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Northeast Gas Association – Contractor Workshop Stamford, CT Mark Bridgers - Continuum Capital April 6, 2016 Who Will Do The Work?

Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

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Page 1: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Northeast Gas Association – Contractor Workshop

Stamford, CT

Mark Bridgers - Continuum Capital

April 6, 2016

Who Will Do The Work?

Page 2: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Meet the Panel

Mark Albert, CEO - A.G.I. Construction, Inc.

John J. Kavanaugh, Director Complex

Construction & Contractor Oversight – National

Grid

2Mark Bridgers

4/6/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 3: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Objectives

– Introduce a solutions to the question of “Who Will Do The Work?”.

Agenda

– Some History & Industry Perspective

– Thesis

– Solutions

– Market Sector Review

• Pipeline

3

Objective & Agenda

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 4: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Historic Immigration Statistics

4

Source: US Census.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 5: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Labor Participation vs. Unemployment (1 of 2)

5

Improving but still does not feel “healthy” in many places

– 242,000 jobs added in February – More than 200,000 drives down

unemployment rate very slightly

– Official Unemployment Rate = 5%

– Labor Participation down 4% since 2003-2007 peak

4%

9%

14%

19%

24%

2011 2012 2013 2014 2015

Per

cen

t

Const. UnemploymentUnemployment

66.4

62.4

62

63

64

65

66

67

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Per

cen

t

US Labor Participation Rate

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 6: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Labor Participation vs. Unemployment (2 of 2)

6

Source: McGinty, Jo Craven, “What The Unemployment Rate Really Sows,” Wall Street Journal, March 5-6, 2016, pg. 2A.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 7: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Utility Contractor Industry Perceptions

7

52.3

69.6

70.9

65.1

72.6

68.7

68.7

Q3, 2012

Q2, 2013

Q3, 2013

Q1, 2014

Q3, 2014

Q1, 2015

Q3, 2015

All Utility Contractors

Source: Proprietary Continuum analysis of utility contractor perceptions over 2012-2015.

Gas Distribution

72.2

72.6

74.4 76.7

72.9

74.2

Q2, 2013

Q3, 2013

Q1, 2014

Q3, 2014

Q1, 2015

Q3, 2015

Gas distribution very positive and high opportunity

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 8: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Utility Contractor Hiring Perspectives

Overhead and underground utility survey 2012-2015

– Hiring growth rate peaked in 2014 and remains above 4%

annually for 2015/2016

– Natural growth rate of workforce is 1.5%

8

Exhibit xWhat changes do you foresee in the number of fulltime direct employees in your organization for xxx? (excluding natural attrition,

retirements, etc.)

0%

10%

20%

30%

40%

50%

60%

70%

>-10% -10%-5% -5%-0% 0% +0%-5% +5%-10% >10%

% o

f A

ll R

esp

on

de

nts

Q3, 2012

Q2, 2013

Q3, 2013

Q1, 2014

Q3, 2014

Q1, 2015

Q3, 2015

Comparison of hiring growth from 3Q 2012 to 3Q 2015

Source: Proprietary Continuum analysis of utility contractor hiring survey feedback during 2012-2015.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 9: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Willingness To Travel For Work

Overhead and underground utility survey 2015

– Two types of contractors, those who stay home and those that

travel

• Stay Home – 150 miles/2 hour drive

• Travel – 400+ miles

9

Source: Proprietary Continuum analysis of utility contractor survey feedback during 2015.

Exhibit x How far from your existing regions/areas/offices (measured in miles) will you travel with crews to do work?

0

5

10

15

20

25

30

<10 11-50 51-100 101-200 201-300 301-400 >400

# o

f A

ll R

esp

on

de

nts

Comparison of willingness to travel for work, measured in miles

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 10: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Workforce Need

38.0% of electric and natural gas employees eligible to retire in the next decade.

The Bipartisan Policy center predicts that U.S. utilities will need to hire an additional

150,000 workers for information technology intensive roles by the year 2030.

10

31.3%29.6%

-5.9%

15.7%

-11.6%-16.0%

-14.1%-20%

-10%

0%

10%

20%

30%

40%

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

OverheadContractors

UtilityContractors

All Telecom WaterWastewater

ElectricUtility

Gas LDC PipelineOperator

Fo

reca

ste

d %

Ch

an

ge

Nu

mb

er

of

Em

plo

ye

es

All Workers 2012

All Workers 2022

Percent Change

Source: U.S. Bureau of Labor & Statistics

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 11: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Underground & Overhead

Utility Infrastructure Thesis

Who Will Do The Work?

