Economic Development

Ohio Oil and Gas Industry Rebounds, Needs Workers

YOUNGSTOWN, Ohio – The oil and gas industry across the state of Ohio is on the rebound and is searching for workers to staff positions representatives say will be in demand for the future.

Pipeline construction workers, rig operators, welders and thousands of assorted jobs connected with oil and gas processing and end use are among the areas where industry specialists see the most opportunity for employment, industry specialists add.

“We’re coming out of a downturn, which is really exciting and starting to see some reinvestment,” Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, told about 25 guests during a question-and-answer session with representatives of organized labor, faith-based groups and educators.

The event was held at the International Brotherhood of Teamsters Local 322 in Youngstown and organized by Strategic Resources Consulting.

Critical job shortages at the moment are evident in transportation, Chadsey said, since the industry depends heavily on moving materials during the construction phase of well pads, for example.

“Well pads require 500 to 600 trips, hauling in equipment, water, sand, then hauling it back out again,” he said.

Chadsey told the group that should a prospective worker earn their commercial driver license, or CDL, then a job is waiting for them. “If you were to come up to one of our companies and say ‘I’m drug free and have a CDL,’ I could guarantee you would be walking out with a job,” he said.

Other positions such as industrial engineers, petroleum engineers and diesel mechanics are also in high demand at the moment as energy programs accelerate their drilling programs, Chadsey said.

However, it’s likely demand for workers will increase substantially should related developments such as Royal Dutch Shell’s $6 billion ethane cracker plant in Monaca, Pa., and new combined-cycle electrical plants that are fueled by natural gas take shape across the region.

“Our feet are planted firmly back on the ground,” Chadsey said of the industry. “We’re going to see the opportunity for increased employment as cracker plants and power plants come online. That’s going to require more drillers to drill more holes to produce more gas, and more pipelines to deliver that gas to downstream opportunities.”

Outside the union hall, a handful of protestors who oppose hydraulic fracturing – a method used to stimulate well production through the use of water, sand and chemicals – stood along the U.S. Route 422 corridor holding signs that displayed their concerns.

“We are just trying to protect our water,” said Susie Bieresdorfer, a member of FrackFree America and supporter of a charter amendment that seeks to ban “fracking” within the city limits of Youngstown. The amendment has failed each of the seven times it’s been placed before voters.

The group has stressed that hydraulic fracturing poses a threat to the community through the potential contamination of aquifers and earthquakes triggered by the process.

Energy companies started to explore the Utica shale in earnest in 2011, driving rig counts to more than 50 per week in the eastern part of Ohio. By 2014, however, the price of oil and gas collapsed, causing these companies to scale back drilling programs and cutting costs elsewhere.

Oil prices have since rebounded and energy companies have become more efficient in their drilling efforts, enabling them to restart exploration in Ohio.

About 25 rigs have been operating in the Utica shale consistently over the past year, Chadsey said, a much healthier number than three years ago, when the rig count numbered less than 10.

Yet some in the audience expressed concern that the industry isn’t doing enough to attract minorities into its workforce.

Chadsey said the key is to spread the word about job opportunities in the industry so that everyone across the state could have a chance to participate – and bringing that message to the Mahoning Valley is important.

However, the nature of these jobs is much different than many in this region might be accustomed to, Chadsey said. “We’re a traveling industry, so it’s a different mindset,” he said.

Claire Linkhart, a legislative analyst for American Petroleum Institute Ohio, told guests that nationwide, there were roughly 1.4 million direct jobs in the oil and gas industry in 2015. About 27% of workers in the industry were minorities.

Yet some 1.9 million jobs are expected to open across the industry through the year 2035, and roughly 40% of those are likely to be filled by minorities, she said.

“The average pay in the oil and gas industry is $100,000 per year and that’s $50,000 more than the national average,” she said.

Yet it is critical that those considering a career in oil and gas possess basic skills in science, technology, engineering and mathematics, or STEM, disciplines, Linkhart said. Nevertheless, she emphasized that nearly half of all STEM jobs do not require a four-year degree and a third of all STEM jobs are blue-collar occupations.

Still, less than a third of the bachelor degrees awarded to women in 2015 were in STEM fields, compared to 42% of degrees awarded to males. Data also show that minorities have lower transition rates from STEM degrees to STEM employment, she said.

API is working to bridge these gaps by promoting STEM programs in schools, jobs fairs, science fairs and though other outreach efforts, Linkhart said.

The industry is changing as well. Last month, Chesapeake Energy Corp. announced it would sell its assets in Ohio for $2 billion to Encino Acquisition Partners, opening up the door for further development in the Utica. Ascent Resources also assumed the position of Hess Energy in Ohio, and Eclipse Resources announced this week a merger with Blue Ridge Mountain Resources.

Developing a cluster of ethane cracker plants and an ethane storage facility is an important step to maintaining development within the state, Chadsey noted.

Cracker plants use ethane as feedstock and “crack” the molecules into ethylene, producing polyethylene pellets that are used in plastics. While the Shell cracker plant should be commissioned in the early 2020s, the industry is awaiting word on whether PTT Global will move forward with a second plant along the Ohio River in Belmont County, representing nearly $10 billion of new investment.

Getting the word out to the minority community was one of the factors for the meeting Tuesday, said Jaladah Aslam, senior associate at Strategic Resources.

“It looks better,” she said, noting that the industry appears much stronger than it was two years ago and development of the cracker plants are critical to bolstering employment throughout the region, including minorities.

“We have to let people know what’s out there,” she said. “This is just one industry – we want to try to give them some direction – there are so many opportunities.”

She added that companies associated with API are also exploring areas such as wind, solar and other forms of renewable energy. “We want our children and young adults to at least think about these opportunities.”

Pictured: Claire Linkhart of American Petroleum Institute Ohio; Jaladah Aslam of Strategic Resources Counseling and Mike Chadsey of the Ohio Oil and Gas Association were among the roundtable’s participants.

Copyright 2019 The Business Journal, Youngstown, Ohio.