While low oil prices have been the top headline over the past year, the pipeline industry is facing another potential crisis. With a spate of mainline and distribution projects forecasted for the next five years and with the prospect of many baby boomers in the industry closing in on retirement, the industry needs an influx of young talent.
Workforce shortages have been a concern in the industry for the past decade, and that concern could accelerate with low oil prices leading to staff reductions and driving some veterans out of the industry. However, a number of groups have stepped up efforts over the last year to recruit and train the next generation of pipeliners to refill the ranks.
The Young Pipeline Professionals USA (YPP) formed in March 2015 and has steadily gained members. An article in the November issue of North American Oil & Gas Pipelines reported the group’s membership at 82. Today that number stands at 125 and is projected to keep growing as the group expects to ramp up its recruitment efforts this year.
The Distribution Contractors Association (DCA) announced last fall a multi-industry coalition to address workforce challenges in the pipeline and utility construction industry. Dubbed “Who Will Do the Work?” the campaign aims to ensure enough qualified field, supervisory and management staff is available to tackle the expected workload over the next five years.
“We expect operators will invest up to $65 billion in gas distribution and pipeline infrastructure by 2020 and up to $80 billion by 2028,” says Mark Bridgers, principal of Continuum Advisory Group, a management consulting firm that is working with DCA on the initiative.
The goal of all of these efforts is to attract young, dedicated and qualified workers to a dynamic industry that, while experiencing a downturn related to low oil prices, is expected to see tremendous growth in the next decade.
Canadian pipeline operators are looking at massive expansion projects to diversify market access by expanding export capabilities and building out infrastructure to meet consumer demands on the country’s East Coast.
U.S. expansions are concentrated in the Northeast, to relieve bottleneck issues in New England and ensure the region has enough energy to heat their homes during difficult winters.
Finally, with the Mexican government reforming laws related to the energy industry and allowing foreign investment in infrastructure in the country, a number of pipeline projects are currently under way to meet demands there.
Meanwhile, U.S. government mandates in the past six years have increased demand for integrity management programs to ensure the safety and reliability of existing pipeline systems.
There is plenty of work to come. But not plenty of workers.
It’s difficult to pinpoint the root cause for the growing age gap in the oil and gas pipeline industry, says Tyler M. Abadie, P.E., partner at the Louisiana-based pipeline consulting and project management firm Abadie-Williams LLC.
“There’s no secret that after the 1980s, the energy industry consolidated specialties with the emergence of many contracting firms and service providers,” says Abadie, who also serves as vice chair of the YPP’s South Louisiana chapter. “Not only did this distance the technical knowledge of producers, but it separated specialists by their field of knowledge. When this is combined with the generational gap of vocational skills and seasoned work ethic by new-aged professionals, it creates a major problem to transition young leaders to merited roles.”
The result, he says, is the pipeline industry now must close an experience gap, as well as a generation gap.
“The retiring workforce comes from a period where practicality ruled and specifications were just an engineer’s dream,” Abadie says. “We now have to bridge this distanced experience by allowing young professionals to not only learn firsthand through application, but under the mentorship of adequate personnel. It’s a major challenge, but I know we’ll see great leaders emerge that will put forth the time.”
A challenge for the new generation is overcoming the perception that today’s young adults suffer from “a lack of work ethic,” he says. The YPP helps young pipeliners by providing opportunities to receive networking, training and leadership skills to prepare them for the challenges and responsibilities of working in the industry.
“Those who can perform, learn and excel will have many paths opened for them along the way,” Abadie adds.
Another potential struggle for younger people in the industry is relating to their older counterparts, says Eric J. Lang, P.E., systems integrity engineer at Enbridge Energy and secretary of the YPP.
“I don’t know if I would use the word struggle, but there are difficulties when dealing with differences in generations,” he says. “I see it daily as more senior coworkers try to relate to the different ways that I attack challenges and the different perspectives that I bring relative to the more established ways of thinking.”
YPP treasurer Cassandra K. Stacey, P.E., is senior asset integrity engineer at Harvest Pipeline and Hilcorp Energy Co., and she can relate to Lang’s experiences.
