Labor myth busted at World Petrochemical Conference
Since I became involved with Shale Crescent USA almost two years ago and began talking about bringing manufacturing jobs back to the MOV the issue of higher labor cost and availability here compared to the U.S. Gulf Coast always came up. Last year at the World Petrochemical Conference (WPC) when we talked to companies about expanding here one of their excuses was labor and construction costs were much higher than the Gulf Coast. This was opinion. We rarely heard hard facts. It may have been true at some point but was it still the case?
With 11 Gulf Coast crackers planned or under construction, demand for labor on the Gulf is up. Increased demand typically raises prices not just for labor but materials also. Hurricane Harvey hit last summer with its destruction. The petrochemical industry was hit hard, creating more demand for labor and materials.
When I talk to local folks in the construction trades I hear a different story. Local labor leaders told me that labor rates here may be slightly higher than the Gulf but they believe that their people are much better trained and make up for the increased cost with improved safety and efficiency. I have toured their training facilities and was impressed by the quality of the facilities and the number of hours of training it takes to go from apprentice to a journeyman who is skilled at the trade. In our region typically apprentices make up 10- 20 percent of the workforce. This number can easily be increased as demand for skilled labor grows. From discussions, I had when in Texas, I learned that the Gulf Coast is already stretched thin, with apprentices making up over half of the work force. My nephew in Houston who manages construction projects verified this.
At the WPC last month in Houston Joe Thompson, Senior VP of Bechtel who is building the Shell plant in Monaca, Pa., spoke on the main stage. Bechtel is a very large global construction firm. Joe travels the world for Bechtel. He has seen a lot and is not easily impressed. Joe said, “The work force there (Monaca) is a very safe workforce, productive and intelligent force.” “A high percentage have associate and BS degrees. This is a different (better) workforce than you may be used to working with.” Joe specifically mentioned how impressed he was with the workforce training facilities and the programs that move an individual from apprentice to journeyman. He also said, “Skilled crafts and trades are readily available.”
Joe stressed the importance of wage certainty on a large multiyear project like the Shell Cracker. He added, “There is more wage certainty here (Shale Crescent) than most places in the country.” All of this translates into improved efficiency. Improvements in efficiency result in big savings on a multibillion dollar project. When I reviewed his video from the conference it was easy for me to see how thrilled and impressed he was by the skilled labor in our region.
This shouldn’t surprise those of us who grew up here. We have a history of manufacturing, petrochemicals and construction. My grandfather, uncles and cousins were all steelworkers.
My brothers are in construction and I can’t drive a nail straight. The modern petrochemical industry started here.
The first cracker was built by Union Carbide at Clendenin, W.Va., in the 1920s. We still have a lot of work to do to train our workforce for the coming growth. We can accomplish that. The training facilities are in place. One of our challenges is to encourage our young people to enter the building trades or consider a two-year associate degree from one of our many fine community colleges. These programs are looking for students.
I spoke this past week at the Coatings and Corrosion Expo in Weston. I ran into one of my former students who graduated from Pierpont Community and Technical College in Fairmont. He is a new graduate earning $50,000+. I asked him jokingly if he could afford to pay back his college debt. He laughed, “What debt?” He will be taking on some debt when he buys his new pickup truck.
When we hear one of these myths about our local workforce, we all have a responsibility to set the record straight like I did for my nephew in Houston. He now knows that when he does a project in the Shale Crescent USA Region he will have a world class workforce at a fair and certain wage. We still have work to do to prepare for future expansions here. We all need to know that we are starting from a very good place. Thoughts to ponder.
Greg Kozera is the Director of Marketing for Shale Crescent USA shalecrescentusa.com. He has over 40 years of experience in the energy industry. Greg is a leadership expert with a Masters in Environmental Engineering and the author of four books and numerous published articles.