– Thesis: That growth in spending on underground & overhead

utility infrastructure between 2008 and 2015 has stretched

resources in a way that makes continued expansion problematic

for contractors and the utilities they serve.

11

2008 Today

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 12: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

12

A Solution

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 13: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Case Study: Industrial Construction Solution

• Mission:– To improve industry performance in the areas of workforce development, work safety,

quality, and productivity..

• Vision:– To be the Center of Excellence that collaborates, cooperates, and promotes

continuous improvement in matters related to industrial construction, maintenance and manufacturing.

• Goals:– Provide Craft Labor market information - advance quality and use of regional

information. – Advance regional Workforce Development efforts - evaluate and align programs to

meet needs; connect graduates with opportunities. – Promote regional solutions - strengthen networking opportunities; identify and pursue

areas of common interest.

For more information: www.cgialliance.com

13Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 14: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Case Study: Industrial Construction Solution

7/16/13 14Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 15: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Utility Example

Vision:– Where the industry speaks with one voice for a single purpose – Companies

adequately staffed with a diverse workforce with the right skills to safely keep the energy flowing.

Mission:– Build the alliances, processes, and tools to develop tomorrow's energy workforce.

Goals:– Career Awareness - Build awareness of high skilled positions in the energy

industry.

– Workforce Development/Education - Implement short and long term education solutions to build a pipeline of skilled workers.

– Workforce Planning - Identify critical workforce needs and measure the success of workforce development initiatives.

– Member Value and Support - Support the needs of CEWD members

For more information: www.cewd.org

15Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 16: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Underground Solution

Underground Construction Workforce Alliance (UCWA)– Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution

Contractors Association (DCA - www.dcaweb.org) is initiating an effort to attack this challenge.

– Leadership team currently includes executives from DCA, NiSource, Atmos Energy, Miller Pipeline, Michels

Pipeline, and Vermeer, plus an industry lobbyist that will specifically work on obtaining federal and state

governmental support for these efforts.

– Planning team currently includes executives from:

You Can Join! If you are interested in learning how you or your firm can help lead this effort, please contact Rob Darden at

972.680.0261 or [email protected]; Mark Bridgers at (919) 345-0403 or [email protected]; or Eben

Wyman at 703-750-1326 or [email protected])

16

Construction Service Providers

Great Western Services InfraSource/Mears (Quanta) Intren MasTec North America

Michels Miller Pipeline NPL Construction Sellenriek Construction

SiteWise Corp. Snelson Western Utility

Local Distribution Companies / Utilities

Atmos Energy NiSource NW Natural Gas Piedmont Natural Gas

Material / Equipment Suppliers

Ditch Witch Groebner Vermeer

Associations, Engineers, Other Firm Types

EN Engineering GTI

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 17: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Seed An Industry Solution

Underground Construction Workforce Alliance (UCWA)

Long-Term Objective:

– Solve workforce and field leadership availability over a 10-year

time horizon covering 2015-2025.

Short-Term Objective:

– Build a coalition made up of Industry Associations, Unions,

Material / Equipment Suppliers, Engineers, Contractors, and

Utility / Pipeline firms that develop the strategy and tactics

necessary to achieve the long-term objective.

17Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 18: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Research Completed to Date

Demand: A top-down 2004-2014 historical gas and liquid pipeline spending along with 2015-2019 gas and liquid spending forecast (See Exhibit 1)

Demand: A bottom up showing states with capital spending and gas utilities by major county was viewed and discussed. The data originates from proprietary Continuum analysis of spending trends (See Exhibit 2).

Supply: Regional workforce availability today, forecast need for 2020, and forecast need for 2030 (See Exhibit 3).

Supply: County workforce availability today (See Exhibit 4)

Supply vs. Demand: A comparison of regional workforce availability compared to spending forecasts today, for 2020, and for 2030 where regional “hot spots” are highlighted (See Exhibit 5).

18

Exhibit 1

North American Gas/Liquid T&D Construction Put in Place Historical Figures and Forecasts

Millions of current dollars

10,390 12,502

18,847

27,254

38,402 40,767

36,576 36,507

43,746 47,740

52,625

45,902 44,992

48,413

56,445

65,521

29.3%

20.3%

50.8%

44.6%40.9%

6.2%

-10.3%

-0.2%

19.8%

9.1% 10.2%

-12.8%

-2.0%

7.6%

16.6% 16.1%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Canada T&D Gas/Liquid

U.S. T&D Gas/Liquid

% Change

Source: Building permits, construction put in place, and trade sources. Continuum prepared forecasts for 2015-2019.