“At my company, similar to the industry, there is a distinct gap between generations, and oftentimes I’d rather bounce ideas off of peers in the industry that I’ve met through the YPP rather than consult a more senior engineer within my company,” she says. “I especially see the generational gap within the pipeline operators and construction foremen located at our field locations.”
Lang says that groups like the YPP help younger workers by providing a forum to share their experiences and knowledge among peers.
While the YPP’s leaders stress that the group is not a job placement service, a benefit of the group is providing a security net for younger workers in the industry.
“Given the current financial environment of the industry there are many concerns around finding and retaining jobs for members,” Lang says. “The benefit that the YPP can offer to its members is the network that YPP members can build. As anyone who’s been through a job search knows, having a network around you is a tremendous asset.”
Recruitment is a critical aspect of expanding YPP membership, but also filling workforce shortages in the industry, Abadie says. However, that doesn’t mean open hiring and handing out jobs willy-nilly.
“We need to be ever mindful of the caliber of individual brought into the industry,” Abadie says. “The American spirit and work ethic of the past is not as prevalent in today’s generation as it was 30 years ago. We are now faced with an aging infrastructure of pipelines that need to be cared for by professionals that do not possess a handbook for doing so.”
Many pipeline assets were put in the ground 50 to 60 years ago with the expectation that they would be replaced or be decommissioned as supply areas matured, he says. However, new technologies and fossil fuel demands have extended the life cycle of these assets.
“High regulatory requirements, environmental consciousness and economic drivers put pressure on operators to balance safety, compliance and revenue in a synchronized dance year after year,” Abadie says. “Since this requires sensitivity, high ethics, a constant search for knowledge and the ability to communicate with peers, it is crucial that we recruit young professionals that possess a work ethic high above the industry standard. The next few decades will be very exciting as we begin to document the care of these older assets and bring in new individuals who will assist in their care and operation.”
The YPP offers a variety of training opportunities on a regular basis, Stacey says, offering at least one training opportunity each month, either in person or electronically, on various topics that “mirror the pipeline lifecycle: design, construction, operations, integrity, legal, risk and decommissioning.” She adds that the group is working to make these webinars available after the live meeting for those who may have missed it or if they want to “brush up on a specific topic.” However, she urges that the best training comes from being in the field.
“I strongly believe the best training obtained is in the ditch with the pipeline,” she says, “not in a classroom talking about it. Go out to the field as much as possible and see things with your own eyes.”
The YPP is also planning to participate in the upcoming International Pipeline Conference (IPC), Sept. 26-30, in Calgary, Alberta. Stacey says YPP leaders want to partner with the Young Pipeliners Association of Canada (YPAC) for a joint event at the biannual conference.
These events are a major part of the YPP’s strategy for attracting and maintaining membership, says Landon Lucadou, engineering specialist at Dynamic Risk Assessment Systems Inc. and YPP’s event planning/community of interest lead.
“In order to effectively assist in maintaining the ranks within the pipeline industry, YPP actively reaches out to educate young potential prospects with industry knowledge and provide a breakdown of the vast opportunities available within the industry,” Lucadou says. “Not only do the engaged individuals build relationships with experienced industry professionals, we also spark their interest about the pipeline industry in hopes that their interest/commitment will help lead the oil and gas industry into a safe and sustainable future.”
The drastic drop in oil prices over the past year and a half have led to a slowdown in pipeline project development and likewise a reduction of workforce demand. Continuity of work is a primary driver of bringing in new recruits, says Lyall Nash, president and general manager TESTCO Western Corp., a pipeline testing contractor based in Calgary. Nash is also second vice president of the Pipe Line Contractors Association of Canada (PLCAC) and chair of the Canadian Pipeline Advisory Council.
During the past busy period, Nash says PLCAC members were able to recruit enough union workers to complete a number of major pipeline projects in Canada.
Now with major pipeline projects being delayed and a limited number of projects available, contractors lose many of those workers to other sectors or they retire and move onto to something else in their life.
Likewise, younger workers aren’t as interested in the industry because there isn’t a high demand for employees.
“Currently, with the lack of pipeline projects in 2016, there is no need to recruit or train new entrants,” Nash says. “We cannot provide for union members who rely on work in our industry.”
The lower volume of work this year means the industry is in danger of losing even more veterans, he adds. Pipeline projects help attract new workers and provide the final step in training.
