Thank you very much, and thank you for the invitation to speak before this committee. I appreciate the time you've taken to listen to the issues and concerns of the oil and gas services sector in addressing our existing labour shortages.
My name is Mark Salkeld. As mentioned, I am the president and CEO of the Petroleum Services Association of Canada. The Petroleum Services Association is the national trade association representing the service, supply, and manufacturing sectors within the upstream petroleum industry. The Petroleum Services Association represents a diverse range of 260 member companies, which employ more than 65,000 people contracting almost exclusively to oil and gas exploration and production companies.
The energy services sector plays a significant role in industry, from the front-line in-field services to high-tech jobs such as online and real-time directional drilling jobs based in corporate offices. Our sector is becoming increasingly important, with the technology development and innovation taking place in our industry. The service sector and operators are collaborating on research and development that is resulting in game-changing technologies that are driving the continuous improvement in our operational and environmental performance.
According to the recent report of the Senate Standing Committee on Energy, the Environment and Natural Resources, current measurement of R and D activity does not fully capture an estimated additional $1 billion spent annually by energy companies in their labs and in-field experiments. Very often, oil and gas wells become the labs' on-the-job training.
Our industry is growing. However, this growth is being met with certain constraints, and the shortage of skilled workers is the single largest issue we face today. The upstream petroleum services sector is already experiencing a skilled labour shortage, which is expected to become even more severe over the next decade. Hiring requirements for the service sector alone are projected to be more than 5,000 new workers by 2015.
There are a few key challenges that are contributing to the workforce shortages. First are the changes in the traditional labour pool from which many workers would come to work in the energy services sector. In the past, for instance, the service sector was somewhat reliant on the agricultural industry, farmers in particular, individuals who are for the most part mechanically inclined, with skill sets easily transferrable and suited to the energy services. Their slow period during winter is our busy period, so it was a natural transition for many years. Changing demographics have caused this pool of workers to shrink, and so too is the changing nature of the work being performed by the service, supply, and manufacturing sector.
This leads to a second key challenge: the nature of the work. The type of work performed in the field by many of our member organizations is physically demanding, usually performed in remote locations over extended periods of time and in extreme weather conditions. As well, workers can be away from their homes and families for weeks at a time. The pool of potential workers willing to accept these conditions is becoming smaller.
Thirdly, not only is willingness lacking, but there is increasing competition for labour from within our industry and other Canadian industries, as they too are faced with increased labour shortages. Within our own borders, there is increasing cross-country competition.