Jose De Hoyos is recruiting in the oil zone. He began meeting with workers in Pennsylvania’s Marcellus Shale Basin. This month, you’ll find him happily in Odessa, Texas.
But De Hoyos isn’t in the Permian hiring engineers for gas rigs or roughnecks to join drilling crews. Instead, the founder of cryptocurrency consultancy LFG Mining is proposing a career pivot to data centers, the unattractive backbone of all things tech. It promotes better wages and working conditions and a career with great growth potential.
“We’re going to train them and get them proficient in Bitcoin mining setup and the traditional data center,” said De Hoyos, who is looking to hire up to 12 people for operations in Pecos and Odessa.
While it’s hardly new for energy workers to migrate to tech, President Joe Biden infamously encouraged coal miners to “learn to code,” the current push by De Hoyos and other recruiters to poach them comes at a precarious time for the gas industry.
Developers are scrambling to build a series of massive projects in Texas to liquefy and export US gas to offset reduced Russian pipeline flows to Europe following the Ukraine invasion. These companies need all the skilled workers they can get. Executives and analysts warn that growing technology competition threatens to drive up project costs and slow construction as the clock ticks to bring the fuel to the global market.
Recruiters targeting the Texas energy industry have been a nightmare for Paul Marsden, president of the energy division of engineering and construction firm Bechtel. It’s losing workers to Elon Musk’s SpaceX and the tech titans that moved to the Lone Star State amid pandemic migration.
“Big Tech has a lot of buying power,” he said in an interview. “The mission is to go hard, go fast, and this has been a disruptor for the labor market. That’s not something we’ve had to compete with in the past.”
The United States will become the world’s largest LNG exporter this year, but to keep up with demand, it will need to bring new export terminals online quickly.
NextDecade Corp. will need up to 5,000 workers on site when it starts construction on an $18.4 billion LNG export plant in Brownsville, called Rio Grande LNG. Golden Pass, a joint venture between QatarEnergy and Exxon Mobil Corp., needs up to 7,700 workers near the Louisiana border before it opens next year. In nearby Port Arthur, Sempra’s project needs up to 1,500 workers a month for the 4 1/2 years it will take to build.
The cost and availability of workers is a big issue for companies as they embark on these large LNG projects, according to Mike Webber, managing partner of energy industry consulting firm Webber Research and Advisory.
“Not only will the existing labor pool be stretched, but it’s getting more expensive” along the U.S. Gulf Coast, Webber said in an email. “There is a hidden cost in training so many new people and raising their skill level to the point where they can reach quality standards.”
Golden Pass declined to comment on the risk of delays or cost overruns on its project, while NextDecade did not directly address the question. Sempra said he was seeing a tighter labor market and cost increases, but he’s looking to keep them to a minimum by setting prices up front.
America’s largest LNG producer, Cheniere Energy Inc., is expanding one of its export terminals in Corpus Christi. The company says costs for this project could be roughly 10% higher due to the “inflationary environment.” Executives have also said that across the industry, project costs have risen by as much as 40% in some locations due to increased labor and construction costs and higher interest rates .
Sarah Oliveira, who works as a recruiter for the company Airswift Global, says competition from technology companies has made it increasingly difficult to fill LNG positions in Texas. For every five potential engineering candidates he’s vetting for LNG-specific roles, he says at least one or two of them are also interviewing with Tesla. And Tesla often offers a higher salary.
“Money can be the deal breaker,” he said.
Of course, the labor shortage in Texas is not entirely unique. In the United States, companies in industries from semiconductors to meatpacking are struggling to find workers amid historically low unemployment. Trade workers are especially hard to find, with about 200,000 electricians in the U.S., according to industry estimates.
“The trades are in desperate need,” said Helene Webster, executive director of Independent Electrical Contractors, Texas Gulf Coast.
Specialized roles for large infrastructure projects, such as project managers who make sure everything runs smoothly and on time, can be especially difficult to fill.
“We say it’s like finding hen’s teeth,” Damon Hill, president of growth and project development at Wood Group, a major infrastructure consultancy.
Cormint Data Systems Bitcoin mining facility under construction in Fort Stockton, Texas in 2022.
The increased competition for Texas workers also reflects how the economy has transformed in recent decades. Although the state remains the energy center of the United States, the industry is a smaller part of the overall Texas economy than in years past. The number of oil and gas workers in Texas has fallen 20% since 2018, according to data from the Texas Workforce Commission, while jobs tied to IT infrastructure, data processing and other related work grew nearly 40% during the same period.
Jeff Reid, 34, left a job doing business development for Mesa Natural Gas Solutions, a company that supplies natural gas generators to shale operations, in February to join Sunbelt Solomon. His new employer provides electrical equipment such as transformers to data centers and other businesses.
“A lot of my friends in the oil and gas industry make the moves themselves or ask me how to get away,” Reid said. “They have seen the energy cycles and volatility of the oil and gas industry. It gets a little scary when things slow down.”
Reid said there is a surprising amount of overlap in the skills needed for any field. “There are a lot of parallels,” Reid said. “Plug in computers and troubleshoot, connect electrical components, tighten pipes, set up equipment on site.”
De Hoyos, whose company repairs, trains and operates cryptomining facilities, said one of his favorite hunting grounds for recruits is gas stations.
He walks around the parking lot looking for telltale signs of energy workers, specifically the large coolers in the back of their vehicles that provide cool drinks in the stewing West Texas oil patch. He always makes sure to mention that the data centers are air-conditioned.
— With the assistance of Catarina Saraiva.
