Rolling Up Sleeves

Friday's work force education summit at Waynesburg to focus on Marcellus job demands

Washington PA Observer Reporter
25 October 2010
By Michael Bradwell, Business editor
mbradwell@observer-reporter.com

A meeting of the minds will be held later this week at Waynesburg University, where more than 100 area industry, education and work force professionals will address one of the biggest manpower challenges ever to hit the region.

According to Barbara Kirby, director of Waynesburg University's Center for Research & Economic Development, Friday's Tri-County Expo Work Force Education Summit will attempt to determine how best to proceed with educating the work force in a five-county area of Southwestern Pennsylvania to meet the projected long-term demands of the Marcellus Shale industry.

Registration for the summit begins at 8:30 a.m. The program runs from 9 a.m. to 3:30 p.m.

Kirby said the goal of the summit "is to get education leaders around the same table as the industry leaders and begin to understand the depths of this challenge. We need to initiate a dialogue to understand what a well-qualified energy work force looks like and to identify gaps, opportunities and next steps in collaborating to meet the needs of the natural gas industry and the region's work force."

The summit will showcase the findings of a study conducted earlier this year that projects a demand for between 8,000 and 13,000 workers across a wide range of blue-collar and white-collar job skills within the next few years in Washington, Greene, Fayette, Beaver and Westmoreland counties.

The comprehensive survey was conducted by the Marcellus Shale Education & Training Center, a collaboration between Williamsport-based Pennsylvania College of Technology and Penn State Cooperative Extension.

In the spring, MSETC team members conducted in-depth interviews with many of the major Marcellus Shale energy and drilling companies and service providers operating in the region, which represented nearly 90 percent of all permitting activity here from 2009 to 2010. The team also created an online work force needs assessment in the summer for gas industry representatives. Thirty respondents completed the online survey.

Funding for the project was provided by the state Department of Labor and Industry through the Southwest Pennsylvania Oil & Gas Industry Partnership on behalf of the Southwest Corner Work Force Investment Board and the Westmoreland-Fayette Work Force Investment Board.

The MSETC model shows that more than 420 people working within about 150 different occupations are needed to perform all the operations required to complete and produce gas from a single Marcellus Shale well in Southwestern Pennsylvania.

The occupations range from geologists, biologists, chemists, landmen, civil engineers, attorneys, loggers and hydrologists to heavy equipment operators, commercial truckers, welders and general laborers.

The number of workers required per well becomes exponential when coupled with another MSETC statistic that shows that as of August, there were 217 wells drilled and 438 permits issued for 2010. Those numbers followed 295 wells drilled and 682 permits issued in 2009.

According to an analysis by MSETC of publicly made statements and personal interviews with companies operating in the region, the number of wells drilled in the region could increase from about 330 wells this year to roughly 470 wells in 2011 and 779 wells per year by 2013.

Kirby, who has worked in various work force development roles for the past 25 years, said she has never seen job demand from industry on such a scale in the region.

"The oil and gas industry ( job demands) are also complicated by the fact that traditional industries here are expanding at the same time," Kirby said, noting the ongoing recruitment efforts for coal miners by Consol Energy and other area mining companies.

One of the biggest challenges to finding new workers falls in the area of ensuring adequate training.

When MSETC surveyed Marcellus energy companies, drillers and support companies, the top two needs, identified equally by 77.8 percent of respondents as "a very big challenge," was finding workers with the required experience and workers with adequate required technical skills.

Most respondents indicated they used some type of training programs, although the vast majority used private or in-house training services, which surveyors said suggests an opportunity for public work force development organizations.

One of the most interesting aspects of the MSETC assessment is its delineation of drilling phase jobs and production phase employment.

While noting that the phase of natural gas development during which gas wells are drilled and pipeline infrastructure is put into place is an extremely labor-intensive process, the MSETC noted that in the oil and natural gas industries, the drilling phase period is often referred to as "the boom," as vast work forces are often suddenly required to perform tasks associated with natural gas development. Conversely, the drilling phase can suddenly decline, which is often referred to within the industry as "the bust."

According to MSETC, the drilling phase is defined by workers who maintain temporary residency in a given area, such as in motels, RVs and monthly apartment/house leases.

The group noted that the Southwestern Pennsylvania region has a large advantage over other Marcellus Shale regions because many of the large natural gas companies have located their regional corporate offices in the greater Pittsburgh area, which provide local opportunities to fill large numbers of white-collar jobs in these offices. They noted that white-collar or "office" jobs in the gas industry tend to be more geographically stable than other types of work that must be performed on a development location.

While acknowledging that many of the jobs created by natural gas development in Southwestern Pennsylvania have been initially filled by transient or non-local workers, MSETC adds that "the majority of these jobs have the potential to be filled locally if/when the properly trained and skilled workers are available."

The authors acknowledge that it is uncertain how long the drilling phase will last within the Marcellus Shale or within specific areas of the shale formation, reporting drilling estimates that range from 10 to 70 years, which they said reflect uncertainty created by fluctuations in commodity prices, economic conditions and technological changes.

The study contrasts drilling phase jobs with those coming from the production phase, noting that the latter are viewed by the industry as long-term or permanent, tend to be less labor-intensive, with fewer hazards and more specialization than development phase jobs.

It also notes that the high-BTU gas that is present in about 60 percent of the Southwestern study area offers an additional opportunity for local production phase jobs, because of the need to remove non-methane compounds such as butane, ethane and propane as well as oil, water and gasoline that naturally occur in the area.

Kirby said the growing demands of the Marcellus Shale industry here may not be fully understood in the region.

"The biggest challenge now is awareness," Kirby said last week. "I'm not sure if we as a community fully grasp the opportunities and challenges that are on our doorstep."

For more information on Friday's Tri-County Work Force Education Summit, contact Barbara Kirby at 724-852-3388 or e-mail bkirby@waynesburg.edu.