The construction jobs have been welcome. What happens when they go away?
by Jacqueline von Ogden
The talk on the streets regarding the BP Whiting Refinery Modernization Project (WRMP) wrap-up ranges from gloom…to doom. The huge project has been an economic blessing at a very opportune time, providing a wealth of construction work, but all good things must end. What's in store for Northwest Indiana as project completion nears has become the looming question for not only workers of the trade engrossed within the project at BP, but also for the communities believed to be affected by the finality of the modernization project coming to a close later this year.
“Let's put this into perspective. This was one big project. One company, doing one thing. This is not the end of all construction in Northwest Indiana just because it's near completion,” says Mark Maassel, president and CEO, Northwest Indiana Forum.
Maassel acknowledges the economic turn during the last five years. “We clearly had a recession. But, if you ask me–if the modernization project ending will have an impact–this is what I can say. The largest project ever in the state of Indiana. They chose us. What does that say for the future of Northwest Indiana? Plenty.”
Numbers Don't Lie
According to BP, the WRMP is the largest, most complex refining project undertaken in BP's recent history, and will provide the refinery with the capability of processing a heavy crude increase of approximately 60 percent, allowing the Whiting refinery to reposition itself with hopes of being the premier refinery in North America.
largest crude distillation unit to process heavier crude.
“This project–as most people would agree–has been one of the bright spots in the recession. It has been a major sustaining force for Northwest Indiana,” says Scott Dean, general manager, press relations at BP. What Dean stresses during his explanation of the project wrapup, which is close to 98 percent, is the lasting legacy this project created. Says Dean, “The WRMP positions this refinery for another century.”
The project included installation of 380 miles of pipe, 1,200 pieces of major equipment, 600 shop-fabricated modules and 50,000 tons of steel. Though the numbers are impressive to industry-experienced individuals, Dean explains it as “the building of a new refinery within an existing refinery.”
“Do you know where we'd be without this project? This is the biggest private investment our state's history,” says Dave Ryan, president of the Lakeshore Chamber of Commerce. “This is sustainability for our area. Think of what they have done. This is the biggest upgrade in 50 years,” says Ryan.
Ryan acknowledges the financial effect many businesses may feel upon project completion, while stating the obvious. “Sure BP saved our bacon. In no uncertain terms. By putting all of these people to work on this large-scale of a project, it helped us.”
Ryan believes the question really becomes how to start absorbing those affected, and notes the positives. “Have you seen the Whiting lakefront? It's incredible. The mayor has been able to make some great changes.”
Whiting Mayor Joseph M. Stahura emphasizes that the combined efforts of the refinery's investment and RDA grant have been a catalyst for the city, though he acknowledges the volume of people coming through Whiting (due to the WRMP) may never be matched.
“Unless you stood on the street corner and watched, you would have not believed the thousands and thousands of people coming and going. We had police directing traffic on every street corner. The reality, Whiting couldn't handle that number of people,” Stahura says of his city with an estimated population of 5,000–all within a little over a two-mile radius. “It's far from over for businesses. Work that went into this project was years of discussion and planning. We, as a city, were involved in land acquisition and transfers.”
He acknowledges potential city plans, specifically with land left from additional parking spaces used for the influx of WRMP project workers. “All of that land can now be put into play for development,” says Stahura.
With the development Stahura discusses, the city of Whiting could potentially see one-half billion dollars in investments, including commercial, industrial and residential developments. “We are looking at quite a future if we land everything on the table. And then the real work begins,” Stahura says. “This didn't happen because I'm a good-looking guy, it's because of the refinery and RDA investment in Whiting.”
Moving Forward
With project completion slated in the coming months, Maassel acknowledges the temporary increase in jobs from the project itself. However, he says the key to all of this is what is going on in the economy.
“Total employment in manufacturing is shrinking. This affects people who support steel mills and power plants. This is partly due to outsourcing,” says Maassel.
Though he agrees the recession for Northwest Indiana was dampened due to the project, the answer for many of the area's future issues is a better-educated workforce.
“We need to shift and upscale the workforce,” says Maassel. “Our infrastructure–raw materials in, finished product out–we are a pass-through. Location, location, location. That is one of our primary advantages. We are an extremely skilled, very capable workforce.”
“It's no surprise the refinery project sustained many families in this area. But it's not as bleak as some would think,” explains Kevin Roach, manager of Laborers' Local 41 in Munster. “We preach the doom and gloom–we want them to be prepared. We let them know to be frugal.”
Though Roach believes the proverbial “pinch” may occur later in the year, he notes it's hard projecting anything beyond six months. “Will the economy take a hit? Sure there are going to be some misses here and there, but the business shifts as new projects begin,” says Roach. He admits it may be a wakeup call for some workers, especially those not taking advantage of additional training offered.
Like Maassel's line of thought regarding increasing skills, Roach notes the push for Local 41 workers to increase education. “Some of the current and future projects have certain skillsets now required. Many of our apprentices have become accustomed to classes. They see the big picture.”
Roach believes the strong workforce will continue as new projects begin, noting current projects including the nine-span bridge project of U.S. 41, the reconstruction of Cline Avenue, the Munster Community Hospital emergency room vertical expansion, PCS Hammond Regional Distribution Center and the EPA East Branch Grand Calumet River Project. “We've had 75 apprentices annually for the last five years. We just passed out 1,000 applications. We're always looking for qualified people,” Roach says.
Dean believes the WRMP has been a positive impact on the workforce, noting the great learning experience for many firms. “Safety is No. 1 at BP. We have strict/rigid safety requirements and standards. Forty million man-hours without a significant injury occurred with this project,” says Dean. “The refinery always has maintenance work, and we will continue to use the local expertise,” he says.
Dean adds, “This is great for a firm to have this on their resume. It only positions them for future opportunities.”
And opportunities may just continue. Says Maassel, “The trend in housing–home sales are up. We are on a positive trend. You need people who support and live in the trades. It's terribly simplistic. But it is only one project. Despite the recession, it made it less. We have to keep that in mind. It deferred it, really. We will see where it takes us.”
