Harvey may pinch some Gulf Coast refining, chemical projects
Oil and petrochemical plants along the U.S. Gulf Coast intend to go ahead with plans for near record spending on expansions next year, despite Hurricane Harvey driving up labor costs and slowing work, experts said.
Harvey largely spared oil and petrochemical plants along the U.S. Gulf Coast from significant damage but thousands of homes and businesses were not as fortunate. Refiners and recovery projects will compete for the same labor, driving up costs or causing labor shortages.
Industrial investment in the Gulf Coast is expected to hit $51.9 billion next year, near the 2015 peak, requiring an army of pipefitters, ironworkers and other craftsman, said Industrial Information Resources (IIR), which tracks labor supply for refiners and other industrial companies.
“We had a labor shortage before Harvey, but now it’s significantly worse,” said IIR’s Anthony Salemme. “It’s going to spread to soft crafts like painters and insulators.”
Investments have soared in recent years because the shale revolution fed off an existing infrastructure. The region’s deep water ports and expanding pipeline and storage networks offer an easy outlet to global markets. It also boasts a welcoming regulatory climate and skilled workforce.