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Oil patch musters its scattered work force

As the U.S. oil and gas industry continues to assess damage and restore massive outages of Gulf coast production and refining capacity, much attention has been paid to assessing the physical damage. But the oil patch is wrestling with another critical problem: How to manage the huge disruption to a work force that has been scattered across the Southeast.  -- By's John W. Schoen
Valero Energy Corp. mechanic Ronald Lewis, displaced by Katgrina, now calls the company's St. Charles refinery home, where he sleeps on a cot in the plant's office building. His wife and two daughters, along with other family members, are scattered across Georgia and Mississippi. Haraz N. Ghanbari / AP
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As the U.S. oil and gas industry continues to assess damage and restore massive outages of Gulf coast production and refining capacity, much attention has been paid to assessing the physical damage. But the oil patch is wrestling with another critical problem: How to manage the huge disruption to a work force that has been scattered across the Southeast.

For some, work and home have become the same place. Dozens of workers at Valero Energy’s  St. Charles refinery in Norco, La. were displaced from their homes by the storm. Some are staying with co-workers. Dozens of others, along with families and pets, are sleeping in a complex of trailers and cots at the plant that makes up a new community they’ve dubbed "Valeroville."

Valero mechanic Ronald Lewis sleeps on an inflatable mattress inside the plant's main office building. Though his future is still uncertain, being at work helps him forget about the damage Hurricane Katrina did to his home and community, he told the Associated Press.

"It's lonely," said Lewis, whose wife, two daughters and about 20 other family members are scattered across Georgia and Mississippi. "I'm just glad to be at work.”

Some 45,000 oil industry workers — from plant operators to maintenance crews to engineers — lived and worked in the Gulf region laid to waste by Katrina. For the last two weeks, much of the initial recovery effort has been focused on simply finding those employees and determining that they are safe.

“We took out full page ads — in the areas where there were still newspapers operating — and radio and TV ads giving out a toll-free number to call,” said Chevron spokesman Mickey Driver.

As of this week, all but a few of Chevron’s 3,700 workers in the effected areas had been accounted for. Now, facilities managers are trying to figure out how to house and care for workers left homeless by the storm.

Chevron set up a tent city about a mile from its refinery complex in Pascagoula, Miss. to house some 300 workers and their families, along with hundreds of others brought in from other Chevron locations to clean up the mess. The refinery remains offline, and the company said earlier this week that it’s too soon to estimate how long it will take to restart it.

For those who’ve returned to work, it’s been anything but business as usual. Once the shock of seeing the damage has worn off, it’s hard to know just where to start. The task of cleaning up and repairing such widespread damage to refineries, pipelines, processing stations and drilling rigs is unlike anything the industry has faced.

Snakes and alligators
Returning crews need to be ready for surprises, according to Rayola Dougher, manager for energy market issues at the American Petroleum Institute.

“A year ago, when Ivan came through there was one control room where the first thing they had to do was get rid of the alligators and snakes before they could get to work,” she said.

Hundreds of miles of underwater pipelines must be inspected and repaired, a handful of drilling rigs require major rebuilding, some gas processing stations remain flooded and four large refineries remain shut down after sustaining heavy damage. With all that rebuilding happening at once, some of the parts and equipment needed to complete the job will be in short supply.

For the hundreds of workers assigned to offshore drilling platforms, for example, getting back to work has been hampered by operational bottlenecks effecting the helicopters and ships that ferry them back and forth to work.

Reassembling offshore work teams also has been complicated by the dispersal of those forced from their homes by Katrina. Now, as the oil patch rebuilds, companies may rethink where they relocate the staging areas used to shuttle their offshore workers back and forth, according to David Dismukes, a professor at the Center for Energy Studies at Louisiana State University

“You had people prior to (the mid-1980s) working from everywhere from Brownsville, (Tex.) all the way over to Panama City, (Fla.) -- all across the Gulf coast working to support the offshore oil and gas production industry,” he said. “And that has whittled down considerably since that time period and has concentrated in Texas and Louisiana. So you may see it spreading out the way it used to be.”

Workers at onshore facilities will have to find temporary shelter closer to work. ExxonMobil has about 1,000 workers that live in areas hit hard by Katrina, many of them left homeless by the storm. Some have been relocated to company-provided housing near Baton Rouge.

Many of them worked at Exxon’s Chalmette, La. oil refinery just outside New Orleans, which has been shut down since the storm and was still under six feet of water as of Monday. It will be early next month before the area will be pumped dry, according to the Army Corps of Engineers. So it’s too soon to know how many workers plan to return to Chalmette, according to an Exxon spokesman.

Even once the mess is cleaned up, restarting an oil refinery — a complex maze of tanks and pipelines designed to cook a highly flammable substance under extremes of heat and pressure — is not as simple as firing up an assembly line. Finding leaks or faulty sensors can be a painstaking process.

On damaged offshore drilling rigs, hundreds of miles of underwater pipelines need to be checked for leaks before production can be restarted. All of these facilities rely on experienced workers who are knowledgeable about how a particular plant operates.

“You can’t just go off the street and hire day laborers to come in and run a drilling platform,” said Emil Pena, a former senior U.S. Energy Dept. official and now a private industry consultant. “You have to put them through at least a safety program to know what the heck they’re doing. It’s dangerous work. It’s not easy.”

The blow to the Gulf oil industry’s workforce comes at a time when the industry is already coping with severe shortages of skilled workers in critical areas.

Though the oil industry is in the midst of one of the biggest boom cycles in a long history of ups and downs, the 1980s and 1990s brought a sharp consolidation, along with a wave of mergers and a big contraction in the workforce.

“If you look at the (oil) price crashes after 1986, and what happened to workers after that time period, a lot of them threw in the towel and said, ‘I’ve had enough.’ --  throughout the Gulf coast,” said Dismukes.

From a peak of some 860,000 workers in 1982, the oil patch lost over half a million jobs in the next two decades, according the American Petroleum Institute. That contraction, along with the uncertainties about the prospect of future layoffs, discouraged an entire generation from pursuing a career in the industry, according to a May, 2005 API report.

The drought of new, qualified workers continues. Companies representing about a sixth of the industry told the API they’ll need more than 5,000 petroleum engineers in the next five years. But as of 2003, there were only 1,500 students enrolled in petroleum engineering programs in the U.S., the report said.

And, with an average age of 51, many in the workforce are nearing then end of their careers. Companies surveyed by the API said that nearly a quarter of workers with critical skills will be eligible for retirement over the next four years.

That’s why oil companies are going all out to provide for displaced workers and provide them with plenty of incentives to stay with the industry.

“They’ll be real hard to replace,” said Dismukes. “But companies are going to be paying a lot to get people out there at these kind of (oil and gasoline) prices.”