Exhibit 2

Example County, Utility, State, and Region Gas/Liquid T&D Construction Put in Place Forecasts

Millions of current dollars

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2027

South Atlantic 6,686 7,474 8,252 8,829 7,591 7,893 8,576 10,010 12,003 14,000 16,500

WV 5.0% 413 441 380 395 429 501 600 700 825

MOUNTAINEER 57.5% 237 254 230 235 255 288 345 403 474

Kanawa (Charleston) 55.0% 130 140 126 129 140 158 190 221 261

Berkley (Far Northeast WV) 45.0% 107 114 103 106 115 130 155 181 213

SOUTHERN PUBLIC SERVICE 35.0% 144 155 139 144 152 175 210 245 289

Kanawa (Charleston) 55.0% 79 85 76 79 84 96 116 135 159

Cabell (West of Charleston) 45.0% 65 70 62 65 68 79 95 110 130

Gathering & Transmission Work 7.5% 31 33 11 16 21 38 45 53 62

Hancock 13.3% 4 4 2 2 3 5 6 7 8

Brooke 13.3% 4 4 2 2 3 5 6 7 8

Ohio 13.3% 4 4 2 2 3 5 6 7 8

Marshall 13.3% 4 4 2 2 3 5 6 7 8

Wetzel 13.3% 4 4 2 2 3 5 6 7 8

Tyler 3.3% 1 1 0 1 1 1 2 2 2

Doddridge 3.3% 1 1 0 1 1 1 2 2 2

Plesants 3.3% 1 1 0 1 1 1 2 2 2

Ritchie 3.3% 1 1 0 1 1 1 2 2 2

Wirt 3.3% 1 1 0 1 1 1 2 2 2

Calhoun 3.3% 1 1 0 1 1 1 2 2 2

Roane 3.3% 1 1 0 1 1 1 2 2 2

Kanawha 3.3% 1 1 0 1 1 1 2 2 2

Lincoln 3.3% 1 1 0 1 1 1 2 2 2

Boone 3.3% 1 1 0 1 1 1 2 2 2

Exhibit 3

U.S Pipeline Labor Available Today, Forecast Need in

2020 and 2030

Source: Continuum and CLMA analysis of 2013 U.S. Bureau of Labor Statistics

69,000

13,000

4,700

30,000

27,000

Combined Workforce

Breakdown

Field Prodcution Staff Foreman & Supers

Construction Managers Other Field Support

Office & Management

5,750

23,000

6,651

2,405

15,349

13,814

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Additional Labor Needed by 2020

Office & Management

Other Field Support

Construction Manager

Foreman/Super

Field Production Staff

Crews

11,000

44,000

11,186

4,044

25,814

23,233

- 10,000 20,000 30,000 40,000 50,000 60,000

Additional Labor Needed by 2030

From Today:

2020 = 5,750 Additional Crews

2030 = 11,000 Additional Crews

Exhibit 4

County by County Pipeline Workforce Availability Today

Millions of current dollars

US Pipeline Workforce by County Year Colors

0 or no data

< 10

11 to 30

31 to 60

61 to 100

101 to 200

201 to 400

401 to 600

601 to 1000

> 1000

Source: Bureau of Labour Statistics (http://www.bls.gov/home.htm)

Exhibit 5

U.S Forecast Labor Need Today, 2020, and 2030

Source: Continuum and CLMA analysis of 2013 U.S. Bureau of Labor Statistics

(www.bls.gov) data for NAICS 23712 Oil and Gas Pipeline Construction, CLMA proprietary

data, industry interviews, and proprietary Continuum information and forecasts.

