What keeps you awake at night?

That’s one of several standard questions I like to pose when I have the opportunity to meet midstream senior executives.

It’s a pleasure to chat informally from time to time with the men and women who lead the midstream, and I relish these opportunities to gain insights to their strategies, their employees, their communities and, certainly, their unitholders and investors.

That question has solicited a variety of answers over time: Safety, the environment, the need for capital, government regulation, market fluctuations, tax law, etc.

But increasingly, the answer has been the same: Staffing—how are we going to find all the trained people we need to make this business work?

The energy business is booming at the same time it faces an unprecedented wave of retirements by experienced people—and just as the business goes into its biggest growth spurt in years. It’s a double whammy, and the midstream may have the biggest challenge of all as it rejiggers and expands North America’s energy infrastructure.

It’s no secret that the oil and gas business has a yawning labor shortage. The oil crises of the 1970s made oil and gas the hot major on college campuses into the early 1980s. Then the price crash of 1986 occurred when Saudi Arabia abandoned its role as the world’s swing producer of oil. Newly minted engineers and technicians received pink slips and were shown the door as energy companies struggled to adapt. Many of those people left the business forever to do something else.

Word spread quickly on college and vo-tech school campuses. Oil and gas were NOT something you wanted to do for a living because, frankly, you probably couldn’t make a living. Layoffs continued into the 1990s when staff reductions became the rage in most industries. Companies sought to beef up short-term earnings by cutting general and administrative expense.

That strategy may have been penny wise and pound foolish.

That created an industry that went for nearly two decades in which there was little new blood. It wasn’t until the last few years that energy careers have been in vogue again, thanks to the unconventional plays.

One pipeline chief executive explained to me recently that the result is a critical shortage of people in the middle of their careers. In the next few years, senior employees will retire—and have to be replaced with co-workers half their age with a fraction of their expertise.

I had the opportunity to visit with Dr. Kirk Boatright, president and chief executive of Training Consultants International LLC, during Hart Energy’s recent DUG Midcontinent conference in Tulsa, Oklahoma. He confided that in his 30-plus years of conducting energy-industry training, he has never seen the demand like it is now.

The U.S. Department of Labor has had programs in place for more than a decade through its Employment and Training Administration that encourage energy industry employment. “Promoting careers in energy to the next generation of workers must be improved,” the department says bluntly in reviewing the industry’s critical personnel situation.

Industry is taking notice, too, and this issue of Midstream Business has a review of some training efforts under way.

Overall, the effort is the same: High school and college students must know we don’t make buggy whips. There is a future in oil and gas—including the midstream infrastructure to process and move it. On that they can rest easy.

Paul Hart can be reached at pdhart@hartenergy.com or 713-260-6427.

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