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Shale Boom Causing Labour War Amongst Chemical Companies

The petrochemical industry in the US has never been much of a big player, yet the shale gas boom has provided an abundant supply of cheap natural gas that can be used as a fuel and feedstock in the chemical industry.

Boosted by the shale gas boom, chemical companies have finally become economic players and it has been estimated that the sector is undergoing a $15 billion expansion all along the Gulf coast in Texas.

The rapid expansion has led to some problems, most notably in a lacking labour market.

Related article: Can GE Make Fracking Safer?

Greg Wagner, the vice president of human resources at Chevron Phillips Chemical Co., has admitted that “with shale gas, our world has turned upside down. Frankly, we weren’t as prepared for it as we should have been.”

FuelFix states that Chevron Phillips has announced plans to spend $5 billion on building an ethane cracker, as well as two polyethylene units; Exxon Mobil will begin to expand its chemical facilities in Baytown; and Dow Chemical has announced plans to build a new ethylene plant as part of a $4 billion expansion at its Freeport site.

With several large construction jobs occurring at the same time finding sufficient labour will prove difficult, and then once the projects are finished the problem will be to find skilled labour to operate the plants.

Related article: Investors Should Focus on Shale Oil, but Diversification is also Wise

Chevron Phillips Chemical currently employs about 4,800 people, with 70% of those based along the Gulf coast. That workforce is aging, with over 30% eligible for retirement, so there is a rush to find new people in the Houston area. Wagner expects to take on between 2,500 and 3,000 over the next five years.

“We’re trying to get the best and the brightest, but that’s tough in Houston,” he said. “We’re competing for the same people, whether it’s at UT, A&M, LSU or Lee College, so we’re trying to build relationships.”

To try and grow its popularity amongst students Chevron Phillips donated $75,000 to lee College last year to pay for scholarships and equipment for students on the process technology, instrumentation technology, and electrical technology programs.

By. Charles Kennedy of Oilprice.com



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