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DCA & AGA Workshop Dives into New Issues, With a Focus on Workforce Development

Tuesday, February 7, 2017

Richardson, Texas – In April, the Distribution Contractors Association (DCA) and American Gas Association (AGA) held the third annual DCA & AGA Utility Contractor Workshop in Chicago, Illinois. The workshop has grown in interest, attendance and in the range of issues addressed. A number of panels and speakers discussed ways to improve communication and cooperation between gas distribution utilities and the contractors who work for them. This year’s workshop also -provided an effective forum for an evolving conversation about workforce capacity challenges in the under-ground construction industry and the establishment of a new coalition to address them. The agenda included other topics including efforts to improve and facilitate compliance with operator qualification programs, best practices in horizontal directional drilling operations, issues related to the fusion process in gas distribution construction, federal policy regarding post-construction inspections, and discussion of the latest and greatest in new technologies used in the natural gas pipeline industry.

The 2016 workshop brought in some 160 industry representatives from different parts of the industry from across the country. As always, attendees walked away with a lot of information and hopefully a better sense of how the industry is faring as it faces a range of both new and enduring challenges.

Increasing focus on workforce development
At the first DCA & AGA Workshop in 2014, the initial discussion of operator qualification (OQ) programs evolved into a larger conversation about arguably the biggest challenge facing the construction industry today. Panel discussions about OQ compliance led to claims from the audience such as “I can’t even find enough qualified people to do the work!” It wasn’t long before DCA members and utility reps alike knew there was much more to talk about.

Since then, DCA has established a workforce development initiative to address capacity issues within the underground utility construction industry. To kick off the 2016 workshop, Mark Bridgers of Continuum Capital, who was retained to lead the new workforce effort on behalf of DCA, provided an overview about the status of the underground utility workforce and how it is prepared (or unprepared) to meet the workforce demands that will come with the tens of billions of dollars in gas distribution projects on the horizon.

 
While this tremendous workload coming down the pike is filled with opportunities, concerns about the “graying workforce” continue. Bridgers recalled hearing comments from local distribution company (LDC) representatives saying they “have 25 years of work and I might make 10 of them,” and that 38% of natural gas and electric workers are -eligible to retire in the next 10 years. This is an industry that has enjoyed an increasing workload at a time when virtually all other construction sectors have suffered.

As a result, worker demands from 2008-2015 have stretched resources to the point that expansion of construction crews has become problematic. Crews have been -divided and subdivided. Experienced workers are now crew leaders, and those under them don’t have the same experience as in years passed.

Establishment of UCWA
In response, DCA formed the Underground Construction Workforce Alliance (UCWA) to bring utilities and -contractors together to identify areas (both geographic and industry--specific) that need workers, and where that labor can be found.

The UCWA has set both short-term and long-term objectives, starting with building a coalition of industry trade -associations, pipeline companies, unions, manufacturers and suppliers. When the UCWA is fully represented, the coalition will work collectively on the long term goal of resolving the workforce and field leadership needs through 2025. UCWA will focus on five core concepts when developing an effective strategy, including:

Forecasting supply (available labor & supervision) and demand (capital spending)
Awareness & Recruiting

Training

Placement

Retention & Career Development

Industry representatives will participate in UCWA’s leadership team, planning team and several Implementation Teams to develop and implement strategy, tactics and actions at the local level. After evaluating “hot spots” in New England, Texas, Ohio, Pennsylvania and California, the leadership team agreed to look at Columbus, -Philadelphia, and parts of New England to begin its work. While maintaining an initial focus on the underground gas pipeline -industry, UCWA leaders may decide to expand the scope of the coalition efforts to include other industries such as power and broadband construction.

UCWA panelists roll out initial issues
The overview by Continuum Capital set the stage for a broader discussion by a panel of the UCWA Leadership Team, where representatives from Michels Corporation, Atmos Energy, Miller Pipeline, and Vermeer Corporation discussed initial UCWA strategy and activities. It was clear up front in the discussion that both contractors and LDCs are changing their approaches to recruiting and retaining quality workers.

