**STATEMENT OF EMILY STOVER DEROCCO**

**ASSISTANT SECRETARY OF LABOR**

**EMPLOYMENT AND TRAINING ADMINISTRATION**

**U.S. DEPARTMENT OF LABOR**

**BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES**

**U.S. SENATE**

**NOVEMBER 6, 2007**

Mr. Chairman and Members of the Committee, thank you for the opportunity
to provide the Department of Labor's perspective on the workforce
challenges confronting the energy industry. Recognizing the importance
of this sector of our economy to the Nation's overall global
competitiveness, the Department of Labor has been actively helping the
energy industry respond to the workforce challenges it faces.

The U.S. energy industry is undergoing a dramatic transformation as
advanced technologies revolutionize the traditional methods of energy
extraction and refinement. In addition, the renewable and alternative
energy field presents a whole new set of opportunities for the industry
that did not exist a decade ago. We recognize this transformation as
critically important for our economy as a whole, and that a successful
transformation requires a highly-skilled workforce. Therefore, we are
working with the energy industry to understand their business processes,
market dynamics, and skilled workforce needs.

Leaders in the energy industry, along with other high growth sectors of
the economy, express the need for more highly trained and highly skilled
workers in order to grow and be competitive in the years ahead. Most of
the new jobs created today require at least some post-secondary
training, whether it be a vocational degree or certificate,
apprenticeship training, or a four-year degree from a college or
university. However, the skilled workers that companies need are
becoming increasingly difficult to find. This is where the Department of
Labor has an important role to play.

High-wage employment opportunities with established career pathways are
awaiting American workers in the energy industry, but first, some key
workforce challenges must be overcome. Now, and over the next few years,
the public workforce investment system, private industry, the education
system, and the entire energy community must work together to address
the following challenges: the aging of the energy workforce and the lack
of highly-trained workers in the pipeline to replace them; outdated
misconceptions about careers in the energy sector; the lack of energy
training and education programs due to elimination of programs during
the recession of the early 1990s; the demand for workers with higher
levels of science, technology, engineering, and mathematics skills; and
the need for industry-recognized credentials and better career pathways
for workers in the energy industry.

**The Role of the Workforce Investment System**

Currently, the Federal government invests over ten billion dollars
annually in job training and employment assistance programs. The
Employment and Training Administration (ETA) administers many of these
programs, through the public workforce investment system, with a goal of
preparing workers for jobs of the 21^st^ century. The workforce system
is an important resource that the energy industry can draw upon to
secure a skilled workforce.

ETA has strived to build a "demand-driven" workforce system to provide
America's economic engine -- businesses -- with the highest quality
workers possible, and to link the two together for their mutual benefit.
This relationship allows businesses to be more competitive in the global
economy and workers to live more productive and prosperous lives. Key to
the success of a demand-driven system is the workforce investment
system's ability to respond to the needs of the labor market by
partnering and working collaboratively with businesses, educators and
trainers, and community leaders in a strategic effort to prepare workers
for opportunities in high growth sectors of the economy. In recent years
we have undertaken a series of initiatives to better do this, starting
with the High Growth Job Training Initiative.

**The President's High Growth Job Training Initiative**

ETA began working to address the workforce challenges of the energy
industry through the President's High Growth Job Training Initiative.
Launched in 2002, this initiative is the cornerstone of the Department's
efforts to create a workforce investment system that is demand-driven
and balances the needs of America's workers with the demands of
employers. Under the High Growth Job Training Initiative, ETA has
partnered with 14 high growth industries and economic sectors, including
energy, to evaluate their skill needs and ensure that workers are being
trained with the skills these businesses require.

Through the High Growth Job Training Initiative, ETA has invested
\$288,517,000 in 156 partnerships among employers, education programs,
and the workforce investment system. Each project targets the skill and
talent needs of high growth, high demand industries in our nation's
economy and provides the resources necessary to develop the capacity to
train workers in the skills demanded by the 21st century economy. By
training workers with the skills employers want, more workers will
obtain quality jobs that pay higher wages, while enabling employers to
address their skill shortages and better compete in today's changing
economy.

To better understand the workforce issues of the energy industry, in
2004 and 2005, ETA conducted seven forums for executives from all
segments of the oil and gas industry, electric and natural gas
utilities, nuclear energy, and mining. These forums provided us and the
workforce investment system with the opportunity to gain further
understanding of the critical workforce needs of the industry and
develop workforce solutions.

Our discussions with the energy industry in these forums identified
several key workforce development concerns. First, a large percentage of
current workers in the energy industry are nearing retirement. The
average age of workers in the energy industry is now over 50, and the
industry estimates that up to half its current workforce -- more than
500,000 workers -- will retire within 5 to 10 years. As experienced
workers retire, they are difficult to replace because too few
entry-level workers are equipped with the advanced skills required by
today's technologically-sophisticated companies. Creative solutions are
necessary to help experienced workers who will be retiring transfer
their knowledge and skills to their replacements and to help new workers
gain necessary skills as quickly as possible.

