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Technological Change
and its Labor Impact in
Five Energy Industries
Coal Mining/Oil and Gas Extraction
Petroleum Refining/Petroleum Pipeline Transportation
Electric and Gas Utilities
U.S. Department of Labor
Bureau of Labor Statistics
Bulletin 2005

Technological Change
and its Labor Impact in
Five Energy Industries
Coal Mining/Oil and Gas Extraction
Petroleum Refining/Petroleum Pipeline Transportation
Electric and Gas Utilities
U.S. Department of Labor
Ray Marshall, Secretary
Bureau of Labor Statistics
Janet L. Norwood, Acting Commissioner
April 1979

Bulletin 2005

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D .C . 20402 - Price $2.40
Stock Number 029-001-02302-2

Library of Congress Cataloging in Publication Data

United States. Bureau of Labor Statistics.
Technological change and its labor impact in
five energy industries.
(Bulletin - U. S. Bureau of Labor Statistics ;
Supt. of Docs, no.: L 2.3:2005
Includes bibliographies.
1. Machinery in industry— United States.
2. Technological innovations— Social aspects—
United States. 3. Energy industries— United States
— Employees, k. Coal-miners— United States.
5. Petroleum workers— United States. 6. Electric
utilities— United States— Employees. I. Title.
Series: United States. Bureau of Labor
Statistics. Bulletin ; 2005.


Individual industry reports were written by staff
members of the Division under the supervision of
Rose N. Zeisel and Richard W. Riche. The authors
were: Coal mining, Mary L. Vickery; oil and gas
extraction, Richard W. Riche; petroleum refining.
Rose N. Zeisel and Michael D. Dymmel; petroleum
pipeline transportation, Mary L. Vickery; and elec­
tric and gas utilities, Robert V. Critchlow.

This bulletin appraises some of the major techno­
logical changes emerging among selected American
industries and discusses the impact of these changes
on productivity and occupations over the next 5 to
10 years. It contains separate reports on the follow­
ing five energy industries: Coal mining (SIC 111,
121); oil and gas extraction (SIC 13); petroleum re­
fining (SIC 2911); petroleum pipeline transportation
(SIC 4612, 4613); and electric and gas utilities (SIC
491,492, 493).
This publication is the fourth of a series which
updates and expands BLS Bulletin 1474, Technologi­
cal Trends in Major American Industries, published
in 1966, as a part of the Bureau’s continuing re­
search program on productivity and technological
developments. Preceding bulletins in this series are
included in the list of BLS publications on techno­
logical change at the end of this bulletin.
The bulletin was prepared in the Office of Produc­
tivity and Technology under the direction of John J.
Macut, Chief, Division of Technological Studies.

The Bureau wishes to thank the following compa­
nies and organizations for providing the photographs
used in tnis study: Colonial Pipeline Company. Ex­
xon Corporation, McGraw-Hill, and the Oil, Chemical
and Atomic Workers International Union (AFLCIO).
Material in this publication other than photographs
is in the public domain and may be reproduced with­
out the permission of the Federal Government.
Please credit the Bureau of Labor Statistics and cite
Technological Change and its Labor Impact in Five
Energy Industries, Bulletin 2005.



1. Coal mining ................................................................................................................................................... I
2. Oil and gas extraction .................................................................................................................................. 16
3. Petroleum refining......................................................................................................................................... 26
4. Petroleum pipeline transportation .............................................................................................................. 39
5. Electric and gas utilities .............................................................................................................................. 50

Major technology changes in coal mining .................................................................................................
Comparison of coal mining productivity in western and eastern States, 1969 and 1975 ....................
Major technology changes in oil and gas extraction ...............................................................................
Major technology changes in petroleum refining ......................................................................................
Indicators of change in petroleum refining, 1960-75 .................................................................................
Value added and employment in petroleum refining:
Ratios of “ highest quartile” to “ lowest quartile” plants and to average plant, 1967 ....................
7. Major technology changes in petroleum pipeline transportation ............................................................
8. Major technology changes in electric and gas utilities.............................................................................