Across the board, finding and recruiting those who provide skilled labor such as fusers, welders as well as general laborers is no easy task. Echoing a central part of Continuum’s presentation, shortages of supervisors and foremen are becoming a bigger problem as existing industry -resources are stretched further and further.

The underlying image problem facing the industry -remains a tough nut to crack. The stigma that accompanies being a part of the “construction industry,” whether working for the gas company, a construction contractor or equipment manufacturer, continues to prevent many young people (and their parents) from giving energy and construction a close look. Recognizing the promising future offered by this industry, these shortsighted misconceptions must be confronted head on.

On the utility side, LDC budgets are growing and gas distribution programs are expanding and accelerating. The “800-pound gorilla” in the room is not a lack of financial resources or even the steady stream of federal and state regulations, but the gap between the anticipated workload and the human resources needed to get the job done. -Additionally, the increasing demand is speeding up the timeframes for moving quality workers into supervisory roles.

Because of continuous technological and operational improvements, adjustments in OQ programs are always -being considered and utilities see capacity challenges both internally and within contractor crews. A panelist representing LDCs said that he has seen capital spending doubled and tripled over the past five years, and will probably double and triple again over the next decade. Panelists also agreed that these problems are recognized by the highest level of leadership within the LDCs and contracting firms, both union and “open shop.”

A contractor on the panel pointed out that ten years ago a select few utilities were aggressively replacing old distribution pipe, and now many if not most are speeding up their replacement programs, stretching the workforce further. The increasing role played by contractors was highlighted when a utility rep said he didn’t anticipate “a big return to more in-house crews.”

The panel addressed a number of questions from the -audience regarding workforce impacts on OQ programs, the importance of offering multilingual training, the effectiveness of job fairs in attracting potential workers, and -effective use of construction equipment simulators.

Representatives of utilities and contractors alike sug-gested that gas utilities work to level their workforce with anticipated workloads to the extent possible. While this -requires enhanced communication about the amounts and types of projects on the horizon, the result will be -better coordination of internal and contractor personnel and project planning.

The problem of recruiting younger, “millennial” workers remains. While many potentials want to start out in a supervising capacity, the need for skilled workers is what is sorely needed. The reluctance to accept entry-level work can be addressed by showcasing state-of-the art equipment and technologies that excite new generation workers.

It was also suggested that training programs may -exist that could warrant UCWA endorsement. Additionally, employers must work to not only recruit but retain quality workers. Training, testing and qualifying workers who leave the industry in just a few years doesn’t do the industry any good. New workers need to know that energy and -construction work is not “just a job,” but a promising, well-paying, long-term career.

The UCWA currently includes a good mix of contractors, utilities and equipment manufacturers, and while the players are competitors in the field, all have put aside their corporate agenda for the betterment of the overall industry. The panel discussion of the UCWA led to dozens of workshop participants volunteering to participate. This is a good thing as there will be considerable work to do on a range of implementation teams at the local level. It was clear that while UCWA has an ambitious and challenging agenda, the coalition is truly needed to begin closing the gap between the anticipated workload and the shortage of workers needed.

DCA keeps HDD preparation front and center
A continuation of last year’s discussion of HDD practices, training, and use of technology was included on this year’s workshop agenda. A panel of contractors and equipment manufacturers discussed a range of issues, and it was clear that players in the HDD industry are not spared from workforce capacity challenges. Panelists effectively continued to address the workforce issue, applying “real life” impacts to the discussion.

HDD contractors on the panel echoed earlier remarks about industry recruitment. Local colleges and trade schools are always considered a priority, but many construction employers go after even younger prospects, looking at high school students as well. In addition to targeting kids, the panel suggested using local unions and apprenticeship programs as well as employment programs for veterans, such as “Helmets to Hard Hats,” which offer opportunities to help vets make the often difficult transition from the battlefield to the workforce.