The situation is compounded by the problem that too few potential
workers are interested in careers in the energy industry.  Stereotyping
of energy careers as low-skilled causes qualified workers, especially
youth, to be unaware of the many highly skilled, well-paying career
opportunities the industry has to offer. 

 An additional set of challenges arises because many training programs
were reduced or eliminated during the downturn the industry experienced
in the late 1980s and early 1990s.  Programs have not expanded at the
same rate that the industry's need has rebounded.  Also, we know that
employers in all sectors of the industry need workers who are more
proficient than their predecessors in math, science, and especially,
technology skills.

Finally, it was noted at the forums that too few industry-defined,
portable credentials have been developed in the energy industry. 
Additionally, some energy occupations lack clearly recognizable career
ladders necessary for instilling a new perception that working in the
industry is an attractive and viable long-term career choice.

Working from this foundation of information about the workforce
challenges faced by the energy industry, investments were made under the
High Growth Job Training Initiative to implement solutions to the
identified challenges. Of 156 current investments under the initiative,
11 grants totaling \$27,093,668 have been awarded to help meet the
workforce needs of the energy industry. One example is our investment
with the State of Alaska's Department of Labor and Workforce
Development.  In order to meet the growing workforce demand in the
energy sector, the State of Alaska, in partnership with education and
industry partners, is directing training resources towards
energy-related occupations while at the same time integrating vocational
and technical education with skills training.   A key component of this
grant is also apprenticeship training - a training tool that has proven
to improve job skill levels and workforce readiness across a number of
industry sectors, including energy. To build upon the current
investments, ETA anticipates announcing a Solicitation for Grant
Applications targeting the energy industry under the High Growth Job
Training Initiative later this year.

**Community-Based Job Training Grants**

Our work under the High Growth Job Training Initiative revealed a
critical shortcoming in the workforce development capacity of many
regions: many communities are not positioned to meet the training
demands of our high growth industries because of limited training
capacity and outdated curricula and training delivery systems. To
address this need for expanded affordable, flexible education and
training capacity in local communities across the country, President
Bush established the Community-Based Job Training Grants program. The
initiative provides grants to help community and technical colleges
train workers for jobs in high growth sectors though the use of
community and technical colleges.

Due to their close connection to local labor markets, community colleges
are well positioned to understand the intricacies of local economies and
better prepare workers for occupations in these localized industries. To
date, the Department has provided \$250,000,000 to 142 community
colleges, One-Stop Career Centers and other entities under this
initiative. A third round of Community-Based Job Training Grants
totaling \$125,000,000 is currently under review by the Department and
award announcements are expected soon.

Of the current investments, grants totaling \$20,405,604 have been
awarded that focus on the energy sector. One of those investments is a
\$1,998,885 grant to Montana State University at Billings to develop an
industry-driven model for just-in-time training programs in the energy
industry, including mining, oil and gas exploration and production,
power generation, biofuels, bioproduct development, renewable resources
and energy-related construction. The grant expects to train over 1,000
individuals for jobs in energy and establish an Energy Workforce
Training Center that will focus on jobs in the energy industry and will
support training programs and degrees that serve the developing biofuels
sector.

**Workforce Innovation in Regional Economic Development**

Building on the principles of the High Growth Job Training Initiative
and Community-Based Job Training Grants is the Workforce Innovation in
Regional Economic Development Initiative, or WIRED. The WIRED Initiative
is also answering the call for competitiveness by fostering innovation
through regional workforce and economic development. Though global
competition is often seen as a national challenge, it is actually at the
regional level where solutions must be developed and the challenges met.
It is in regional economies where companies, workers, researchers,
educators, entrepreneurs and government come together to create a
competitive advantage and where new ideas and new knowledge are
transformed into advanced, high-quality products or services.

WIRED focuses on labor market areas that are comprised of multiple
jurisdictions within a state or across state borders. It seeks to help
regions transform their workforce investment, economic development, and
education systems to support overall regional economic growth by
fostering collaborative partnerships among universities, businesses,
government, workforce and economic development organizations, and other
key regional partners. Many of the regions selected have been affected
by global trade or Base Realignment and Closures (BRAC) activities, are
dependent on a single industry, or are recovering from natural
disasters. Under the WIRED Initiative, ETA has invested \$325 million
and is providing expert assistance to 39 regions across the nation to
implement strategies that will create high-skill and high-wage
opportunities for American workers.

To date, 13 of the 39 WIRED Regions are focusing on the energy industry,
including the Central New Mexico region. The regional initiative is led
by New Mexico's Technology Triangle, an industry-driven non-profit
regional development alliance affiliated with New Mexico Tech
University. The alliance supports the growth of entrepreneurship, talent
and innovation in the state's green manufacturing industries, including
renewable energy, green building, aerospace and aviation,
microelectronics, and optics. In cooperation with a broad array of
stakeholders within and beyond the eight-county region, the alliance
seeks to coordinate an inter-regional effort to stimulate
entrepreneurship, advance the development of the technical workforce,
and create a public policy environment that supports and rewards
innovation.