1. Output per production worker hour and related data, coal mining, 1960-77 ......................................
2. Employment in coal mining, 1960-77, and projection for 1977-85 ......................................................
3. Projected changes in employment in coal mining, by occupational group, 1970-85...........................
4. Employment in oil and gas extraction, 1960-77, and projection for 1977-85 ......................................
5. Projected changes in employment in oil and gas extraction, by occupational group, 1970-85 .........
6. Output per employee hour and related data, petroleum refining, 1960-77 ...........................................
7. Employment in petroleum refining, 1960-77, and projection for 1977-85 ............................................
8. Projected changes in employment in petroleum refining, by occupational group, 1970-85 ...............
9. Output per employee hour and related data, petroleum pipeline transportation, 1960-77 ...............
10. Employment in petroleum pipeline transportation, 1960-77, and projection for 1977-85 ..................
11. Projected changes in employment in petroleum pipeline transportation,
by occupational group, 1970-85 .............................................................................................................
12. Output per employee hour and related data, electric and gas utilities, 1960-77...................................
13. Employment in electric and gas utilities, 1960-77, and projection for 1977-85 ...................................
14. Projected changes in employment in electric and gas utilities, by occupational group, 1970-85 ....


General references ....................................................................................................................................................... 63


Introductory Note

The following discussions of technological change
in five energy industries are accompanied by projec­
tions of employment levels and rates of change to
1985. These are “ base” projections developed by
the Bureau of Labor Statistics as part of a compre­
hensive set of projections for the economy as a
In general, these base projections assume a mod­
erately expanding labor force, a relatively slow de­
cline in inflation and unemployment, and moderate
government expenditure policies. The average an­
nual rate of growth derived for real gross national

product is 4.3 percent from 1977 to 1980 and 3.6
percent from 1980 to 1985 (compared with 3.5 per­
cent from 1960 to 1977); the unemployment rate is
5.5 percent for 1980 and 4.7 percent for 1985. These
are long-run projections of the U.S. economy and no
attempt is made to forecast cyclical fluctuations dur­
ing the projection period.
For further information about the projections and
assumptions used in these studies, and for an alter­
native “ high employment” version, see the articles
in the December 1978 Monthly Labor Review.


Chapter 1.

Coal Mining

Although improved integration of coal extraction,
hauling, and cleaning processes, the development of
special-purpose production equipment, and the use
of new materials may assist the coal mining industry
in opening and operating mines more efficiently, seri­
ous coal production and productivity problems are
yet to be solved. The industry and the Federal Gov­
ernment, working both independently and jointly,
have been developing and testing new coal mining
technology during the I970’s in an effort to satisfy
the requirements of legislation on coal mining health
and safety, air and water pollution, and environmen­
tal protection of the land mined. Improvements in
underground mining methods and modifications to
surface mining equipment may increase output and
Technological change brings with it an increase in
professional and technical staff. More trained engi­
neers and specialized technicians are needed to plan
and introduce advanced mine layout and production
methods. Mining technologists, a new occupation,
are working on such environmental problems as
spoil bank placement and reclamation through refer­
tilization and planting of grasses and trees. Mainte­
nance mechanics increasingly require higher levels
of skill to service new and more complex coal min­
ing equipment. Finally, more operatives will be
needed as production expands to meet increased
demand for coal and as new technology is diffused
more widely.
Output growth has been slowing and productivity
has been declining during the I970’s in both under­
ground and surface bituminous mining. However,
the overall productivity decline has been moderated
by the growth of surface mining relative to under­
ground mining. Persistent and unresolved problems
including wildcat strikes and other labor-manage­
ment difficulties have contributed significantly to the
industry's decreased productivity in the I970’s.
Other factors also are contributing to the produc­
tivity decline. In underground mining, productivity
growth is inhibited because resources must be allo­
cated to prevent accidents, black lung disease, and
acid runoffs; in surface mining, productivity growth
is also inhibited as resources must be allocated to