Upon recruiting a candidate for HDD work, an elaborate ‘onboarding’ process follows. HDD and other trenchless operations is highly-skilled work, and considerable training and preparation is needed before sending new workers into the field. Ensuring sufficient “knowledge, skills and -abilities” (KSAs) are at the forefront of these programs, both with -regard to a pipeline operator’s OQ program as well as requirements from federal agencies such as the Department of Transportation (DOT), Environmental Protection Agency (EPA), and Occupational Safety and Health Administration (OSHA).

KSAs are demonstrated by all new drill operators through testing and evaluation, including the ability to recognize abnormal operating conditions. After classroom and/or computer-based training, new workers are often brought into the field for on-the-job training. Contractors on the panel said they keep a close eye on those who may have been out of the field for too long and probably need -additional training as technologies continue to improve. Additionally, new recruits should be evaluated individually, and job functions applied where compatible skill sets are found. The panelists said a hands-on approach is critical, and “you really have to know the people” working on HDD projects.

There was ample discussion about evolving technologies and new educational opportunities available for players in the HDD industry, where curriculum is much different than 10 or 20 years ago. Arizona State University (ASU) offers a new curriculum dedicated to HDD, where students and -interns prepare for future work on behalf of municipal governments, pipeline operators and construction contracting firms. Programs like this offer real promise for young prospects, as savvy construction employers are increasingly -hiring people right out of school.

Manufacturers of HDD equipment are opening training centers that offer available machines for training purposes as contractors continue to up their game in terms of recruiting and training new workers through considerable use of new and improved simulators.

Panelists underscored the need to address shortsighted perspectives in the past about a lack of attention to safety and training by the HDD industry. All panelists agreed that a minimum of six months of training is needed to become a reliable drill operator, and questions from operators and/or regulatory authorities about the preparation and onboarding process should be directed to the contractor. HDD stakeholders must be vigilant about misperceptions about HDD practices, equipment, fluids and disposal -methods, and the individuals involved in HDD operations. At the same time, “cowboy contractors” who cut corners should and will be removed from the market through not only government oversight but the market demand for quality work.

Regarding damage prevention to gas facilities, the goal of “zero damages” is now embraced by virtually all involved in HDD work. At the same time, the panel agreed that it takes cooperation and communication from both contractors and utilities to meet that goal. The panel wrapped up its discussion by presenting a question asked by some with a stake in utility construction but a lack of understanding about the importance of HDD. “Do we really need HDD?” one panelist asked rhetorically. “The answer is a resounding ‘yes’.”

B31Q continues to provide options in OQ compliance
Compliance with OQ programs has been a central issue behind holding joint workshops with AGA members and DCA contractors. The progress made by the American -Society of Mechanical Engineers’ (ASME) B31Q standard has offered both gas utilities and their contractors viable options to ensure compliance with OQ programs held by pipeline operators. A member of the B31Q Committee provided workshop participants an overview of the committee’s history, makeup, an update on the standard and the latest issues under consideration.

ASME’s B31Q Committee was formed in 2003 following the public notices from the Pipeline and Hazardous -Materials Safety Administration (PHMSA) and the National Transportation Safety Board (NTSB) about concerns with the final rule on OQ, which was some eight years in the -making and required documented training and testing of those working on natural gas and hazardous liquid pipelines. The committee worked to develop a technically sound and holistic consensus standard for the qualification of pipeline personnel, both “in-house” and contractors. The first edition of the B31Q standard was issued in 2006.

