Refiners on the U.S. Gulf Coast are facing a labor shortage that could stymie plans for a busy year doing needed repairs and maintenance updates.
According to a recent report in Reuters, refineries are estimating that they’ll spend $1.26 billion on facility updates in 2017 — a 38 percent increase over this year and the most they’ve spent since 2010.
But major infrastructure projects in the energy sector, such as Cheniere Energy’s liquefied natural gas terminals, as well as petrochemical plant projects by companies like Dow, have strained the labor market for pipe fitters and ironworkers. These labor shortages could bump up the costs of completing the planned repairs, delay work or even increase the risk of accidents.
"Putting off work definitely affects the safety of the refinery,” Ed Lee, an independent safety consultant and former Royal Dutch Shell employee, told Reuters.
By one estimate, the Gulf Coast region will be short about 37,400 craftsmen needed to finish all of the projects slated for 2017. The shortage could be the worst near Lake Charles, Louisiana where Sasol is investing billions on a chemical project. That area could face a shortage of about 18,000 workers.
That strain is also expected to increase costs and headaches for a variety of manufacturing companies — including pharmaceutical and industrial firms — with labor-intensive projects scheduled next year.
A recent survey by the Associated General Contractors of America revealed that the majority of contractors are having a hard time filling positions and have increased salaries to entice workers.