“Getting the new workers on a project puts the training to work and working in one of our crews provides the final training to make the new workers competent and safe workers,” Nash says.
Who Will Do the Work?
While low oil prices have led to workforce reductions and lowered the near-term demand for qualified personnel in the industry, the coalition led by DCA and Continuum Group hopes to capitalize on that trend.
“Low oil prices have freed up people on the pipeline side who are now searching for what to do next,” Bridgers says. “On the distribution side the exact opposite is happening. The increased demand and workforce shortage continues to get worse. The question becomes, how many pipeline people will come on over to distribution side versus taking on some other kind of work?”
The “Who Will Do the Work?” coalition has been meeting since August 2015, researching the industry and laying the foundation for a strategy to address workforce shortages. The biggest challenge area, Bridgers says, is finding foremen, supervisors and project management staff. The coalition has identified five core concepts to reach its goals:
- Forecasting Supply and Demand
- Awareness and Recruiting
- Retention and Career Development
The group’s current focus is on points 1 and 2, and then to build a five-year strategy to address high priority regional labor availability needs by 2020 and a 10-year strategy to more effectively attract individuals to enter the industry.
The coalition is targeting middle school students as the primary focus of its awareness activities, with the goal of exposing those 13 years old and up to the pipeline and utility space and letting them know what careersare available.
“These careers are entrepreneurial, and they can make a lot more money in entry level positions than they can in service level jobs,” says Bridgers, referring to fast food or retail positions young people typically enter. “The ballpark entry level salary in an urban market of the pipeline space with modest skills, such as an apprentice level, is $30,000 to $50,000 per year.”
One of the concerns the industry faces in attracting new workers is competing with other career choices.
“The concern is looking backwards utilities and contractors have competed against each other for staff,” Bridgers says. “Looking forward they will have to compete against other construction industries and other markets to fill positions. The current overall U.S. workforce is growing at about 1.5 percent a year, while the need for staff in the pipeline and utility industry is growing at about 6 to 8 percent a year. At that rate, there’s going to be shortage of about 4 to 6 percent every year. Filling that shortage has to come from other construction spaces and from people that otherwise would have gone into some other industry.”
One of the concepts the coalition has put forth is that for all underground trades — pipelines, underground electrical, telecom, water and sewer — the base training is about 60 to 80 percent the same. The group is exploring whether to expand efforts to include all sectors in recruiting and training and then letting the individual make the choice about what to specialize in, as the skills are applicable to all contractors in underground work.
Those interested in participating in the “Who Will Do the Work?” coalition are invited to attend an open meeting 1-4 p.m., April 4, at the Ritz-Carlton Four Seasons in Chicago. The meeting is being held prior to the Utility Contractor Workshop presented by DCA and the American Gas Association (AGA). A planning team will be formed at the meeting and will convene throughout the year to discuss planning and strategies. For more information, contact Bridgers at firstname.lastname@example.org, Rob Darden at email@example.com or Eben Wyman at firstname.lastname@example.org, or by visiting dcaweb.org.
Closing the Gap
Young people who enter the pipe-line industry face a number of challenges in terms of experience and social interaction.
“The biggest challenge for young persons entering the pipeline industry is the fear to ask questions or worse, not knowing what questions to ask,” Stacey says. “Being an inexperienced person in any industry, much less one with as much impact as pipelines that run through people’s backyards, can often be uncomfortable to ask questions when you aren’t certain of the implications. YPP offers the networking and training targeted specifically at young people to offer a forum to ask questions, meet people who know the answers and share knowledge of things that we may once have considered to be a ‘stupid question.’ We have an army of extremely excited and supportive advisors within the industry just waiting to get asked to be mentors.”
Active recruitment efforts in the industry will help fill workforce shortages in the near term, but Stacey says ongoing efforts are needed to ensure these generational gaps don’t recur in the future.
“Active recruitment is important for YPP so that as the current young pipeline professionals mature, that there are even younger professionals to fill their place. It’s a constantly spinning wheel,” she says. “Our vision is to provide the networking and training to current young professionals through webinars, conference related events, mentorship and other happenings so that these professionals can become significant contributors within the industry. We hope that the current young pipeline professionals become the wise and guiding forces over the next 20 years and that the pipeliner’s generational gap is an issue that is resolved once and for all.”