meet land restoration standards and to present alter­
natives to proponents of exclusive agricultural use of
mineral lands. Gains in productivity could be real­
ized with future expansions in production. However,
progress depends on many factors, including the
availability of funds to open and equip new mines,
adequate transportation facilities for marketing, a
further increase in surface mining relative to under­
ground mining, better labor-management relations,
and the success of efforts for large-scale recruit­
ment and training of workers.
Capital expenditures for the purchase of leases
and for new plant and equipment to extract and pro­
cess coal amounted to $1.3 billion in 1975, triple the
1970 level of capital spending and 60 percent greater
than the 1974 level. Outlays rose further to $1.6 bil­
lion in 1976 and $2.0 billion in 1977. Major coal min­
ing companies are expected to add capacity to fill
new long-term delivery contracts with electric utili­
ties. Also, 1975 Federal legislation guarantees loans
to small operators for financing additional under­
ground capacity. However, the rate of diffusion of
technological advances in new mine construction and
operation and their potential impact on 1985 tonnage
and productivity are difficult to estimate.
Employment has been rising less rapidly for pro­
duction workers than for other workers. Total em­
ployment was 217,500 in 1977; 82 percent were pro­
duction workers compared to 88 percent in 1960.
Gains have been larger in surface mining than in
underground mining. Western surface mining expan­
sion will require additional workers in such occupa­
tional groups as bulldozer, excavating, and grading
machine operators and heavy equipment mechanics.
Workers also will be needed in the West to mine
deep seams recoverable only by underground extrac­
tion. Jobs for surface mining occupations will de­
cline in Appalachia as surface deposits are depleted.

Technology in the 1970’s
Advances in coal mining technology for opening
and operating new mines and for modernizing old
mines often involve, for professional, technical, and
craft workers and operatives, changes in the layout
of the work place, the equipment used, or the tasks
performed. Engineers are making computer-simula­
tion studies to compare the economic advantages of

Table 1.

Major technology changes in coal mining
Labor implications




More extensive use of computers

Computers are being used to de­
sign new mines and modify lay­
outs, and to set up more efficient
new mine operations and revise
production and preparation meth­
ods at older mine complexes. A
computer-controlled surveillance
system is monitoring air quality
and recommending corrective ac­

Computerization of additional
data for decisions concerning
mine layouts and operations in­
creases the workload for engi­
neers and computer technicians.
Computerized solutions affect the
work of machine operators and
heavy equipment mechanics in
surface mines but have little im­
pact on tasks of underground
production crews.

For design and production deci­
sions, computers are used princi­
pally by major companies which
produced about 50 nercent of total
output in 1975.' Safety uses, orig­
inally limited to government spon­
sored research, are spreading to
principal mines.

Room and pillar (including
shortwall) and longwall systems
for underground mining

Using two mining systems, room
and pillar (including shortwall)
and longwall, provides options for
maximizing coal recovery at dif­
ferent sites and makes mining
additional seams economically

Coal mining technologists are
needed to solve technical and
production problems involving,
for example, facility planning,
methods analysis, and quality
control. Roof support labor is
decreased with the longwall and
modified longwall systems; crew
training time also is reduced with
the latter.

Longwall in retreat operations has
been used to improve coal recov­
ery at older mines, as has narrow­
er continuous mining equipment
introduced in recently opened
mines. As a total system, long­
wall still accounts for only abput
5 percent of total underground
mining. Expansion is expected, to
10 percent within 5 years and 1530 percent within 10 years.2


Continuous miners are custom­
ized for-the particular site, some­
times equipped with a roof bolter
and automated. They frequently
are joined (as are longwall shears)
to a sectional belt to provide a
more productive, safer continous
haulage system. Transportation
equipment is also designed and
selected to improve safety and

Additional coal mining technolo­
gists are also needed as first-line
and maintenance supervisors and
as advisers for material and
equipment procurement.
servicing time is required for new
machines. A slurry pipeline elimi­
nates use of such underground
transportation as driver-operated
shuttle and rail cars.

