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Rand Report Finds Appalachian Energy Workforce Development Progressing

The first analysis of an initiative launched in 2014 with the backing of Chevron Corp. to address the shortage of workers expected in the Appalachian region’s energy and advanced manufacturing industries found that while progress has been made, there’s still much work to be done.

Ohio, Pennsylvania and West Virginia are all staring down a gap when it comes to workers with science, technology, engineering and math (STEM) skills over the next decade, especially as natural gas production in the Marcellus and Utica shales has matured and is opening the door to more downstream opportunities. A network of partner organizations in the business, nonprofit, research and education sectors joined forces three years ago to address the limitations, forming the Appalachia Partnership Initiative (API).

Think-tank Rand Corp. is serving as API’s independent evaluation and monitoring lead. In one of its first analyses since the program was launched, Rand found the API is serving as a “key partner” in a “vibrant tri-state STEM-supportive ecosystem” that is receiving help from supportive government, industry and education partners.

As oil and natural gas prices continue to recover, Rand acknowledged that more workers would be needed over both the medium- and long-term if the area is expected to truly capture the energy sectors’ benefits. Middle-skilled positions, defined by the think-tank as those typically requiring a high school education and some additional postsecondary training, are still particularly hard to come by in the region. That need, Rand said, is only likely to intensify “given impending retirements of large numbers of older workers.”

Nationally, nearly 25% of those employed in the upstream sector are older than 55. Rand also found that of the five workforce development programs in Appalachia benefiting from API, just two focused on transitioning workers such as displaced coal miners into shale-related jobs. They are ShaleNet and Southwest Training Services.

The API focuses on a 27-county territory spanning western Pennsylvania, eastern Ohio and northern West Virginia, a part of the basin that has seen heavy shale development. Rand said there is a major demand for improvement in STEM education curriculum, citing a 2014 study that found 40% of parents, educators and business leaders surveyed in the region believe that local school systems need to do better at preparing students for the jobs of the future.

The same study also found a lack of awareness in Appalachia’s more rural regions about how STEM education can prepare students for better job opportunities.

Chevron has committed $20 million to help improve and support STEM education in the region. One of the Marcellus Shale’s largest acreage holders, the company recently unveiled a separate study that found Pennsylvania alone could see a $60 billion increase in gross domestic product over the next decade and 100,000 more jobs if it takes advantage of certain opportunities being created by the shale boom. That study also found that more work must be done to address the skilled labor gap and to keep engineering talent in state.

For example, Royal Dutch Shell plc’s ethane cracker, which is under construction in western Pennsylvania, is expected to create 600 jobs once it’s operational. About a quarter of those positions are likely to involve chemical, mechanical and civil engineering backgrounds, Shell has said. But skilled trade, health, safety and environmental personnel positions are also going to need to be filled.

So far, Rand found that API workforce programs have engaged well with industry leaders to help meet their needs. Rand will continue offering interim assessments of the initiative through 2019, with a final evaluation due in 2020. API’s efforts are part of a growing network of similar programs and studies aimed at expanding and strengthening the basin’s energy sector. 

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