Labor Dept. prepping for AK LNG job demand

Building a $43 billion project naturally requires a lot of labor.

More specifically, the Alaska Gasline Development Corp. estimates its $43 billion Alaska LNG Project will generate upwards of 18,000 new jobs in the state over about six years of construction.

Nearly 12,000 of those jobs will be directly dedicated to the project itself: 1,300 heavy equipment operators; 1,500 pipefitters and welders; 2,300 general laborers; and 3,500 truck drivers to move countless types of materials, modules and construction equipment — not to mention the 807 miles of steel pipe.

Hundreds more electricians, carpenters, ironworkers and engineers will also be needed, as well as 1,600 people to feed, house and otherwise support those swinging hammers and welding pipe, according to AGDC.

With Alaska LNG construction ramping up in a big way in 2020 based on the gasline corporation’s timeline for the project, the direct workforce should peak in 2023 at the aforementioned roughly 12,000 workers and fade to about 6,000 during the last major year of work in 2025.

While certainly not all of the $43 billion will be spent in the state, another 6,000 or so indirect jobs could be generated as a side effect to all of the Alaska LNG Project dollars flowing through the state economy, AGDC predicts.

The project will also require roughly 1,000 personnel to keep it up and running, with 85 jobs at the North Slope gas treatment plant; 330 pipeline maintainers; up to 400 individuals at the project’s Anchorage headquarters and 240 people manning the LNG plant in Nikiski.

The new Gasline Workforce Plan outlines how the state Department of Labor and Workforce Development will make sure all of those jobs can be filled.

Department of Labor Commissioner and AGDC board member Heidi Drygas acknowledged that Alaskans aren’t likely to fill all of those positions — there simply aren’t enough people in the state — but said one of her top priorities these days is assuring all Alaskans who do want to work on the project have the opportunity to do so. And that starts with the message that a gasline, the Alaska LNG Project, is real this time.

“Yes, it’s been 40 years since we first started talking about a (gasline) project like this, but we finally have a team in place that can bring it to fruition and it’s exciting,” Drygas said in an interview.

She noted that those already employed in the construction trades and the oil and gas industry should be able to easily transition to the Alaska LNG Project if they so choose, but individuals without that experience should be looking into training opportunities now.

To that end, AGDC President Keith Meyer has stressed the message of “get ready” to those who want to be a part of the project.

Alaska’s current recession would seemingly have expanded the workforce available to work on the project as most of the roughly 11,000 jobs lost over the last two years have been in the oil and gas and construction sectors. According to Labor Department data, the closely tied industries have contracted by a combined 7,100 jobs since 2015.

However, Drygas said the lack of jobs in those industries in the state today is actually a challenge to assuring the needed labor force is in Alaska when work on the gasline gets going.

“(Construction workers) have to have some jobs available leading up to the pipeline project. That is a barrier that we face right now when we are lacking the capital budget that we have seen in years past come out of the Legislature,” she said.

Oil and gas and construction workers displaced by Alaska’s economic downturn could have gone elsewhere for work in the active Lower 48 economy or shifted to a different industry to find employment.

Alaska’s robust network of technical education institutions, from the renowned state-run Alaska Vocational Technical Center, or AVTEC, in Seward to the unique Fairbanks Pipeline Training Center, the Alaska Construction Academies, the university’s numerous vocational programs and other regional training centers, provides residents many more avenues to prepare themselves for a gasline than when the Trans-Alaska Pipeline System was built in the mid-1970s, Drygas emphasized. The trick is getting young people into their classes.

Nearly a quarter of the state’s current workforce in gasline-related occupations are nonresident workers and more than 30 percent are beyond 50 years old, according to the Workforce Plan.

“We need to reinvigorate that interest in construction jobs again and that is part of our Gasline Workforce Plan, to educate students — all Alaskans — but we are going to target students in high school to make sure they are aware of the opportunities in apprenticeships, in process technologies, engineering with the university, with any number of jobs, but we really do need to address the issue of an aging construction workforce,” she said.

Adding another layer of challenge to that effort is the fact that the state’s ongoing multibillion-dollar budget deficits have pushed the Legislature and the administration to cut the Labor Department’s discretionary budget by 37 percent since 2015, and the majority of that has come out of workforce training programs, according to Drygas.

The Alaska Construction Academy budget, for example, has been cut from $3.4 million to $1.8 million, she added. Started in 2006, the construction academies are meant to introduce high school students and adults to career options in the industry through entry-level training.

“We’re hoping that in better economic times we’ll be able to fund some of these programs again because that will directly impact our workforce development efforts for this gasline. We have too many construction workers retiring; we have to educate young Alaskans about opportunities in the trades,” Drygas said further. “And sure, it’s not for everyone but I think a lot of young folks just don’t know about it. What they Alaska Construction Academies did so well is to discover young talent in the construction industry.”

In-lieu of state funding, the department is applying for more federal Labor grants that it would administer to support training in the trades statewide.

Some legislators and representatives for Alaska trade unions have expressed concern that the joint development agreement AGDC signed in November with three large Chinese companies could preclude Alaskans from many of the jobs the project will offer.

The joint development agreement indicates Sinopec, a state-owned oil and gas giant with nearly as many employees as Alaska has residents, could have roles in the final engineering, design and construction of Alaska LNG and although nonbinding, the agreement appears to be the framework for a deal that could underpin the project.

Drygas said she is totally confident in AGDC President Meyer’s pledge to prioritize Alaska hire on the project.

“One of the best ways to ensure Alaska hire is through a project labor agreement and the governor and President Meyer are committed to utilizing a PLA on the project,” she said.

Project labor agreements are a pre-hire bargaining agreement of sorts that government entities or their contractors sign with labor unions to offer work to members of those unions.

“When you know more about the leadership team in place at AGDC and the governor’s commitment to ensure Alaska receives the benefits from the project — I understand those concerns and I’m glad people voice those concerns but I am not concerned about that,” Drygas said.

Elwood Brehmer can be reached at [email protected].