62 percent of bituminous coal was
mined by continuous mining
machines in 1974, compared to 50
percent in I969.3 Hoists have
been introduced recently but are
limited to a few mines; one fullscale slurry system connecting
underground mining machines to
the preparation plant was expect­
ed to be in operation by mid1978.

Improvements in surface mining

Innovations in designing slopes
and hauling spoil material im­
prove maintenance of topogra­
phy; integration of stripping and
haulage utilizes equipment with
special features more efficiently.

As regulations become more rig­
orous, additional geologists, civil
engineers, and environmentalists
are required for planning opera­
tions. New requirements add to
the workload of bulldozer, exca­
vating, and grading machine oper­
ators and heavy equipment me­

Recently enacted and proposed
regulations cause operators to
emphasize environmental preser­
vation. Surface mining accounted
for 3/5 of total production in
1977; an even larger proportion is
likely in the near future.

Advances in preparation processes

Refuse is separated from run-ofmine coal which is washed with
water or chemically bleached to
reduce the number of operations.
Screen heaters size coal more
accurately and reduce dust.

In new facilities, engineers and
technologists plan preparation
plant operations which are pro­
grammed by computer specialists
and monitored by technicians.
Skill requirements of some work­
ers tend to rise in line with in­
creased quality specifications for
usable coal.

Refinements in preparation pro­
cesses are made to meet cleaner
fuel burning standards through
new capita) investments. Also,
clean air standards are upgrading
cleaning requirements at old

Improved maintenance

Downtime of equipment is being
shortened by timely scheduling of
servicing, by using longer lasting
equipment with interchangeable
parts, and by underground service

The hourly output of craft work­
ers and operatives may be im­
proved through better equipment
servicing scheduled by engineer­
in g . technologists and performed
by oilers, greasers, and other
maintenance specialists.

Efficiency measures are expand­
ing with the increase in engi­
neering staffs. Scheduled pro­
grams for maintenance generally
are restricted to larger mines.




'“ Top I4 Coal-Producing Groups in I975.” Coal Age, Apr. I976, d. 36.
^“ Longwall Mining Promotes Itself,” Coal Week, Nov. 1, 1976, p. 7.

-’ Based on Bureau of Mines data.


controlled surveillance system being tested in a
demonstration mine, and expected to spread in use
to principal mines, serves as a safety measure by
monitoring methane, carbon monoxide, and hydro­
gen, air temperature, rate of temperature change, air
velocity, and noise and smoke. The computer sys­
tem analyzes the data, spots trends, and recom­
mends corrective action. The location of seismic
events within one test mine also is being printed out
by a computer located at the surface, another new
technique which enhances mine safety.
Although engineering and science technicians as
well as engineers and computer specialists are using
computers to handle a wider variety of tasks, com­
puterization is not generally affecting the size or
workload of underground production crews after the
method of extraction and type of equipment have
been selected. In surface mining, the application of
computer-developed solutions to environmental
problems adds to the workload of machine operators
and heavy equipment mechanics. Computers are
lessening the workload in scheduling equipment
maintenance and truck loading.

alternative underground mining methods and surface
mining overburden removal techniques.
At some underground sites, gains in output are
being achieved through the replacement of conven­
tional equipment with continuous mining and longwall machines and the installation of Tiaulage sys­
tems capable of moving more coal with less labor.
Remote control of continuous mining and roof bolt­
ing operations and better lighting of the coal face are
innovations designed to improve the productivity,
safety, and mobility of underground workers. More
extensive servicing of equipment by maintenance spe­
cialists is being undertaken at some mines in an ef­
fort to decrease productivity losses from equipment
A slurry pipeline at one mine site has been demon­
strated to require less labor per ton of coal moved
from the mine face to the surface, and a planned
slurry pipeline extension to the preparation plant
should further benefit the mine’s productivity. At a
number of preparation plants, processing operations
are fully automated and are being monitored by a
single centrally located operator. Recently, however,
as loadout operations have been speeded up to a
very fast rate, a second operator has frequently been
added to man the loadout station.
In surface mining, blasting techniques are being
improved. Recently introduced hydraulic excavators
are sometimes used to remove overburden; these are
more efficient than conventional power shovels. The
greater capacity of front-end loaders, shovels, and
draglines also has decreased the workload of heavy
equipment operators. Product quality is being up­
graded by blending coal of varying physical and
chemical properties to produce a more useful mix.

