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Wanted: Next Generation for North American Energy Projects

The North American oil and natural gas industry has no shortage of projects in the queue, but it is beginning to suffer from a shortage of skilled and professional employees, leading the American Petroleum Institute (API) to launch an initiative to help inform -- and possibly employ -- interested job seekers.

The industry has warned in recent years that the North American oil and gas industry is beginning a huge shift as aging baby boomers retire. Close to one-quarter of the jobs added to U.S. payrolls since the economic downturn began in 2008 are linked to the booming energy industry, former Federal Reserve Chairman Ben Bernanke said in March (see Daily GPI, March 10).

API is going where the job seekers now are congregating -- online -- by launching a website to "strengthen the next generation of oil and natural gas development and the industry workforce,” said Vice President John Modine, who handles global industry services. "Our goal is to create a resource to help meet our nation's ever-growing need for a workforce that can help us realize our energy potential for the future."

The Energy Information Administration has estimated that oil and gas job growth has been 40 times that of the economy as a whole, he said.

"The 21st century energy revolution has made the United States the largest producer of oil and natural gas in the world, and we are on track to become the largest producer of crude within a few years," Modine said. "The rapid expansion of energy production in our country has created hundreds of thousands of job opportunities at a level of pay significantly higher than the national average."

The lack of technically skilled workers able to operate and maintain U.S. petrochemical projects in the queue along the Gulf Coast may pose a big constraint as construction begins over the next year, Chevron Phillips Chemical Co. LP CEO Peter L. Cella said earlier this year (see Daily GPI, April 1). A shortage of employees isn't only expected to hamper Gulf Coast expansions. North Dakota in February joined forces with Hess Corp. to lure 20,000 workers for jobs in the Bakken/Three Forks formation (see Shale Daily, March 19). ExxonMobil Corp. CEO Rex Tillerson also has urged the energy sector to partner with the building trades and colleges to create a sustainable, skilled workforce (see Daily GPI, March 14).

API's 600-plus members include integrated producers, exploration and production companies, refining, marketing, pipeline and marine businesses, as well as service and supply firms. While the United States may be short of skilled workers, it's not alone. In Canada, labor shortages are becoming acute and threaten to prevent big natural gas export and oilsands projects from moving forward, according to Mercer LLC, a human resources consultant.

In a survey issued in May, Mercer said 81% of Canadian producers considered a "technical skills gap" to be a critical problem. More than half (56%) said they have a workforce planning process to identify gaps, but only 27% said the process also provided solutions. More than half indicated they had issues filling management and leadership positions. Almost 60,000 construction workers are going to be needed to build British Columbia's proposed liquefied natural gas export industry, according to the province's estimates. Canada has said it would discourage an overuse of its temporary foreign workers program, which means the industry would have to train a homegrown workforce.

More than 98,000 oilsands jobs are expected to be generated over the next decade, according to the recently released "Oil Sands Construction, Maintenance and Operations Labour Demand Outlook to 2023."

The report's projections "underscore the significant workforce challenges facing oilsands employers," Canada's Petroleum Human Resources Council said. Specific construction occupations that need manpower include boilermakers, carpenters, electricians and laborers.

"Alberta's oilsands have proven reserves of about 168 billion bbl, and every dollar invested in the resources create about C$8 worth of economic activity, with one-third of that economic value generated outside of Alberta," according to the Conference Board of Canada. "Moreover, oilsands-related investment is expected to generate C$79.4 billion in federal and provincial government revenues between now and 2035."

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