2008 = 4,900 jobsAverage annual change from 2008-2014 = 15,000 jobs

An example for illustrative purposes.

Hypothetical reduction in workforce

10 % 20 % 30 %Oil & gas workers added since 2008 (2014 QCEW data) 57,890 52,101 46,312 36,470Non-resident workforce x 40% x 40% x 40% x 40%Do not want to move to ND x 80% x 80% x 80% x 80%Potential non-resident workforce present in ND 18,524 16,672 14,819 11,670

Implications for Workforce Issues• We have two distinct workforces in the oil and gas industry with different

characteristics that demand a different mix of housing and goods and services. Spending patterns will be different.

• Long term presence of a commuting workforce is likely.

• We could see surges of non-resident workers that correlate with development activities due to concentration of non-resident workforce with jobs related to development activities.

• There may be continued demand for some temporary housing.

• May see greater prevalence of apartments compared to historic housing mix.

• Issues that prevent workers from moving to North Dakota can be addressed, such as price and price risk. Weather and inaccurate perceptions not significant considerations.

What’s next• Findings are being used to update and create a new model to

project employment and population based on various price scenarios.

• Need for further study• Do not have a good understanding of the commuting

workforce.• A substantial portion of the workforce does not live where they

work• Implications of a very different workforce not well understood• Findings will be used as input to other efforts

• Other responses• Employment, housing and population projection scenarios• Other analysis

Questions? Contact Information:

• Nancy Hodur: nancy.hodur@ndsu.edu or 701-231-7357

• Dean Bangsund:d.bangsund@ndsu.edu or 701-231-7471