Permian Future Workforce
The old saying is you raise your kids in Midland, TX and you raise hell in Odessa
Ector County Independent School District(ECISD) held its first committee meeting on February 1st formed to help research and develop programs and a new facility footprint, including equipment and capacity, for the new Career and Technical Education(CTE) building that will begin construction in January 2024. The committee was formed utilizing expertise from district employees, independent business owners, large oil and gas companies, and organizations like the Texas Workforce Commission(TWC) and Permian Strategic Partnership(PSP). Energy is everything in West Texas and especially the Permian Basin where Odessa, TX is the heart of the blue collar workforce that feeds the area. With the recent passage of two school bonds for the sister cities Midland and Odessa in November 2023, a large consideration of $80M devoted solely towards a new CTE facility was brought to voters and passed. Comparing the CTE programs of the 2 cities quickly puts into perspective the focus ECISD(Odessa) has on technical training vs Midland Independent School District(MISD) where one example of the welding program shows roughly 30 seats available in MISD while ECISD capacity is 400 and still turn away students every semester.
The old saying is you raise your kids in Midland and you raise hell in Odessa but based on the focus of the recent bonds passed between the two cities, we in Odessa are raising the next generation of workforce for the entire Permian Basin with the technical knowhow to the energy industry. The director of CTE in ECISD, Ryan Merritt, has already begun developing a new program with a focus on oil and gas including studies in Derrick Operation, Petroleum Pump Systems, Rotary Drill Operator, Roustabouts, and Service Unit Operators. One of the charges of the committee is to help add or eliminate programs that will be housed in the new facility as well as make recommendations to the district and its board of what programs must be at the new center and which ones can remain at the current highschools or Odessa College through their partnerships. While a large voice from PSP is present, the vision of having smaller partnerships across the energy industry with the district to help develop these programs, provide input for future workforce growth, donate equipment/time to the facility for instruction on their specific needs, and create an ongoing alliance that benefits the entire area much like the Big Country Manufacturing Alliance in West Central Texas.
According to PSP, the projected growth and replacement for the workforce in the Permian basin is projected at 190,913 by 2040 where rapid growing sections such as engineering, extraction workers, mechanics, and truck drivers will be the largest shortfall for the area in relation to the energy sector. A key issue when analyzing the needs of the area is workforce replacement where a generation of skilled laborers such as plumbing, HVAC, and electrical are aging out of the workforce and a lack of recruitment into those fields has increased the shortfall. Over the past 2 decades the Permian Basin has been riddled with cycles of boom and bust that have left a bad taste in the mouth of many in the region. While the majority of the United States has been in a perpetual bull market led by the infusion of cash through nearly free interest rates by the federal reserve and up and to the right mentality for all stocks, even during a pandemic, this hasn’t been the case for a region whose economy lives and dies based on the price of oil and natural gas.
The new CTE facility in Odessa, TX will be located near the corner of South Murphy and Meadow Ave. in a booming industrial district with industry neighbors such as Warren Cat(Caterpillar), Sivalls Manufacturing, Saulsbury Industries, Cudd Energy, NexTier, and many more. The purchase price of the land was originally budgeted into the the current facilities $80M price tag but prior to election Grow Odessa donated the nearly 40 acre plot which will help alleviate some funds that will go back into the construction and equipment within the facility.
The location of the facility was chosen with the intention of leveraging the surrounding businesses for both student education as well as continued education opportunities within the facilities soon to be state of the art footprint for continued education and training of employers’ current workforce. This is where the partnerships outside of PSP can have a huge impact for employers to leverage and foster in their desired workforce while working directly with the district to incorporate their needs. Nabors Industries has added scenario-based simulator to their training program to introduce drillers to potential high-hazard environments managing dynamic situations without having to learn the hard way on the job. Utilizing flexible space with simulators such as this one can bring a huge advantage to the younger workforce and add a needed element of safety and efficiency for the employer which hopefully is motivation enough to coordinate an alliance of smaller employers that are willing to help provide industry specific tools and equipment to ECISD and guarantee more seats and larger output of trained workforce within the facilities budget.
