Industry expands, but jobsmay not
Technology is improving so fast and so dramatically that more and more jobs are being done by machines, not men or women. It’s happening all over, from fast food to retail, and it’s been happening in Southeast Texas for years in a critical sector.
Anyone who works in a petrochemical plant here knows they are making more product than ever with fewer people. In some cases, a lot fewer people. The recent news about expansion of Exxon Mobil’s Beaumont refinery provides a clear example. The refinery will boost its daily production by at least 250,000 barrels, bringing its total output up to 615,644 barrels.
That could make it the largest refinery in the U.S., surpassing the current leader — Motiva’s Port Arthur refinery, which can churn out 603,000 barrels per day. Possibly no other place in the country can boast the No. 1 and No. 2 producer in a major industrial category like this within a half-hour’s drive of each other.
Exxon Mobil’s expansion is incredible, and it will provide a lot of property-tax dollars. But this mega-project will result in the addition of only 40 to 60 permanent jobs, far fewer than the 1,850 temporary construction jobs. Think about that ratio of permanent to temporary jobs. Other plants are taking the same approach, as these estimates show:
Motiva’s $7 billion expansion created 300 permanent jobs and 6,500 construction/contractor jobs.
When Total completes the $1.7 billion ethane cracker to its Port Arthur refinery announced last June, the result will be 60 full-time jobs and 1,500 construction jobs.
Valero’s $2.4 billion hydrocracker and related expansion? About 2,000 construction jobs and 30 permanent ones.
This is by no means a criticism of the refineries, or any other company that uses a robot instead of a Robert to get the job done. They are in business to produce the most they can for the least they can. If they don’t, their competitors will gladly leave them in the dust. This has been true since Henry Ford used an automated assembly line to move cars to the workers instead of having them go to the Model A’s.
With this Exxon Mobil expansion, each new permanent employee could be, in effect, producing upward of 4,000 barrels of refined oil per day with the assistance of better equipment. Computerized technology and artificial intelligence have accelerated the pace of automation to the point that many analysts wonder if at some point there won’t be enough jobs for actual people. That’s another column. Let’s stick to local refineries for now.
The huge numbers of construction jobs on these expansion projects is nothing to sneer at. Those hundreds, and often thousands, of workers keep local hotel rooms filled and buy plenty of food and gasoline. In turn, the sales taxes for those purchases have filled many a pothole and teaching position. Those are undeniable pluses. But those workers don’t live here, and at some point they’ll return to Houston or Lake Charles or wherever.
At least the permanent jobs that are created tend to be high-paying ones, with solid benefits. Exxon Mobil estimates that its new full-time workers will bring home $75,000 to $125,000. That’s not just good news, it’s great.
People with incomes like that can put down roots in Beaumont or Buna. They will put their kids on soccer teams and buy clothes for them at the mall. Most importantly, they will buy houses here. That anchors them in the middle class and creates property tax revenues for cities, counties and school districts.
This is what Southeast Texas needs — more good-paying permanent jobs, and not just in the petrochemical sector, to bring in more people and keep them here. We don’t have the booming job growth and real estate market that other cities in Texas enjoy. We have to work at it here, doggedly and creatively, all the time.
Diversifying the economy and boosting our population must be a priority for every public official in the region and every chamber of commerce and economic development corporation. Every opportunity must be seized, every lead must be followed up on. The gains may not come in big chunks, but they can add up.
As much as anything, this will decide whether Southeast Texas gets by over the next decade or truly prospers.