3 Hot Spots

5 Hot Spots

Due To:• Transmission

lateral

• NGL and shale

oil transmission

• Distribution

replacement

• Housing starts

accelerating

3 Hot Spots

Due to:• Interstate

transmission

replacement

• DIMP activity

• Early plastics

replaced

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 19: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Workforce Development Strategy &

Structure

Five core concepts that require attention to create a

successful and impactful workforce development strategy

1. Forecasting supply (labor & supervision availability) and

demand (capital spending)

2. Awareness & Recruiting

3. Training

4. Placement

5. Retention & Career Development

19Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 20: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Preliminary Strategy (1 of 2)

20

A 5-year strategy built around addressing 2-4 high priority

regional labor availability needs by 2020

A 10-year strategy built around more effectively attracting

individuals to enter our industry and workforce

Preliminary Vision, Mission, & Goals

– Preliminary Vision: A consistently staffed pipeline workforce for

the foreseeable future

– Preliminary Mission: Identify regional gaps in pipeline workforce

availability and close these gaps through industry awareness,

attraction, placement, and retention to yield a lifelong career

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 21: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Preliminary Strategy (2 of 2)

21

Preliminary Vision, Mission, & Goals (Continued)

– Preliminary Goals/Strategies (Three Leg Stool Concept):

• Regional and local forecasting of supply (labor & supervision availability)

and demand (capital spending)

• Raise awareness and accelerate ability to effectively recruit against

industries other than construction

• Build common and consistent training platform and endorsement program

– Potential Measures of Success:

• Cause future employees to self-select out during education rather than

after employment

• Build clarity on graduate skill level and experience

• Number of graduates (by nationally, regionally, by state?)

• Number of hires

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 22: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

What Do The Results Look Like?

Clarity around where, when, and how large regional labor availability challenges

exist

– Potentially additional research into “hot spots” to better understand specific needs

A Planning Team of approximately 20 individuals and Implementation Teams

responsible for developing and implementing strategy, tactics, and actions

22

Exhibit 6

Proposed Organization & Governance Structure

Leadership Team

(8-10 Individuals)

Planning Team

(20+ Individuals)

Implementation

Team 2

Implementation

Team 1

Implementation

Team 3

Implementation

Team …n

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 23: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Financial Management Plan

Marketing to recruit participants to and support of this effort– Tier 1: Previous or current volunteers.

– Tier 2: Targeted Industry Associations, Unions, Material / Equipment Suppliers, Engineers, Contractors, and Utility / Pipeline firms – approximately 150 firms or organizations preliminarily identified.

– Tier 3: Broad information distribution to overall industry.

Accumulate approximately $500,000 in funding annually and $3-5 million in funding over 10 years. – Anticipate participation of 75 industry entities including

Associations, Unions, Material / Equipment Suppliers, Engineers, Contractors, and Utility / Pipeline firms

23Mark Bridgers

4/4/2016

Who Will Do The Work? April 4, 2016 Planning Meeting

www.ContinuumCapital.net

Page 24: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

What Do The Results Look Like? (4 of 4)

24

General Utility Construction & Maintenance Training Program

Basic Computer OSHA 10 Class A CDL

(with tanker

endorsement)

Plan & Blueprint

Reading

Power

Awareness

Work Zone

Safety

Utility Locating One Call

Basic Permit

Requirements

Construction

Math

Underground Utility Training Program Overhead Utility Training Program

Pipe Fusion Shoring &

Trench Safety

Asset

Separation

Environmental

Impact

Pole Climbing Basic Aerial Bucket & Digger

Derrick

Operation

Advance Power

Awareness

Trenching

Techniques

Direction Boring

Operation

Cross Bore Risk

Management

Enclosed/

Confined Space

Pole Attachment

Points

Pole Setting &

Replacement

Water/Sewer Broadband Electric Pipeline Broadband Electric Dist. Electric

Trans.

Other

Overhead

Heavy

Equipment

Operation

Light Equipment Operation Cable Stringing

Tunneling Fiber Splicing Cable Pulling Steel & Alloy

Welding

Fiber Splicing Energized vs. Non-Energized

Cable Blowing Copper Splicing Pressure Testing Line Splicing

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 25: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Practical Training Examples

25

State Technical College of Missouri (www.statetechmo.edu)– Collaboration Opportunity

• Networking Systems Technology

• Electrical Distribution Systems

• Heavy Equipment Operations

• Welding Technology

– Program Objectives• Cause future employees to self-select out during education rather than after employment

• Build clarity on graduate skill level and experience

Northeast Wisconsin Technical College (www.nwtc.edu)– Leverage Opportunity

• Gas Utility Construction & Service

– Program Objectives• Train individuals to become gas distribution worker, gas service person, gas meter and

regulation mechanic, gas clerk-estimator, gas inspector, gas appliance repair mechanic, underground facilities locator, pipeline welder, pipe layer, PE pipe fusion, and equipment operator.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 26: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Next Steps