PSP has already committed to a large cash donation for the CTE facility that would match or be larger than their donation to the build out of the Hobbs, NM facility where they contributed $10M but the final amount has yet to be announced. ECISD’s CTE new facility will have a permanent capacity of 400 students that will call this center their high school and 2,000 students will be bussed in daily to participate in career based studies part-time compared to the Hobbs facility that has a total capacity of 600-700 students. Since the original commitment statement by PSP towards ECISD to match the Hobbs donation, PSP has increased its outlook on the potential growth of the Permian Basin substantially and would be hard pressed to not consider contributing much more towards the Odessa facility. ‘If you go back in time, Texans have been supplying the world with the energy needed to fuel their cars, power their homes, and produce the products that we all need,’ said Texas Governor Greg Abbott in a roundtable discussion with stakeholders of Champion-X in Odessa in March of 2022. ‘Fossil fuels are essential for the operation of the entire globe in conjunction with alternatives such as renewables,’ said Abbott. ‘What we need to do here in Texas is to increase the amount of oil and gas we are producing to help our fellow Americans, as well as to help our friends across the entire world.’ Politics and industry leaders seem aligned in the energy sector and with the opportunity to build the most advanced and state of the art CTE facility in the state of Texas on the shoulders of industry giants and smaller private industry collaboration and commitments.
The Permian Basin has created the most impact on energy security for not only the United States but globally adding substantial barrels to the market in some of the cleanest and most well regulated fields in the world. According to the EIA, the Permian has added more production growth than all other lower 48 US basins combined for the better part of the last decade.
With the addition of other projects to the area such as the proposed Nacero Plant that is slated to produce sustainable aviation fuels(SAF) from natural gas located in West Ector County and support alleviated capacity bottlenecks for the Waha Hub and the already under construction 1PointFive Carbon Capture plant the Permian is continuing its heritage as a leader in all things energy. According to their website Nacero's Penwell facility will convert billions of British thermal units (Btus) of renewable natural gas and associated gas from the Permian into over 1 billion gallons of SAF (sustainable aviation fuel), LCAF (Lower Carbon Aviation Fuel) and other light products annually. Using captured biogas feedstock, integrated carbon capture, and 100% renewable power will result in millions of tons of CO2 savings annually while creating thousands of clean energy jobs and adding a forecast $20 billion to the regional economy.
A barrel of light sweet oil, such as tight shale oil found in the Permian, contains less carbon than a barrel of heavy oil such as bitumen oil sands from Canadian producers. The extra heavier oils have a higher impact on the environment due to a higher carbon residue while lighter crudes carry the advantage of containing a mixture of various lighter hydrocarbons such as natural gas that can be used in the refining process as feedstock. OXY has a strong initiative in the Permian Basin to capture carbon directly from the air but have also implemented many technologies such as Closed-Loop Gas Capture to essentially eliminate unnecessary flaring of natural gases and utilize the excess hydrocarbons back into the pipeline. Utilizing the lower carbon footprint of the Permian Basin hydrocarbons extracted while expanding on production could reduce a large portion of the industries impacts on the climate while compounding the results with higher level over government oversight by the Environmental Protection Agency(EPA) versus competing countries.
Transitions usually come in layers where the last generation of technology is built upon and enhanced to better suit the next level of innovation. Layering through the hybrid model in transportation and energy production makes sense when considering that in the history of the world humankind has not decreased its reliance on a single energy source over time and has only added new sources to meet an ever-growing demand.
Regardless of the potential of the Permian Basin, cities centered at the forefront of this region such as Odessa and Midland are already struggling to find qualified employees to chase the growth of the area. The average state in the U.S. has a return of $56.76 for every dollar invested in education, Texas receives nearly double that return at $108.29 and yet the Permian Basin will be massively short their workforce to meet global energy demands. All this under the assumptions put forth by the DOE that renewable energy will increase supply by 350% and oil demand in lock-step at an increase of 30%, leading to natures confession that we are and will be in an energy crisis lead by supply and demand. Once again the phrase ‘energy crisis’ will be reintroduced to everyone’s vocabulary replacing the phrase ‘climate change’ as energy policy by politicians to transition too quickly reverses while the most vulnerable population was ignored. The question remains if Midland and Odessa businesses in coordination with the local education system and certificate training can meet the necessary demands to train and replace 190k employees creating a competent workforce through better facilities and hands on equipment training.