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Editor’s Message: Handling the Glut and Lack Thereof

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BRAD-HEADSHOTThere’s no doubt that the oil and gas industry in North America is in a period of contraction. After about seven years of sustained boom, the air has been sucked out of the market and left behind low prices. Yet, production remains high, demand continues to grow, new resources need new pipelines, and the industry still faces potential workforce shortages in the years to come.

Consultant Eben Wyman explains the new initiative that the Distribution Contractors Association (DCA) has put forth to address the concerns over what he terms the “greying workforce” and the stigma that the industry faces in attracting younger workers to fill the experience gap.

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“Many firms describe high percentages of their workforce being over 40 years old and a significant number of workers in their 20s and/or having less than five years’ experience,” Wyman writes in this issue’s edition of Pipeline Perspectives (see p. 50). DCA’s new “Who Will Do the Work?” campaign is a multicoalition initiative to attract new employees to the industry.

Oil and gas production remains high in North America, thanks in large part to the shale regions. There’s a major glut of energy resources that has nowhere to go because of lacking pipeline takeaway capacity and continued U.S. restrictions on exports.

The U.S. government has started allowing some liquefied natural gas (LNG) exports on a case-by-case basis, and industry trade associations are lobbying for the government to lift 1970s-era trade restrictions on crude oil.
Furthermore, the opening of Mexico’s energy industry to global investment provides another opportunity, and companies like Energy Transfer Partners and ONEOK Partners are looking to build new pipelines to serve the market south of the border.

“These pipeline investments are needed to connect the regions that don’t currently have access to natural gas,” said David Crisostomo, a natural gas and power analyst at IHS Energy. He added, “Access to more affordable power will not only enable the petrochemical industry to grow and flourish, but also many other industries, such as automotive and consumer goods production.”

Another way to counteract low prices is to find cheaper ways to extract oil and gas. Researchers are on the job!
The U.S. Department of Energy’s National Energy Technology Laboratory and its partners, West Virginia University, Northeast Natural Energy and The Ohio State University, have been studying unconventional gas production in the Marcellus shale in part to improve operational efficiency.

As part of the Marcellus Shale Energy and Environmental Laboratory project, the research team began drilling an observational well in Morgantown, West

Virginia, on June 27. The project will in part explore ways to optimize well placement and hydraulic fracture design within the Marcellus shale. The research team will deploy technologies not yet widely used in the industry to assess their potential to improve efficiency and lower environmental impact.

Despite the supply glut and market contraction, the industry can still find ways to get stronger through improved processes and training younger workers to close the experience gap. Getting better isn’t always about getting bigger, but that too will come again.

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