Posted on 04/03/2015 4:55:44 AM PDT by thackney
The petrochemical industry’s struggle to find enough welders, pipefitters and skilled laborers to build the billions in new projects slated for the Gulf Coast is a problem of its own making, the head of a construction education foundation said this week.
Craft laborers require years of training to become minimally qualified and up to a decade or more to acquire the skills that make them top performers, but the industry has failed to consistently invest in developing that workforce, said Don Whyte, president of NCEER, which develops curriculum and assessments for construction and maintenance workers.
“I’ve seen five or six downturns now and it seems like when we hit that downturn we think we can simply slow down or turn off that pipeline and then when the recovery hits, turn that pipeline back on,” he said. “What we’re seeing today in our current labor market is some of the results of trying to constantly turn the pipeline off and turn it back on.”
The industry must stop treating craft laborers as a commodity, said Whyte said in a webinar this week addressing the challenges associated with building multi-billion petrochemical projects on the Gulf Coast.
After years of stagnation, U.S. petrochemical plants are revving up again and expanding as they scramble to take advantage of the vast supplies of cheap gas unleashed by the shale boom.
At the epicenter of the building spree is the Texas Gulf Coast, where major companies including Chevron Phillips Chemical, LyondellBasell and Exxon Mobil Chemical are spending billions on new ethylene crackers, propylene production units and other expansion projects.
In Freeport, Dow Chemical is investing billions to build a new ethylene cracker and new propane dehydrogenation unit, construction projects that are expected to require thousands of construction workers.
“I remember leaders in Dow saying, ‘We’re never going to be building another cracker on the Gulf Coast,’” Jeff Patterson, who oversees site engineering groups at various manufacturing sites for Dow Chemical, said in the webinar. “That whole dynamic has changed.”
But because it has been years since petrochemical companies invested in the United States, the recent flurry of activity caught companies flatfooted, struggling to figure out how to manage the massive new projects and find enough workers to complete the construction.
“A lot of these owner companies have not done major projects in quite a while and they really have lost that capability,” said Manuel Junco, vice president of Houston operations for Jacobs Engineering, said in the webinar. “They struggle significantly to get projects off the ground and properly set up and doing even just the basic things you need to do for a project.”
Some companies, including Dow, have looked for project management expertise from workers outside the United States, bringing in international people who previously worked on mega projects overseas, Patterson said.
“If you come to Freeport and listen to some of the Dow leadership, you hear a lot of Dutch spoken,” he said.
But when it comes to hiring craft workers who will actually build the project, the competition is fierce in the United States. Companies are hiking wages and sweetening benefits packages to lure welders, pipefitters and other skilled laborers, which can lead to more expensive projects and high turnover as workers jump from project to project chasing a higher pay, Whyte said.
The same situation played out during the recoveries from Hurricanes Rita and Karina in 2005, when demand for skilled laborers exceeded supply and some projects saw 600 percent turnover, Whyte said.
“I actually think this future market is going to be worse than that one,” he said. “The one good news in that highly competitive market is when the wages go up, typically what we see is our recruiting greatly improves. So if there is a silver lining, that’s a silver lining on a competitive market.”
Not enough folks who want to do “the dirty jobs” - not when you can get by living off gubbermint benefits and web surfing at Starbucks or Panera all day.
Do used to be an American company. It is now run by globalists.
CONSTRUCTION ON $8B ETHANE COMPLEX TO CREATE 5,000 JOBS
http://www.constructionequipment.com/construction-8b-ethane-complex-create-5000-jobs
Sasol Ltd. is moving forward with an $8.1 billion ethane cracker complex project at its existing manufacturing facility near Lake Charles, La.
That should be DOW used to be American, stupid auto correct.
DEP to hold hearing on air permit for proposed Shell ethane plant
http://powersource.post-gazette.com/powersource/companies-powersource/2015/03/30/Pennsylvania-DEP-to-hold-hearing-on-air-permit-for-proposed-Shell-ethane-cracker-plant/stories/201503300132
The Pennsylvania Department of Environmental Protection will hold a question-and-answer session and a public hearing in May as it prepares to issue a key air quality permit for Shell Chemical Appalachia’s proposed petrochemical complex in Beaver County.
The meeting and hearing are scheduled for May 5 beginning at 6 p.m. at Central Valley High School Auditorium in Monaca.
Shell Chemical, a division of Royal Dutch Shell, is evaluating building an ethane cracker on the site of the former Horsehead Corp.’s zinc smelter. The multibillion dollar facility, if completed, will crack ethane and manufacture polyethylene pellets for use in the plastics industry.
I think its more of a case of a generation that lost those skills when manufacturing went overseas.
And those Dow “globablists” (as you put it) are chosing to invest in US manufacturing and jobs.
Yup, being a welder, pipefitter or heavy equipment operator are now jobs that most Americans are unwilling to do.
Sad. Very sad.
D’oh!
The issue in our area is that those who want an oil and gas job can’t pass the initial drug test to get hired, or they have felonies and/drivers license issues. The companies’ solutions is to import workers from their home states. We have a lot of Texas and Oklahoma plates driving around the Ohio Valley.
If you are going to have a world capital market economy, the first thing you need is the free flow of capital. It also good to have the free flow of goods and labor.
BTW, those damned globalists also own Budweiser.
I’m sure there will be lots of welders, pipe fitters, heavy equipment operators and truck drivers coming up from Mexico. If not, the government will fix the problem, and educate them. Illegals are so far advanced over the rest of us mere American mortals, they can learn with super human speed.
I was thinking the oil fields will have a supply of labor for this.
Of course, these companies want the taxpayers to foot the training bill. Hire people and train ‘em yourselves!
What do these companies expect? They HAD skilled workers, and proceeded to kick them to the curb at the first hint of a downturn.
This isn’t just a petrochemical industry problem. A LOT of industries have this very same problem. The solution so far has been to import more H1-B workers, to the point of displacing the indigenous labor force.
And this will continue as long as companies treat their skilled labor as disposable commodity.
you got your cause and effect bass ackwards.
Right back at ya.
Mike Rowe agrees with me, not you.
The TV host? Please. When we started shipping these jobs overseas in the 70’s and 80’s, it wasn’t because we didn’t have skilled workers. That notion is patently ridiculous.
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