Monday, April 05, 2010

Burgh Energy Report: Uncertainty

Another drag on the Marcellus Play is the novelty of unconventional natural gas. The boom in Oklahoma City doesn't map neatly onto Pittsburgh. Forecasting is hard enough, but the fact remains that no one knows for sure what the rush will bring. Via the Houston Chronicle energy blog, the DOE is revising its production projections:

The EIA has been overtaken by advances in technology, oil-shale finds and changes in the industry and has been less able to account for smaller companies that increase or decrease production. Some commodities analysts and gas producers, such as EOG Resources Inc., have long suspected that the EIA has overstated domestic natural-gas output--a factor they argue has helped push prices to seven-year lows in 2009.

The news could bode well for the energy industry in SW Pennsylvania. It also underscores the shaky terrain for investment. That said, billions of dollars in bets are already on the table. On the other hand, even the biggest commitments aren't guarantees.

I still think it is a good idea to seek training for energy jobs. The labor market is filled with its own uncertainties. The main concern I'm seeing is talent supply:

Even without an energy bill out of Washington, a green economy is emerging in California. And once demand gets rolling, green growth could power the state's economic recovery. At that point, it won't be technology or political will or even money that is holding back the green boom. As paradoxical as it sounds with unemployment in double digits, the green economy is facing a talent shortage.

Where to find the talent? Green conjures images of youth, but a study released this week by MetLife Foundation and Civic Ventures finds that the skills of Baby Boomers looking for encore careers are a good fit with the need for weatherization crew leaders, solar contractors and trainers, energy auditors and other roles that expand job opportunities for people of all ages. Make no mistake: Green jobs, like all jobs, are still in short supply. California has 159,000 green jobs, according to a study last year by Next 10 and Collaborative Economics, and green employment grew 5 percent between 2007 and 2008, even as total jobs fell.

But real job growth won't kick in without stronger consumer demand. Contractors can't afford to hire new workers without actual orders. Without a clear understanding of the benefits, home and business owners have been reluctant to invest. Training has been hampered by the lack of clear standards.

Sorting out the energy economy picture is tough right now. There is time to retool the regional workforce and prepare for the boom. Companies will go where the talent is located and training doesn't happen overnight.

No comments: