International

Welders in US make over $100 an hour in fracking fuelled building boom

13 December 2014
Shale gas is causing a spike in demand for specialized skills not needed in such quantities for years (PO3 Patrick Kelley/Wikimedia Commons)
10 December 2014 | By Rod Sweet

Welders and pipe fitters in the US are getting rich.

They are able to command wages of more than $100 a hour amid an industrial building boom sparked by shale gas production.

Approximately $133bn worth of building work on 215 chemical plants is now underway in the US, causing a huge spike in demand for specialized skills that have not been needed in such quantities for many years. 

Natural gas, now produced in abundance by hydraulic fracturing, or “fracking”, is a raw material for plastics, fertilizer and paints.

The gas glut has also driven down the cost of electricity produced at gas-fired power plants.

This combination of factors has caused manufacturers to flock to states where fracking is going on, such as Louisiana.

An example is Methanex Corp., which decided to dismantle two petrochemical plants in Chile and rebuild them in Louisiana. 

Its chief executive, John Floren, told Bloomberg that the project has run at least $300m over budget partly because of the inflated labour costs.

“We’re all competing for the same limited workforce,” Floren told Bloomberg. “The only way to address that is train people, which takes time, or bring in foreign workers, which is not allowed.”

Other companies are saying the same.

“It’s a shocker,” said Nassef Sawiris, CEO of OCI (OCI) NV, in an interview with Bloomberg.

Sawiris said his company is over budget at a new nitrogen fertilizer plant under construction in Iowa because of labour costs, and that he’s having trouble finding skilled workers at a methanol plant in Texas is supposed to open in 2016.

He believes companies are now putting building plans on hold because of the labour shortage.

“There were like 10 projects announced after our project got started,” Sawiris said. “None of them in the last 18 months has hit the ground.”

Photograph: Shale gas is causing a spike in demand for specialized skills not needed in such quantities for years (PO3 Patrick Kelley/Wikimedia Commons)

Comments

Innovative and fit for purpose mechanization can in many
instances be successfully applied to speed up progress and to make up for the present
skills shortage and in addition
by standardising of component
and plant design and layout, production line economies can be realised!

Mr Jose' Scalabrino MCIOB, 6 January 2015

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