Underground mining systems

Important changes are underway in underground
mining. Since 1960, and especially since the passage
in 1969 of legislation requiring coal mining health
and safety standards, considerations for the layout
and operation of new underground mines in the United States include the European longwall system as
well as the room and pillar system (traditionally used
in this country) and its recent variation, the shortwall system. Since each mine opened is unique, pro­
fessional and technical staffs, including mining engi­
neers, engineering and mining technicians, and ac­
countants, develop comparative analyses of factors
which affect efficiency and safety at the particular
site. Managers use these analyses to determine the
best mining method and equipment.
Safe, efficient underground mining requires mini­
mal exposure of personnel and equipment to roof
fall hazards as the equipment advances into the mine
and, in longwall withdrawal, an orderly collapse of
the overlying strata as rapidly as possible after the
maximum quantity of coal has been removed. The
room and pillar method, which includes short wall, is
universal in old mines and is used for about 95 per­
cent of domestic underground production. Five dif­
ferent pieces of conventional equipment for coal
drilling, cutting, roof bolting, loading, and hauling
may be used in room and pillar. Only three pieces
are needed when a continuous mining machine re­
places the conventional equipment for drilling, cut­
ting, and loading. When self-advancing hydraulic


Computers are being used to raise output and ad­
vance safety in some recently opened mines. They
are being used to design new mine sites, modify ex­
isting layouts, and revise production and preparation
methods at older mine complexes. Computer-simu­
lation techniques are being used by mining engineers
in underground mining to maximize production by
comparing the advantages of various types of mine
entry and extraction methods, by civil engineers in
surface mining to establish grades to determine ton­
nage cutoffs relative to stripping ratios, and to match
capacity of the loading equipment with the capacity
of haulage units. At preparation plants, mechanical
and industrial engineers increasingly are using com­
puters to check materials flow, maintain quality con­
trol, evaluate equipment, and relate changing costs
to coal prices. The use of computer-generated data
also helps line supervisors maximize production
from the primary cleaning equipment. A computer3

western deep coal reserves because of such advan­
tages as minimal overall disturbance of virgin coal
areas, elimination of chain pillars, crosscuts, and
intersections, improvement of ventilation and roof
support, and subsidence control.

jacks are used as roof supports with a continuous
mining machine, the system is referred to as “ shortwall mining” . Conventional equipment, which re­
quires more labor per ton of output compared to
continuous mining machine production, is still being
used with room and pillar in many old mines. (Min­
ing with conventional equipment declined from
46 percent of total production in 1969 to 33 percent
in 1974.)
Longwall mining systems, generally used in Eu­
rope where coal seams are under a heavier depth of
cover than in the United States, are expected to
grow in importance compared with room and pillar
systems. Through the mid-1970’s, longwall installa­
tions were limited to about 80 systems in operation
or on order in the United States, with longwall ac­
counting for about 4 percent of total underground
production. Longwall mining currently is restricted
to seams 3 to 8 feet in height;1 eventually seams 8 to
15 feet high may be longwalled. The first advancing
longwall system in the United States, placed in opera­
tion in 1975 and designed to increase recovery and
forestall rockfalls, reaches depths of 2,500 feet. Sin­
gle-entry longwall may extract about 75 percent of a
coal seam in a single operation and recover 90—95
percent of the minable seam. Tonnage mined by long­
wall amounted to about 5 percent of total production
in 1976. Industry sources expect the longwall share to
increase to 10 percent within 5 years and 15—30 per­
cent within 10 years.
Mining height for shortwall depends on such fac­
tors as depth of support canopies, diameter of the
cutting drum, required support resistance, and type
and height of the transport system. Shuttle cars or
continuous belt haulage are used to transport shortwall extraction. Engineers have proposed an inno­
vative mining technique using a modified system of
shortwall for advancing and longwall for retreating.
This method improves efficiency compared to room
and pillar by increasing recovery of the coal seam
and providing continuous roof support to operators.
However, health and safety regulations prevent its
implementation at this time.
Mechanized longwall equipment consists of a
standard complex comprising powered supports, a
shearer loader or a plow, an armoured conveyor,
and auxiliary devices. The cost of equipment gener­
ally limits longwall installations to mines of 1 million
tons in annual capacity. The number of eastern
longwall mines may double by 1981. Longwall with a
single- or two-entry system is considered the prefera­
ble method by some coal experts for extraction of