May 2016

– Planning meeting to be scheduled with focus on finalizing implementation plan

June 2016

– Planning meeting to be scheduled with focus on stand and deliver session and status

update

– Begin process of requesting funding and other support for “Who Will Do The Work”

initiative

August 2016

– Planning meeting to be scheduled with focus on stand and deliver session and status

update

October 2016

– Planning meeting to be scheduled with focus on stand and deliver session and status

update

26Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 27: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Workforce Availability Perspectives & Information

Distribution & Transmission Pipeline

Page 28: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

State Specific Drivers of Pipeline Spending

28

5 Hot Spots

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 29: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

North American Pipeline Spending

Overview

29

US Gas & Liquid, Transmission & Distribution

10,390 12,502

18,847

27,254

38,402 40,767

36,576 36,507

43,746 47,740

52,625

45,902 44,992

48,413

56,445

65,521

29.3%

20.3%

50.8%

44.6%40.9%

6.2%

-10.3%

-0.2%

19.8%

9.1% 10.2%

-12.8%

-2.0%

7.6%

16.6% 16.1%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Canada T&D Gas/Liquid

U.S. T&D Gas/Liquid

% Change

Source: Building permits, construction put in place, and trade sources. Continuum prepared forecasts for 2015-2019.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 30: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

US Gas& Oil Pipeline Wave Drivers

30

Wave 1

2008-2013

Wave 2

2016-2021

Wave 3

2025-2030

Wave 4

Beyond 2031

Trans. Integrity & Dist.

Replacement

Industrial & Power Gen

Renaissance

Trans. Replacement &

Dist. Integrity

The Cliff

• $32 to $43 billion (+34%) • $43 to $65 billion (+49%) • $65 to $80 billion (+23%) • $80 to $45 billion (-44%)

• Shale gas and oil

exploration expansion

• Interstate transmission

network expansion

• TIMP acceleration of

activity

• Distribution replacement

programs start

• DIMP plan preparation

• Transmission and high

pressure distribution

lateral construction

• NGL and shale oil

transmission system build

out – Replacement for rail

transport

• Distribution replacement

programs accelerating

• Housing starts

accelerating

• Interstate transmission

replacement programs

accelerating

• DIMP acceleration of

activity

• Early distribution plastics

replaced

• Rising natural gas prices

increase domestic gas

production

• Transmission

replacement activity slows

• 100 years of distribution

infrastructure replaced in

20 years

• Industrial/Power/Export

infrastructure complete –

modest to no growth

• Housing starts tempered

by low population growth

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 31: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Today:

Contractor Oil & Gas Pipeline Workforce

31

Source: Continuum analysis of 2013 U.S. Bureau of Labor Statistics (www.bls.gov) data for NAICS 23712 Oil and Gas Pipeline Construction, industry interviews, and

proprietary Continuum information.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 32: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Today:

Gas Utility Construction Workforce

32

Source: Continuum analysis of 2013 U.S. Bureau of Labor Statistics (www.bls.gov) data for gas distribution utilities, industry interviews, and proprietary Continuum

information.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 33: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Today: Combined Underground

Workforce – 17,000 Crews

33

Field production staff consist of the following

– Construction Laborers

– Operating Engineers and Other Construction

Equipment Operators

– Plumbers Pipefitters and Steamfitters

– Helpers--Pipelayers Plumbers Pipefitters and

Steamfitters

– Welders Cutters Solderers and Brazers

Foreman & Superintendents are classified as

first-line supervisors of construction trades

Other field support includes truck drivers,

inspectors, mechanics, pavers, landscapers,

etc.

Assuming 4 staff per crew on average equals

17,000 available crews

69,000

13,000

4,700

30,000

27,000

Combined Workforce

Breakdown

Field Prodcution Staff Foreman & Supers

Construction Managers Other Field Support

Office & Management

Source: Continuum analysis of 2013 U.S. Bureau of Labor Statistics (www.bls.gov) data for NAICS 23712 Oil and Gas Pipeline Construction and gas distribution utilities,

industry interviews, and proprietary Continuum information.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

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Today:

Pipeline Supply vs. Demand

34

Labor supply versus today’s

regional spending:

– New England – Critical

– Pacific – Critical

– Middle Atlantic – Challenging

– East North Central – Challenging

– South Atlantic – Challenging

– West North Central - Challenging

– East South Central – Challenging

– Mountain – Manageable

– West South Central – Manageable

3 Hot Spots

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 35: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Future Pipeline

Labor & Management Need?