An important element of the WIRED Initiative is the partnerships that
ETA has developed with other Federal agencies. ETA has worked with 10
other Federal agencies, including the Department of Energy (DOE), to
provide funding, technical assistance, and other support to the WIRED
regions. Beginning in 2006, ETA began working with the national
laboratories of DOE, including Oakridge National Laboratory and the
National Renewable Energy Laboratory (NREL) to increase WIRED region
access to Federally-funded technologies at Federal laboratories. Site
visits at both locations led to increased discussion on how DOE and DOL
can work together to share resources, experience, technology,
information and infrastructure in solving our workforce challenges in
the energy industry. Our partnership with NREL is particularly
noteworthy because it is the only national laboratory dedicated to
renewable energy and efficiency research and development. The assets and
resources at NREL were shared with WIRED regions during a two-day
institute, April 18 and 19, 2007, at which WIRED regional leaders were
introduced to methods to increase industrial competitiveness, stimulate
wealth creation and employment opportunities, foster public-private
collaboration in technology development, and increase innovation, all of
which are essential elements in today's "knowledge economy."

**Additional Energy Initiatives**

ETA has also undertaken a number of other initiatives to more fully
understand the workforce development challenges of the energy industry
and to ensure that the industry has highly skilled workers, including
holding an Energy Skilled Trade Summit, utilizing apprenticeship as an
important pipeline of workers into the industry, and launching a study
on the workforce needs of the industry.

[Energy Skilled Trade Summit]{.underline}

To address the workforce challenges faced by the Energy Skilled Trades
sector, ETA, in partnership with the energy industry and the
construction firms and labor management organizations that support it,
embarked on another initiative to improve the pipeline of craftsmen and
utility workers, with a focus on the Southeastern United States. To kick
off the initiative, ETA convened an Energy Skilled Trades Summit in
August 2007 in Biloxi, Mississippi, as part of the Southern Governors'
Association meeting, hosted by Governor Haley Barbour. Additional key
sponsors were the Nuclear Energy Institute, Edison Electric Institute,
the American Petroleum Institute, and the Center for Energy Workforce
Development (CEWD). Among the over 300 attendees were four Governors and
20 CEOs of major energy and construction firms. Summit participants
discussed strategies to align Federal, state, and local resources to
increase the supply of workers for high growth, high demand careers in
the energy and construction industries, and began to develop state
action plans for improving synergy between industry and the education,
workforce, and economic development systems. ETA and industry leaders
have pledged their continued support for this initiative.

[Apprenticeship Programs]{.underline}

ETA administers the National Apprenticeship Act, which establishes the
framework for registered apprenticeship programs. The apprenticeship
model continues to use the time-tested method of learning on-the-job in
combination with related technical and theoretical instruction in the
classroom to train workers in skilled occupations. Apprenticeship is an
industry driven system that develops employee skills, competencies, and
knowledge in order to meet the workforce development needs of business.
Currently, there are over 900 active apprenticeship programs in energy
industries, involving 5,900 apprentices in occupations such as power
plant mechanic, boilermaker, line erector, and operating engineer. These
numbers will continue to grow. As the energy industry builds new
facilities and adopts new processes due to technological advances, the
apprenticeship system works closely with program sponsors to adapt
apprenticeship programs to keep pace with these changes.

[Study of Energy and Mining Workforce Supply]{.underline}

The Energy Policy Act of 2005 directed DOE to enter into an agreement
with the National Academy of Sciences to conduct a study on the
availability of skilled workers in the energy and mining industries.
Given our interest and expertise in workforce issues, ETA approached DOE
and proposed to administer this study on their behalf. ETA is prepared
to commit \$750,000 to the study, and is executing a Memoranda of
Understanding with DOE to carry out this study. The Department of
Interior is also interested in this issue and will contribute funding to
the study. ETA will soon execute a procurement with the National Academy
of Sciences to conduct the study, which we expect to be completed by
next fall. This study will provide significant information about the
availability of workers to meet energy and mining industry demands. In
turn, this will help us learn about strategies on how to best meet those
demands, thus contributing to securing the Nation's energy future.

**Conclusion**

In conclusion, Mr. Chairman, energy remains a critical driver of
America's economic growth and competitiveness in the global economy of
the 21^st^ century. High-wage employment opportunities with established
career pathways are awaiting American workers in the energy industry.
The programs and initiatives I have described will not only help address
the structural changes the energy industry is facing, but they will
provide a skilled workforce that can take advantage of the employment
opportunities that exist in the industry. At this time I would be
pleased to answer any questions that you or other Committee Members may
have.