Since then, the B31Q Committee, which consists of -liquid pipeline operators, contractors, labor organizations, contractors, OQ vendors and federal and state regulators, has met regularly to update and fine tune the standard. The fourth edition is expected later this year. It was reported that according to PHMSA, “if you meet the ASME standard, you meet regulatory requirements.”
A primary interest in B31Q lies in the standard’s “covered task list,” which is central to compliance with differing OQ programs. Under B31Q, covered tasks are those that impact the safety and integrity of a pipeline. Covered tasks are technically justified and must be considered clear and durable over time, offering both prescriptive and performance-based options.

The B31Q Committee is currently considering adjustments to the standard as PHMSA is proposing to expand the scope of the rule to include new construction and -addi-tional requirements regarding “program effectiveness” section to the OQ regulations.

OQ regional report
The presentation on B31Q standard is a good segue to a broader discussion of OQ issues, where stakeholders from several regions of the U.S. reported on current efforts to -improve and enhance “portability” of OQ programs. -Attendees heard from representatives from Northeast, -Midwest, and the West Coast, where industry groups continue to provide forums for open discussion about OQ programs and methods to comply with them.

The issues under consideration have not expanded as much as the amount of discussion among regional groups that are increasing the dialogue on OQ and portability. Examples include an event hosted by the Western Energy Institute in May of this year, where a large group of representatives from all over the country met to discuss OQ and other issues of interest to the pipeline construction industry. The Midwest Energy Association is establishing a council of executives to address a range of topics related to OQ compliance. In the Northeast, contractors and utilities alike agree that portability issues are -effectively addressed through cooperative efforts on qualification, where “challenge tests” are becoming more generic and fair, and regulators work with industry to oversee compliance with the OQ process.

Many pipeline operators are looking for ways to enhance the value of OQ programs, including regular examination of qualification exams, tailoring testing to differing learning styles, and cooperative efforts in dealing with newcomers to the industry. These inclusive approaches are paying off both in operators’ compliance with federal regulations as well as contractors’ compliance with OQ programs maintained by different customers.

The panel also addressed a growing issue in the OQ conversation. There is agreement by both operators and their contractors about sufficient qualification methods for about 80% of covered tasks. However, since DCA and AGA have held these workshops, many have indicated that the “80-20%” ratio is no longer accurate. Many workshop participants said that “90-10%” may be a better description of agreement about adequate qualification techniques. While the remaining 10% is considered a “big hurdle” in the OQ process, these discussions have proven to move the industry players closer together on OQ compliance.

Fusion issues in gas distribution
In a shift from workforce capacity and OQ-related issues that are commonly addressed at these workshops, a panel consisting of a DCA contractor, an AGA member utility and an employee of a large pipe manufacturer representing the Plastics Pipe Institute delved into a range of issues surrounding the fusion process of polyethylene (PE) pipe.

PE represents more than 95% of the piping installed in -today’s gas distribution market, providing reliable and resistant fusion joints with a prolonged design life. -However, the fusion process of PE pipes and fittings has been put under the microscope in several states where there have been regulatory implications. This panel took a hard look at some of the surrounding issues on what is an increasingly hot -industry topic.

Some states have seen changes in regulatory requirements that include mandatory peer inspection of all fused joints. Operators and contractors are doing this -voluntarily in some areas. One company explained that dozens of people can be involved in hours of elaborate, hands on fusion training. Some operators are now requiring elec-tronic tracking of every fuse, which is a huge undertaking but does provide specifics about fusing procedures in the event of a future pipeline incident. In some cases, requirements for “third-party review” have become “peer reviews” of not only fuses but all mechanical fittings.

Panelists discussed some technical issues with regard to electrofusion, including the scraping process, maintenance of scrapers, oxidation, use of alcohol to clean fuses, possible sources of contamination, and the need for ongoing training in an industry with a high turnover rate. It was recommended that gas utilities regularly communicate changes in fusion procedures, and that fusion trainers ensure that they are aware of appropriate standards applied from operator to operator. Contracting crew leaders need to strictly follow fusion procedures as prescribed by the operator.

