Efforts under way to train thousands of skilled workers
Louisiana will need to add tens of thousands of skilled workers over the next five years just to build the multibillion-dollar industrial projects already in the works, not to mention even larger endeavors the state is trying to attract, according to economic development officials.
A public-private partnership that includes the Greater Baton Rouge Industrial Alliance, the state departments of economic development and labor, the Baton Rouge Area Chamber, Baton Rouge Community College, Associated Builders and Contractors, and the state’s community college and vocational school system is working to put together a comprehensive worker-training program.
“The ones (projects) that have been announced are significant. The ones that are coming will dwarf what we’ve announced cumulatively to date,” Louisiana Economic Development Secretary Stephen Moret said.
And the demand for workers, he said, doesn’t take into account the possibility of drilling taking off in the Tuscaloosa Marine Shale oil play, which stretches through the middle of Louisiana. Energy producers are still exploring the formation’s potential and figuring out the best techniques to extract the crude.
The industrial projects — many of them spurred by cheap natural gas and Louisiana’s industrial infrastructure and transportation capabilities — that have been announced include Nucor’s $750 million iron pellet plant, the first of possibly five phases for a steel complex Nucor is planning over several years worth $3.4 billion; Sasol’s $10 billion plant that will convert natural gas to diesel; Cheniere Energy’s $6.5 billion export facility for liquefied natural gas; as well as hundreds of millions in new chemical plants, expansions and modernizations, Moret said.
Louisiana could see multiple LNG export facilities (two others are applying for export permits) and will see world-scale methanol plants, ethane crackers and ammonia plants, Moret said.
Methanol is used in everything from paint and plastic bottles to plywood floors and windshield wiper fluid. Ethane crackers convert natural gas liquids to building blocks in alcohol- and plastic-based products.
However, if Louisiana can’t figure out a way to provide the new industrial construction workers — without disrupting the needs of existing plants — costs could escalate for the new projects, Moret said. Some might even become unfeasible.
Kelly Serio, a Greater Baton Rouge Industrial Alliance board member, said there are three major challenges to solving the training issue: figuring out how many workers are needed and in what crafts; how to attract people to those jobs, an ongoing problem; and how to connect the people interested in those professions with training.
“It’s a big problem. There’s not an easy solution. If there had been, it would have been done a long time ago,” Serio said.
The massive projects and their associated construction jobs represent an enormous opportunity for Louisiana, where more than 30 percent of high school students drop out, and for the Baton Rouge area, which has high unemployment, he said.
“It’s kind of ironic that you would have these two problems … and yet as an industry, we’re dying for craft labor,” Serio said.
Estimates vary regarding the number of jobs that will be needed, depending on who you ask.
Serio’s organization expects 6,500 more construction workers — welders, millwrights, pipefitters, carpenters, etc. — will be needed in the Baton Rouge area by late 2013. The Lake Area Industrial Alliance, which represents Lake Charles plants, says it will need to add 10,000 construction workers by 2014-2015.
Dan Borné, president of the Louisiana Chemical Association, said over the next four years about 34,000 additional workers are going to be needed statewide to deal with the anticipated projects.
Moret said the number is at least 20,000, and there is the potential for that to reach 30,000, 40,000 and possibly more.
There are projects out there the state doesn’t know about yet, Moret said.
“A really good question is: ‘How many tens of thousands?’ How much bigger remains to be seen,” Moret said.
Economist Loren Scott said the competition from Lake Charles and the Houston-Beaumont-Port Arthur region, also attracting mega projects, complicates the labor picture in the Baton Rouge area.
Lake Charles has Cheniere’s LNG export facility, the largest project in the area’s history, and Sasol’s gas-to-liquids plant and an ethylene cracker, Scott said. Two other Lake Charles-area LNG facilities have applied for export permits.
Those five projects represent more than $30 billion in investments, Scott said.
“You’re talking about a humongous amount of money being spent in the Lake Charles area, which is really using the exact same skill set of people,” Scott said. “If we alone were needing this many workers, that would be one thing. The problem is it’s not we alone.”
Moret said industrial construction workers are mobile, so Louisiana can draw from the entire Gulf Coast.
But companies prefer hiring locals because it’s less expensive, he said. Among other things, per diem costs are lower.
On the plus side, Moret said, most of the biggest projects will take two to three years or longer to really get going, which gives the state time to prepare.
“The really big numbers are three to five years out,” Moret said.
That’s fortunate because the labor demand is going to be very substantial and widespread, he said. In addition to the Lake Charles and Baton Rouge-New Orleans corridor, south central Louisiana, where ultra deepwater exploration activity will drive the fabrication industry, will need skilled workers.
Central and north Louisiana will also see a significant uptick in major projects, and as the economy recovers, the state expects to see manufacturing projects in those areas, he said.
In order to meet the demand for all that labor, Louisiana will need to boost enrollment in a variety of community and technical college programs, Moret said. More instructors will be needed, and efforts must be made to sell the coming jobs to residents and the training required to fill those positions.
Adam Knapp, president and chief executive officer of the Baton Rouge Area Chamber, said a comprehensive approach will be needed, one that covers training new workers, retraining those in other fields and pulling in workers in from other areas.
The process is complex, Knapp said. Lots of underlying steps must be taken to achieve each part of the training, retraining and recruiting.
The good news is that everybody — LED, the state Workforce Commission, community and technical colleges, industry, local governments and regional organizations — are focusing on the issue, Knapp said. The state also has an advantage in LED’s FastStart program, which provides customized training to firms that are expanding or relocating.
In the coming months, Moret said he expects private industry, educators, and state and local officials to assemble a model that gives a more detailed profile of the demand.
The model will include the total number of jobs, the different positions needed and when those positions will be required, Moret said.
Once those numbers are in hand, the group can work backward to determine how best to meet those needs, such as the best way to expand training programs and recruit students/workers.