Beyond the Horizon The drag on industry growth
Dailey J. Berard President, Universal Fabricators New Iberia, Louisiana Changes in oil and gas development in the years ahead will come at an accelerated pace, compared to what the industry has experienced in the past half-century. Each decade is shaped by a different technology. The industry is very different today from what it was 10 years ago.
Dailey J. BerardChanges in oil and gas development in the years ahead will come at an accelerated pace, compared to what the industry has experienced in the past half-century. Each decade is shaped by a different technology. The industry is very different today from what it was 10 years ago.
New Iberia, Louisiana
Fueled by a mini-boom in the US Gulf of Mexico and sustained by stability in a strong North Sea rig market, worldwide rig demand is at its highest level since early 1984. What's more, other markets are on the verge of improving, and worldwide rig utilization in excess of 95% is attainable for the first time since 1982.
The Industrial Age has given way to the Information Age. Companies have to do more - faster and better - with less. Companies are eliminating excess baggage, abandoning bureaucratic practices, and shrinking dramatically the time and cost it takes to get things done. Companies that are lean, agile, and quick to respond clearly have the edge. There will be continued destabilization. Some companies will ride the winds of change, others will fail. We cannot wait for the storm to blow over. We've got to learn how to work in the rain.
The biggest drawback to the industry's growth, particularly in the US where the need is greatest at the moment, is a failed education system. The industry can create the jobs necessary, but if we don't have a trained and qualified work force, it's all to no avail. Perpetual change will be crucial if companies are to survive in the future. The industry needs problem-solvers, go-getters, and people who are motivated to achieve individually and in teams.
One of the top requirements in today's job market is schooling beyond high school. Three-fifths of students in the US who reach their senior year of high school either don't graduate, or graduate with less than seventh grade skills. A lack of skilled workers encourages industrialists to use less labor and invest more capital to produce a given amount of work.
Technical and community colleges could train 70% of high school students that do not go on to college. Currently, over half of students do not meet the minimum high school requirements or do not finish high school. Only 30% of high school graduates attend college in the US. Of this number, only 12% complete college. Fully 75% of workers have less than a college education.
Unfortunately, the US government among others supports and subsidizes this dependency, and dependency breeds more dependency. We need to change welfare to workfare at a much faster pace than at present. Because of our educational failures, the industry has thousands of jobs that cannot be filled because we don't have the skilled work force to meet our needs.
Universal Fabricators turned down $100 million of work last year, and $45 million this year, because we are unable to staff up with additional skilled workmen. Every company in the fabrication industry is experiencing similar skilled workmen shortages. US fabricators will either provide for those needs, or the business will go elsewhere. The rollover value of the work US fabricators are turning down equates into the billions of dollars, and tens of millions of lost tax dollars.
Individuals capable of adapting most quickly to changing environments and conditions will do best. Education is an economic imperative since business requires greater skills and sophistication from its employees. The progress of technology leads to an ever-growing premium on skill. Only the most creative and talented can find meaningful work, and these are shrinking as more and more jobs are automated out of existence. Truly, knowledge is becoming our most important product.
Training doesn't stop with employment, however. Maintaining a credible work force in the oil and gas industry is essential to national security and well-being. On a company level, trust is fostered by communicating at all levels, increasing worker involvement and responsibility, and offering training and learning opportunities. The opportunity for advancement, increased responsibility, working in teams, involvement in problem-solving and decision-making, informal recognition by co-workers and supervisors, and training opportunities are all essential to work-force readiness.
Some companies now are rewarding their employees for maximizing the rate of return on the dollars they spend, rather than how much oil they pump from the ground. All over the world, drilling and service companies are preparing themselves to profit from the increasing demand for oil and gas. They collectively see great opportunities to share in improved profits.
The petroleum industry is operating at close to full capacity, and demand will only exceed current oil and gas production. Well trained fabrication employees can anticipate problems, eliminate waste, avoid shutdowns, and ensure quality of product for the industry. Employee involvement, training, education, and the decentralization of decision-making are the tools we must use to meet these needs.
This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that will shape the future of our industry. Offshore Magazine invites you to share your thoughts. Send your manuscript to Beyond the Horizon, Offshore Magazine, Box 1941, Houston, TX 77251 USA. Manuscripts will not be returned.
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