Underground face and haulage operations

The production methods and the equipment select­
ed for extracting coal, i.e., working the face in un­
derground mines, differ depending upon such factors
as depth of overburden and thickness and height of
the seam of coal. The haulage method is designed to
integrate with the production method. The use of
conventional equipment is now limited largely to
special needs for room and pillar systems, The share
of underground tonnage mined by conventional
equipment is expected in the near term to continue
to decline. A face crew using conventional equip­
ment consists of 10 to 12 workers while a face crew
using continuous equipment may consist of 8 to 10
Crew size in longwall operations may vary from
10 to 13 workers, depending on the width of the
face; shortwall face crews may number 9 or fewer
workers or as many as 12. Daily output per worker
for longwall face crews usually exceeds that for
shortwall crews.
Continuous mining machines are being used more
extensively in room and pillar systems, Equipment
standardized to comply with health and safety laws
also is frequently customized to facilitate production
at a particular site. The continuous miner shears coal
from the mine face with a rotary cutting drum on
which tungsten carbide steel bits are mounted. Cut­
ter heads vary in width, and bits have different taper
styles for different cutting conditions. Some recent
models which include the latest safety features are
designed to move on wide, heavy crawler treads to
minimize ground pressure and are equipped with a
cab or canopy and a centrifugal dust collector. Me­
chanics spend less time servicing the new machines
since parts are more easily reached; however, as
accessory options are expanded, workloads increase
somewhat since parts inventories must be enlarged.
Continuous mining machine output at the start of
the 1970’s far exceeded the ability of the haulage
system to handle it and of production planners to
incorporate recently legislated safety requirements.
At one plant, continuous miner output was 350 tons
per shift, although its theoretical capacity was 4,000
tons per shift. Not only was the haulage system of
shuttle cars, a belt, and a railway to the surface in­
capable of handling machine output, but it was nec­
essary to shut the continuous miner down while the

'Joe Kuti, Longwall vs. Shortwall Systems (Pittsburgh, Ameri­
can Mining Congress, May 1975).


newly exposed roof area was bolted and newly dug
footage was coated with limestone2
The introduction of remote controls may increase
the productivity of a continuous miner by 10 to 15
percent.3 Pillars of coal are more completely re­
covered in less time when the operator no longer
rides in the machine but instead operates a control
unit linked to the machine either by cable or radio
from a location sometimes 100 feet behind the coal
As the continuous miner advances, roof bolting is
necessary. Some models are now equipped with an
onboard roof bolter so that the operator can install
bolts while within the protective cab. Also, a bolterconveyor remote control mining system has been
developed and tested. Bolter operators continually
bolt the roof as coal, mined by remote control, is

passed through the bolter conveyor to the shuttle
car. This advance speeds the installation of roof
bolts, lessens labor requirements, and raises produc­
tivity by reducing machine downtime.
Mine safety is improved by the introduction of
remote controls which allow two operators to leave
the face area where most injuries occur. Since the
continuous miner operator does not ride the ma­
chine, he is no longer in danger of being hit by moving
equipment in the haulage system. Also, a mobile
bridge operator working no closer to the face than
70 feet replaces a shuttle car operator usually situat­
ed 35 feet from the working face. The use of re­
motely controlled mining machines which take the
miner off the machine (during either mine develop­
ment or production) changes the job content for
operators and helpers on continuous mining, longwall, and roof bolter machines.
In longwall mining, gamma rays are sometimes
used to measure the thickness of the coal and signal
the automatic steering equipment. This improvement

2 Edmund Faltermayer, “ It’s Back to the Pits for Coal’s New
Future,” Fortune, June 1974, p. 248.
3“ New Techniques,” Coal Age, February 1975, p. 118.

