INSIGHT: US energy sector faces workforce crisis

08 November 2007 16:20  [Source: ICIS news]

Industry faces workforce crisis as Boomers retireBy Joe Kamalick


WASHINGTON (ICIS news)--The US energy and process industries are facing a critical workforce shortage that could seriously aggravate power and feedstock problems that are already at crisis level.


Industry in general and the energy sector in particular are about to experience a sharp decline in skilled and experienced workers at every level from the shop floor to the executive office.


The workforce worry in energy is particularly acute, and because energy is fundamental to practically every other economic sector it could have impact far beyond the traditional energy industry fields of electricity, oil and gas exploration and development and refining.


According to Emily DeRocco, assistant secretary for employment and training at the US Labor Department: “The US energy industry is undergoing a dramatic transformation as advanced technologies revolutionize the traditional methods of energy extraction and refinement.”


“In addition, the renewable and alternative energy fields present a whole new set of opportunities for the industry that did not exist a decade ago,” she told the US Senate Committee on Energy and Natural Resources this week.


Senator Pete Domenici (Republican-New Mexico), ranking member on the committee, warned that the looming and large shortage of skilled workers in the energy industry “could cause significant delays in the delivery of energy, including oil and gas”. The latter of course is critical in the US chemicals industry as both a feedstock and power fuel.


“We recognise this transformation as critically important for our economy as a whole, and that a successful transformation requires a highly-skilled workforce,” DeRocco said.


The trouble is that just as the energy sector is about to take off in the dramatic transformation DeRocco describes, the industry doesn’t have enough pilots or aircrew to keep the thing flying.


“First, a large percentage of current workers in the energy industry are nearing retirement,” DeRocco noted. 


The oldest members of the Baby Boom generation (those born between 1946 and1964) will turn 62 years of age next year, old enough to begin collecting at least partial retirement benefits. 


The wave of Boomer retirees will take on biblical flood proportions in 2012 when the first Boomers achieve 66 years and become eligible for full retirement benefits.


The average age of energy industry workers is more than 50 years, DeRocco noted. That means that up to half of the one million energy workers now on the job will retire within five to ten years.


“As experienced workers retire, they are difficult to replace because too few entry-level workers are equipped with the advanced skills required by today’s technologically sophisticated companies,” DeRocco said.


The retirement wave is compounded, she said, by a lack of interest in the energy sector among many in the general workforce.  Stereotyping of energy careers as low-skilled jobs has turned a lot of youthful workers away, she said, despite the fact that the energy sector offers a wide range of highly skilled and well-paid career options.


There were well-established energy industry training and career programmes in the 1960s and 1970s that might have fed experienced and qualified workers into slots about to be vacated by outgoing Boomers. 


But many of those workforce development systems were eliminated or sharply reduced when energy industry had a downturn in the late 1980s and early 1990s.


Although many of those programmes have been revived, said DeRocco, “they have not expanded at the same rate that the industry’s need has rebounded”.


Lastly, our 21st Century energy sector requires technical and scientific skills that were not common 50 years ago. “We know that employers in all sectors of the industry need workers who are more proficient than their predecessors in math, science and especially technology skills,” DeRocco said.


She said her department is partnering with the Department of Energy and the US energy industry to develop accelerated training and apprenticeship programmes and career-path direction at US universities and community colleges to steer more candidates to engineering and science disciplines.


In addition, to get a better grip on the problem, the Labor Department is joining with the Energy Department and the Department of the Interior to fund research by the National Academy of Sciences on what strategies could help move a lot of new workers into energy jobs.


That study is to be completed around October 2008.


However, it is worth noting that the study was authorised by the Energy Policy Act of 2005 - so it will have taken three years for the wheels of government to respond to what policymakers themselves describe as a workforce crisis.


By the time the study is out and policymakers have something new to mull over, the first of the Boomers will be heading out the door, leaving behind positions that may well remain vacant.

By: Joe Kamalick
+1 713 525 2653

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