Editor's Log: Labor: Inhibitor To Growth?

By Robert Carpenter, Editor | March 2014, Vol. 69 No. 3

People get old. People get disinterested, want to come home at night after a day’s work or simply believe they are entitled to an air conditioned and heated job environment. People just don’t find the working in the construction market appealing. For whatever the reason, the underground construction market is increasingly feeling the pinch of a limited labor pool.

The oil and gas pipeline market segment has been feeling the effects of a limited labor force for years. When pipeline construction was in an historic down cycle, concerns were minor. But when integrity management regulations were implemented, it naturally generated significant work. Industry was strained but could generally find and/or train a qualified workforce. Shale changed all that. The mandated integrity management protocols will continue and the prolonged boom in the oil and gas transmission pipeline construction rolls on. Now, the severe lack of skilled and qualified labor has proven an inhibitor to expansion.

There was an unofficial, collective sigh of relief from many when it became apparent that, at least for the time being, the Alaska Pipeline was not needed due to the boom in shale gas production in the lower 48. Before that, there was legitimate concern that the pipeline labor force could not handle both the Alaska and continental U.S. pipeline construction – too many projects and not enough workers.

Union pipeline contractors have traditionally depended upon Union Shops to meet their labor demands when they are gearing up for major projects. Now, unions are struggling to meet contractor labor requirements. But both non-union and union contractors increasingly find they must identify and train their own personnel as the older, reliable sources of obtaining laborers have dramatically decreased or dried up entirely. Union Shops scramble to attract workers to a career in pipelining and non-union pipeline contractors also find that their worker pool of qualified welders and laborers has been absorbed by other industries or the workers have sought less trying jobs.