 
While there was not much support in the room for establishing a new standard on fusing PE pipe, communication about the process can always be improved. Recognizing the regional differences that come into play when dealing with the fusion process, panelists strongly recommended that regional gas associations get together on this issue. -Regional gas association members and contractors working in those areas would learn a lot from each other on fusion as well as other issues relating to OQ and pipeline safety.

While portability is needed in the industry, pipe fusion is not a task that is portable from operator to operator. All panelists agreed that strict adherence to operator’s procedures and regular training and retraining is fundamental to the process. Panelists concluded by pointing out that while issues relating to the fusion process are technical in nature, the importance of recruiting, training and retaining -quality fusers is a must. Fusion as a job function was mentioned throughout in discussions about workforce capacity and compliance with OQ programs throughout the workshop.

PHMSA proposal on post-construction inspections
Last year, DCA’s Government Relations Committee -expressed serious concern about a proposed rule change from PHMSA dealing with post-construction inspections of natural gas transmission and distribution pipelines. The main concern was not with the end goal behind the rule change but the disparaging discourse regarding the contracting community over several years as the rule change was -developed.

A preliminary overview with a history and timeline of the rule change was provided to the audience in advance of a panel discussion. The inspection rule change stemmed from a petition in 2010 by the National Association of Pipeline Safety Representatives (NAPSR) encouraging PHMSA to restrict contractor crews from inspecting their own work. PHMSA included language to adjust the inspection rule in a 2011 proposed rule on “miscellaneous” pipeline safety issues, but restricted individuals from inspecting their own work, whether they be “in-house” employees of a pipeline operator or contract personnel. In March 2015, the rule change was included in the final miscellaneous rule.

However, PHMSA issued a subsequent notice six months later staying the compliance date “indefinitely.” PHMSA explained that the compliance date was put on hold in response to concerns by public gas utilities, many of which have five or fewer workers per crew, making compliance overly burdensome. In addition, PHMSA noted NAPSR’s ongoing objection to contractor personnel being involved in inspection of the work of their crews. NAPSR’s position, according to PHMSA, was that the rule change “appears to apply to operator construction personnel as well, which was not NAPSR’s original intent since in its experience, operator personnel have less of an incentive to accept poor-quality work.”

It was not surprising to anybody in the room that DCA takes exception to NAPSR’s position. A panel including contractors, a pipeline operator and a state pipeline inspector representing NAPSR then discussed issues related to the increasing role of contractors in pipeline construction, the underlying reasons behind NAPRS’s position, and the status of the rule change.
Almost immediately following the release of the final “miscellaneous” rule, PHMSA put together a working group to discuss implementation of the inspection rule and its impacts on the pipeline industry. The panelist from NAPSR indicated that the information in the September “Federal Register Notice” that halted the compliance date came directly from discussion of the working group, and that the future of the rule change is uncertain at best because of staff changes at PHMSA and the fact that discussions among the working group have stalled.

DCA contractors started out saying that for the most part, contractors already require individuals other than those performing the work to perform post-construction inspections. Contractor panelists also stated that pipeline contractors today are much different than 10-20 years ago. The contracting industry has undergone significant transformation where increased training, OQ compliance, documentation/recordkeeping, and other factors have -improved the contractor workforce considerably.

 
Additionally, DCA pointed out that while PHMSA reg-ulations are subject to pipeline operators, the impacts of the pipeline safety regulations and the liability that comes with them are passed directly from the operators to the contractors working for them. The entire notion of contractors being restricted from inspecting the work of their crews is impractical and shortsighted. Gas utilities would be losing a valuable resource if PHMSA were to remove contractor personnel from the inspection process. DCA also stressed that to require third-party inspections would be impractical and would unnecessarily call for a host of new inspectors who don’t necessarily have the experience needed to inspect the growing number of distribution construction projects, almost all of which is contracted out. One panelist indicated that in today’s gas construction market, where regulatory requirements, liability and other responsibilities related to safety management and quality management programs put on them, “no contractor is in a position to accept poor quality work.”