35

5,750

23,000

6,651

2,405

15,349

13,814

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Additional Labor Needed by 2020

Office & Management

Other Field Support

Construction Manager

Foreman/Super

Field Production Staff

Crews

11,000

44,000

11,186

4,044

25,814

23,233

- 10,000 20,000 30,000 40,000 50,000 60,000

Additional Labor Needed by 2030

From Today:

2020 = 5,750 Additional Crews

2030 = 11,000 Additional Crews

Source: Continuum analysis of 2013 U.S. Bureau of Labor Statistics (www.bls.gov) data for NAICS 23712 Oil and Gas Pipeline Construction and gas distribution utilities, industry interviews, and proprietary Continuum information.

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 36: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

2020:

Pipeline Supply vs. Demand

36

5 Hot Spots

Due To:• Transmission

lateral

• NGL and shale

oil transmission

• Distribution

replacement

• Housing starts

accelerating

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 37: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

2030:

Pipeline Supply vs. Demand

37

3 Hot Spots

Due to:• Interstate

transmission

replacement

• DIMP activity

• Early plastics

replaced

Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 38: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Thank You

MARK BRIDGERS

shipping: mailing:

405 Forsyth Street PO Box 31026

Raleigh, NC 27609 Raleigh, NC 27622

www.ContinuumCapital.net

919.345.0403

[email protected]

Twitter: @MarkBridgers

Skype: mark.bridgers.continuum

LinkedIn: www.linkedin.com/pub/mark-bridgers/12/9b4/81

Page 39: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Meet the Panel

Mark Albert, CEO - A.G.I. Construction, Inc.

John J. Kavanaugh, Director Complex

Construction & Contractor Oversight – National

Grid

39Mark Bridgers

4/6/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 40: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Who Will Do The Work?

Topic 1:

– Workforce and Supervisory Challenges

Focus:

– To discuss the observed challenges from each

panel participant’s perspectives

40Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 41: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Who Will Do The Work?

Topic 2:

– Workforce and Supervisory Solutions

Focus:

– Discuss the solutions that you are implementing

and specifically the Underground Construction

Workforce Alliance (UCWA) that the DCA is

attempting to build

41Mark Bridgers

4/4/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 42: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Thank the Panel

Mark Albert, CEO - A.G.I. Construction, Inc.

John J. Kavanaugh, Director Complex

Construction & Contractor Oversight – National

Grid

42Mark Bridgers

4/6/2016

2016 Who Will Do The Work

www.ContinuumCapital.net

Page 43: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Thank You

MARK BRIDGERS

shipping: mailing:

405 Forsyth Street PO Box 31026

Raleigh, NC 27609 Raleigh, NC 27622

www.ContinuumCapital.net

919.345.0403

[email protected]

Twitter: @MarkBridgers

Skype: mark.bridgers.continuum

LinkedIn: www.linkedin.com/pub/mark-bridgers/12/9b4/81

Page 44: Who Will Do The Work? - Northeast Gas Study: Industrial ... – Recognizing that their membership wanted an answer to the question, who will do the work?; the Distribution ... Unions,

Mark founded and leads a Utility Vertical Market team team at Continuum Capital. He

works with gas/electric utilities, power generators, pipeline companies, and energy

companies. As a recognized expert in capital construction and operational challenges,

Mark was recently honored with membership in the Society of Gas Operators (SOGO).

Mark helps firms prepare for and successfully navigate “strategic transitions.” His passion

is helping organizations achieve breakthrough innovations through collaborative or

integrated relationships. He is the architect of an approach for integrated service provider

management referred to as the “Extended Enterprise” among construction industry

participants.

Mark Bridgers

Mark is an avid educator, trainer, and writer with more than 20 years of industry expertise including financial

performance analysis; development and implementation of tools to reduce construction cost, life-cycle cost, and

operational friction; restructuring of processes and procedures - often times using LEAN Construction

techniques; and leader development.. He is a recognized expert in capital construction and operational

challenges . Mark is also author of over 150 articles and research papers published internationally in industry

journals, including ENR, PE – The Magazine for Professional Engineers, Pipeline & Gas Journal, Utility

Contractor (NUCA), Underground Contractor, Electric Energy (RMEL) and Electric Perspectives (EEI).

Mark holds a master’s degree in business administration from the University of Virginia’s Darden school of

Business and a bachelor’s degree in financial management from Clemson University. In addition, he earned the

designation of Chartered Property and Casualty Underwriter (CPCU) and Associate in Reinsurance (ARe).