HOUSTON: After spending years searching for enough crude to pump, the US oil and natural gas industry now is struggling to find and pay for enough skilled workers to tap the abundant supply in shale rock, putting $100bn in planned petrochemical projects at risk.
Engineers and similar professionals earned an average $183,000 to $285,000 in 2012 depending on their position and background, a 20 percent to 50 percent jump since 2009, NES Global Talent data show.
Wages in energy and mining have grown at nine times the rate of all industries since 2008, and starting salaries for petroleum engineering graduates are about $98,000, up 9.7 percent since 2008, according to PayScale Inc.
The need is acute at the newest chemical, refining and export complexes that serve a shale-drilling renaissance that has given US companies the competitive advantage of low gas prices.
As shale projects and their infrastructure multiplies, the ensuing war for talent will double labour costs by 2020 for skilled workers such as geoscientists and engineers, according to NES Global and Piper Morgan Associates.
“If you can spell ‘shale,’ you can get a job,” Ryan Lance, chief executive officer of ConocoPhillips, said at last week’s IHS CERAWeek energy conference in Houston.
Wage costs that already have pushed up price tags for energy-related plants from Australia to Canada by as much as 20 percent are forecast to balloon more, putting $100bn of US projects at risk during the next decade, based on data compiled by Bloomberg.
The crush of potential projects, the breakneck pace of drilling and greater manpower needs due to the complexity of efforts that include drilling 8km below the seafloor have driven up US labour costs for some positions, Dane Groeneveld, North America regional director for NES Global, said in a telephone interview.
“The cost of labour is being bid up, and that’s a problem for our competitiveness,” said Peter Robertson, a former vice chairman of the board of Chevron Corp who is now an independent senior adviser to Deloitte. “What a wonderful problem to have.”
Projects already being built by companies including Chevron Phillips Chemical and Cheniere Energy should escape the hurdle as they are expected to be completed before half the global energy workforce retires in the next 10 years.
George Biltz, a Dow Chemical vice president, said “early is better” when it comes to avoiding a labor pinch. Dow expects to complete construction of new ethylene and propylene plants in Freeport, Texas, by 2017 at a cost of $4bn.
Sasol may need 7,000 laborers at the peak of construction for a pair of new factories to be built for as much as $20bn near Lake Charles, said Mark Schnell, general manager. Sasol may phase construction to make the best use of available resources, he said.
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