Panelists discuss ways of attracting manufacturing workforce
Bill Flanagan of the Allegheny Conference poses a question to a panel of workforce and labor officials Monday during the Pennsylvania Energy and Manufacturing Summit. At far right is Andrew Browning, executive vice president of the Consumer Energy Alliance, which sponsored the event.
Michael Bradwell / Observer-Reporter
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PITTSBURGH – A group of manufacturing and labor leaders agreed Monday that the oil and gas derivatives being produced in the Marcellus and Utica shales are creating the “opportunity of a lifetime” for economic development in the region.
But of the 20 people who participated in three panel discussions moderated by Bill Flanagan of the Allegheny Conference, nearly all concurred much remains to be done with workforce development to meet current and future job demands.
The occasion was the Pennsylvania Energy and Manufacturing Summit, sponsored by the Mid-Atlantic division of the Consumer Energy Alliance, a nonpartisan group that links energy producers and consumers. The daylong event was held at the International Brotherhood of Electrical Workers headquarters on Pittsburgh’s South Side.
One of the day’s first speakers, Peter Molinaro, senior adviser for government affairs at Dow Chemical Co., said the wet gas, in particular, is viewed as “the opportunity of a lifetime,” noting that it already has caused the chemical maker to reverse its plans to close an ethane cracker plant in Louisiana and to invest in a new cracker facility in Texas.
He noted that Dow uses the oil equivalent of 850,000 barrels a day around the world to make chemicals, an amount equal to Australia’s daily energy consumption.
With ethane becoming a domestically sourced fuel for petrochemical feedstock, Molinaro noted the United States is about to eclipse Russia as the No. 1 energy producer in the world.
With cheap abundant natural gas, many U.S. industries, including aluminium, chemicals, fabricated metals, fertilizer, glass and iron and steel, become more competitive globally, he added.
Despite that ability to create jobs in the manufacturing sector, Molinaro reminded the audience of about 100 people that the United States has lost about 6 million positions in manufacturing since the 1990s.
Rob Boulware of oil and gas exploration company Seneca Resources Corp. cited a study conducted by Bentek Energy for America’s Natural Gas Alliance that said the current output of domestic natural gas, especially from the Marcellus and Utica shales, is creating a positive story for supply to the power generation, manufacturing and transportation sectors, with supply staying ahead of demand, even with reduction of new well production while the industry waits for infrastructure to be built to carry gas to new markets.
While the shale boom and its related job creation is a well-known story in Southwestern Pennsylvania, Robert Powelson, chairman of the Pennsylvania Public Utility Commission, said abundant, locally produced natural gas also has been responsible for a 52 percent drop in power prices across the commonwealth.
The wet gas also helped to reopen Sun Oil Co. refineries in southeastern Pennsylvania.
From a purely economic impact standpoint, Powelson said job creation from energy in Pennsylvania totaled 600,000 positions in 2010, and is projected to be 870,000 by 2015, with an average annual salary of $81,000.
“The shale gas industry will generate $900 billion in federal, state and local taxes over the next 25 years,” he added.
But everyone who spoke Monday said solving workforce challenges – from encouraging young people to consider skilled trades to getting schools to understand that many good-paying jobs require only a two-year degree to repositioning manufacturing as a place where rewarding careers can be built – will have to be met if the region and the country are to realize the full dividends of domestically produced energy.
In his opening remarks, Jim Cooper, of the American Fuel and Petrochemical Manufacturers, noted that in the last four years, the abundance of dry gas for home and commercial heating, as well as that of the “wet gas” and its ability to supply feedstock for the petrochemical industry, has had many positive implications for the region’s job picture.
“But if we don’t solve the workforce issue, just having all that gas down there isn’t really going to do us much good,” he said.
During a roundtable discussion on developing a skilled workforce, Rebecca Lucore, chief of staff for Bayer MaterialScience, acknowledged that the company is seeing shortages of qualified workers.
“A lot of these great manufacturing jobs only require a two-year degree,” she said, adding that some of the openings remain vacant for eight or nine months.
Jim Kunz, business manager for International Union of Operating Engineers Local 66, said the union recently invested $8 million in its training site to meet demand for its members who run bulldozers and cranes on many construction sites, including work on gas pipelines.
While the union provides ongoing training for its members, Kunz said “trying to convince school districts and guidance counselors that there are family-sustaining jobs is a bit of a challenge.”
Anne Pastor, program manager for the PA Steel Alliance, said education may be at a crossroads when it comes to putting a value on training.
“I think education will become more career-driven rather than education-driven,” she said.
While some labor leaders said the country may have to look to immigration as a way to fill the job demand being created by energy and manufacturing, other panelists said they believed there were enough Americans to fill the openings.
Esther Bush, chief executive officer of the Urban League of Greater Pittsburgh, said unions and employers need to bring more of their opportunities to minorities, noting that many don’t have driver’s licenses to get out to job-training sites or apprentice programs.
Cooper of the AFPM said his group will announce next month a new initiative to create a national discussion to provide education about jobs in the manufacturing and supply chain sectors. The discussion will include academia, labor and workforce development leaders, think tanks and environmentalists.
“We have to find a balance in the next couple of years,” he said, “or we can kiss this opportunity goodbye.”