The utility panelist generally agreed, saying that safety and quality of work is “at the head of every contactor’s responsibility.” He also said that his company and many other operators are moving forward with their inspection programs but are “having problems with finding quality inspectors.” The utility representative also stressed that he considers his contractors as partners, and that both sides must work to build on these partnerships to ensure maximum effectiveness and a safe and reliable pipeline system.

The NAPSR representative said that he would -“probably agree with many of the elements discussed” and that “contractors want to do a good job.” NAPSR provided a first hand account of the working group’s discussions about the inspection rule, and said that calling out the contracting community was not a consensus shared by all NAPSR inspectors. At the same time, NAPSR believes there is poor quality work happening in some cases, where bad actors “need to be weeded out.”

 
NAPSR indicated several issues remain to be addressed, including the scope of a final inspection rule, sufficient qualifications of inspectors, required documentation and other specifics provisions that need clarification. All panelists agreed that while there is usually objection to “one-size-fits-all” regulations, the inspection rule is one where the rules should apply consistently to all players involved.

New technologies in utility construction
The last panel of the workshop brought in several equipment manufacturers and technology experts to evaluate a range of technologies used in the pipeline construction industry, from locating and mapping technologies to mobile devices that will improve communication among field personnel as well as enhance training and testing methods for an increasingly mobile workforce.
The need for “faster, safer, more profitable” technologies is nothing new, but the demand for accelerated data collection and dissemination has never been higher. The need to be able to transfer information from a job site to a project owner using fiber networks is becoming the norm. Tracking information about piping systems, fusion data, and even -inspection information are increasingly important as inspectors “struggle to be in several places at the same time.”

As was discussed during the panel discussion on HDD operations, technologies are constantly improving. -Locating tools are not changing dramatically although there is a much better ability to determine depth of underground facilities. Panelists agreed that information regarding HDD and utility locating data is now able to be integrated much quicker than even a few years ago. Today’s worksites need to get critical data from the field to office, and vice-versa.

Challenges facing technology industries range from data overload and the need to capture, retrieve and analyze it to mitigating confusion that comes with mobile -devices that are getting “smaller and faster,” and the impacts on those in the field. Ensuring that customers get “enough but not too much” information is an ongoing struggle as technologies continue to develop. Of course, these factors vary in importance depending on who is using the technologies. Younger “millennial” workers tend to be more tech-savvy than experienced workers who are invaluable in today’s pipeline workforce but might not adapt to state-of-the-art “tablet” technologies used increasingly in today’s market.

Common themes coming out of the technology panel were the need for:

Data Management: accelerated collection, analyzation, and dissemination of key data to, and from, the jobsite

Simplicity: evolving technologies are becoming the norm, but understanding and providing assistance is needed for older, experienced, but less tech-savvy -personnel

Acceptance to change: change is disruptive but often good for industry, industry leaders need to stop and take a hard look at new technologies

Speed: communication systems that quickly share data in time-sensitive situations (i.e. excavation damage, pipeline failure, methane leaks, etc.)

Accuracy: technologies are fundamental to HDD and GPS evolution; accurate determination of depth is key to safety and project effectiveness; better use of “as-built” documentation

Mobility: enhanced communications and convenience in training/testing programs that require sign-off verification is both key and readily available

The 3rd Annual DCA & AGA Workshop ended with most believing that many issues were addressed and progress was made, and as always, there are many issues to think about. Every year we have been able to increase attendance and broaden the agenda to expand on important topics and approach new ones of interest. If you attended these workshops, we thank you and hope you come back. If not, we encourage you to consider attending next year’s event. If you have any comments or suggestions in terms of format or agenda items, please forward them to eben@wymanassociates.net.

Next year’s workshop will be held April 17-19 at the Four Seasons in Chicago, Illinois.

 

By Eben Wyman, Wyman Associates

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