LOGA Industry Report - Fall 2008 - (Page 14)

Now That We Have The Work, Who Is Going To Do It? The Haynesville Shale discovery gives rise to a practical problem that many oil and gas operators are all too familiar with: Where are companies going to get employees to handle the work? Widespread worker shortages have become a fact of life in the oil and gas industry in Louisiana and throughout the United States. One need not look far to see that the United States is heading toward a widespread labor shortage. According to the U.S. Bureau of Labor Statistics, more than 25 percent of the working population will reach retirement age by 2010, resulting in a potential worker shortage of nearly 10 million. By 2030, an unprecedented 20 percent of the population will be over age 65. The energy industry is being hit particularity hard by this “graying of the workforce.” One indication is the demographic breakdown of the membership in the Society for Professional Engineers; the average age remains over 45. The attrition of older professionals is exacerbated by the lack of students to pull from. According to a 1999 National Petroleum Council study, undergraduate petroleum engineering and geoscience degree programs declined 77 percent and 60 percent respectively between 1985 and 1998. A number of studies have been commissioned on the difﬁculty in attracting young professionals to careers in the oil and gas industry. “Image” is typically the main issue cited. Ask the average American what he or she knows about the oil and gas business and invariably the answer is the Exxon Valdez or J. R. Ewing (assuming they’re at least 20 years old). Another problem is the cyclical nature of the oil and gas industry and the history of widespread layoffs, which has made young workers reluctant to enter the industry. These problems are systemic and will take a considerable amount of time and effort to change. In the meantime, employers have labor needs now. The following are a couple of potential shortterm suggestions that have been used by other oil and gas employers struggling to satisfy their labor demands. Think Outside the Box on HR Practices Obviously, increased pay makes a job attractive; however, many employers are realizing that another way to attract employees is to be creative in human resources practices. For instance, many employers have had a considerable amount of success in retaining older employees or luring workers out of retirement by offering something they crave – ﬂexibility in scheduling. All sorts of ﬂex scheduling possibilities exist and have been utilized with considerable successful in the health care ﬁeld, which has struggled with its own labor shortages. Going a step further, unable to ﬁnd employees willing to relocate to the worksite, Canadian Natural Resources ﬂies their workers from southern Alberta directly to the oil sands project it is developing. Workers reside in on-site camps during their tours and are then ﬂown back south. While the permutations may vary, the underlying theme is the same: employees value money, but they also value other things. Find out what those are and be willing to be creative and attempt to accommodate them. Scott Schnerider Fisher & Phillips LLP Utilize Foreign Workers One way to increase the labor pool is to look outside of the Unites States for employees. There are various visa programs employers have utilized to bring in oil and gas workers from other parts of the world. While the demand for these visas always exceeds the government-allocated quota, this is certainly an attractive avenue worth exploring. It is an approach other oil and gas hot spots have utilized to ﬁll their labor needs. Just by way of example, wells on Colorado’s Western Slope are now being drilled by crews and rigs from China. Similarly, in Canada’s Athabasca oil sands region, engineers and workers are being relocated from Mexico. While employing foreign workers gives rise to a host of practical problems (language barriers chief among them), companies have relied on them for years and the reliance should only grow, especially if the federal government raises its visa allocations in upcoming years. Scott Schneider is a partner with the New Orleans ofﬁce of national labor and employment law ﬁrm Fisher & Phillips LLP. He can be reached at (504) 529-3844 or sschneider@laborlawyers.com. You’re so Right, Mr. Obama! Windfall Profits Should Be Taxed and Taxed Heavily. After all, past a certain point, success is just unseemly even unpatriotic. Our capitalist system is set up to reward the risk taker. An investor may be entitled to a handsome rate of return, to be sure, but isn’t it enough to double, or even triple your money? Most right-thinking folks would certainly agree. Any more than that is pure greed. Obscene proﬁts. Filthy lucre. Those greedy capitalists are stealing from all of us! Of course, those ill-gotten gains cannot be easily restored to the consuming public. What we need is for the government to collect the spoils, in the form of a Windfall Proﬁts Tax. And who’s better at spending money than the government? We can certainly count on government to promote the general welfare, etc., all for the common good. And the greedy capitalists can hardly object! They beneﬁt unfairly from their position in a highly proﬁtable, indispensable industry, with customers with an insatiable demand. They have erected terriﬁc barriers to entry. Surely, they will be satisﬁed with the portion the government deigns to let them keep, and they will keep cranking out the product for mass consumption, just because that’s what they do. 14 | LOGA INDUSTRY REPORT | FALL 2008

Table of Contents Feed for the Digital Edition of LOGA Industry Report - Fall 2008

LOGA Industry Report - Fall 2008 Contents Chairman's Corner President's Perspective Commissioner's Comments From the Pipeline... Supreme Court Upholds Act 312 LOGA Challenges Commission's Ad Valorem Tax Rules The Haynesville Shale - Waiting for the Gas to Come In 2008 Legislative Recap Gulf Coast Prospect Expo 2008 2nd Annual LAGCOE Open Golf Tournament Conservationist by Trade Katrina Relief Fund Update DNR Intent Natural Gas Production Surges: A Free Market At Work IPAA Washington Report Legal Updates New Members Index to Advertisers

LOGA Industry Report - Fall 2008

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