Oil and gas industry needs 7,500 trained workers
Alaska needs 7,500 trained, highly skilled oil and gas workers to meet industry demand by 2018, according to a new report produced by the Alaska Department of Labor and Workforce Development.
Mega-projects like the Alaska LNG project are not included in those totals and will increase the demand. The pipeline and LNG project itself would not be in construction until after 2019, but if it appears to be proceeding in 2016 and 2017 it would have the effect of accelerating other projects, whose sponsors would not want their projects to get caught in shortages of skilled labor and logistics backlogs due to the big gas project.
“The 7,500 estimate is conservative based on what we see happening in the market right now,” without the gas project, said Wanetta Ayers, business partnerships director in the Labor Department.
The estimate is a combination of 5,500 workers needed to replace those currently in the industry who are expected to retire in the next few years, and 2,000 additional workers to accommodate expected growth in the industry.
Many experienced industry workers are approaching retirement and it will take time to recruit and train replacements. As new projects that are planned come into better focus the workforce development plan will be recalibrated.
Employment in oil and gas, by contractors and producing companies, has been increasing for years due partly to increased maintenance on the aging North Slope fields but more recently due to a rapid increase in new development activity on the Slope and in Cook Inlet.
Industry employment reached 13,400 in March, a record for monthly employment, according to Labor Department statistics. In 2011, workers in the industry earned $1.9 billion, or 13.2 percent of all Alaska payroll earnings, according to the workforce report.
“Alaska oil and gas occupations offer some of the highest wages in the state. Average annual earnings in the industry were over $120,000 in 2011, nearly two and a half times than average for the state,” the report said.
The new workforce plan is an update of the Alaska Oil and Gas Strategic Training Plan first published in 2008. The updated version has a sharper focus on education and training needs. It identified institutions offering training and the various incentives and resources available for students, and outlines a plan to step up coordination with schools on career awareness.
Most jobs in the industry require education beyond high school, whether vocational or in a traditional university. In 2011 there were 7,600 young Alaskans who graduated from high school or received a GED, but studies of the workforce show that, on average, almost a quarter of those do not proceed with further education.
The workforce plan focuses on the next five years, when several new development projects are expected, and is the work of a task force of oil and gas industry officials aided by education and training advisors.
“The Alaska Oil and Gas Workforce Development Plan recognizes the needs of the industry today and in the coming years,” said Labor and Workforce Development Commissioner Dianne Blumer. “The plan also anticipates the new workforce demand created by increased investment and a portfolio of new projects.
“To prepare Alaskans to claim the thousands of jobs that will be available, we must have a comprehensive strategy that aligns our workforce development system with workforce demand.”
Less than a decade ago, nearly 40 percent of young Alaskans left for education and jobs Outside. That trend is now changing. More Alaskans are remaining in the state for higher education and are also motivated by increased employment opportunities.
“We are now focusing on a workforce development system that is a combination of education, training and timing,” Blumer said. “We must be prepared to produce work ready Alaskans just as increased demand is emerging. Students in our middle and high schools will comprise much of the work force for these future projects.”
A goal of the 2008 workforce plan was to encourage industry and schools to work together to increase awareness among young people of career opportunities in natural resource industries.
A second objective was development of integrated career and technical education system to align and coordinate the work of training institutions with employers. Third, there was to be increased opportunities for registered apprenticeships in skilled occupations.
One successful outcome of these and other initiatives was the development of a pipeline training program based in Fairbanks which to date has provided training to 1,646 workers.
“Based on a review of wage records three years after exiting these training programs, 80 percent of these individuals were represented on Alaska payrolls. Wages for these individuals increased by slightly more than 30 percent or more than $13 million since receiving training,” according to the new workforce plan.