Operator controlling longwall planer


may eliminate cutting into rock and add extra inches
of cut to a typical seam. As a longwall shearing or
plowing installation advances along a face, a large
roof beam with a caving shield and a shoulder-toshoulder positioning feature protects the area. Bad
tops and faulty zones are controlled more effective­
ly, no timbering is required, and the complete roof is
covered. Labor savings are realized since both prod­
uction tasks and machine downtime are less than in
traditional room and pillar mining.
A further development, reported by the Bureau of
Mines, is an automated longwall system, equipped
with minicomputers and electric sensors and manned
by a face crew of six, which can mine coal more
safely and productively than is possible using exist­
ing longwall techniques.
Underground haulage systems, designed to match
the capacity of cutting machines, are now carrying
coal more efficiently in a limited number of mines.
Through the use of more durable extensible belts,
conveyor systems require less maintenance and are
extended even around corners as cutting operations
advance. Also, a section foreman or face crew
member, using a laser gun, is able to mount and
align a belt conveyor without the engineering assist­
ance previously required.
In some deep shaft mines, men, coal, and materi­
als are being moved by fully automated hoists. Also,
at one mine, coal is being transported underground
by pipeline. A fully integrated hydraulic transporta­
tion system under construction will move coal di­
rectly from mining machines through a slurry pipe­
line 2.4 miles to a preparation plant. The immediate
mixing of the coal with water and its continuous
containment in the pipeline suppress coal dust and
consequently reduce the danger of mine fires and
explosions. Drivers for shuttle or railcars or utility
helpers for loading are then no longer needed and
the danger of accidents from moving equipment is

using such equipment as scrapers, crawler tractors,
bulldozers, loaders, augers, and continuous miners.
Machine capacity required for removing overburden
is usually greater than for mining coal. Specialized
stripping and underground equipment is available
from manufacturers. Machines include a continuous
cycling hydraulic excavator equipped with a long-arm
option for an expanded digging range and a shortarm option for working extra-hard material; a walk­
ing dragline of modular design for fast jobsite erec­
tion and disassembly; loaders with 4-wheel electric
drive, automatic transmission, and 25-bucket oscilla­
tion for rough terrain; tractors with bottom-dump
trailer coal haulers which travel at speeds up to 40
miles per hour; and highway rear-dump trucks which
vary in size from 35 tons to as much as 350 tons.
Also available is a driverless truck operated elec­
tronically through an automatic master control unit
which programs vehicle steering, direction control,
braking, and speed.
The development of large-capacity earthmoving
machinery has made possible a new method of min­
ing mountaintop coal seams often considered inac­
cessible in the past and of recontouring the land. At
one site, tractor loaders scoop up overburden with
24-cubic yard shovels, increased in capacity in the
past 5 years from 10 cubic yards. End-dump haulers
with more than a 100-ton capacity transfer the over­
burden to adjacent bottoms for fill in selected con­
struction or agricultural sites. The coal is trucked to
a fast-loading tipple for shipment by unit trains to
At another surface mine servicing a mine-mouth
powerplant, a recently installed haulage system fol­
lows a relay coal-handling principle which reduces
labor requirements for trucking. From the pit, coal is
short-hauled by bottom-dump trucks to a loading sta­
tion or stockpile located at a railroad spur where
front-end loaders reload it into railroad cars. As min­
ing operations move to longer distances from the
powerplant, the rail transportation network is ex­
A 273-mile slurry pipeline has been delivering coal
through mountainous terrain from an Arizona mine
to a Nevada electric generating plant since 1970.
Additional pipelines are planned west of the Missis­
sippi. Corporations which plan to build the longest
pipeline, 1,030 miles from Wyoming to Arkansas,
are acquiring legislative grants of eminent domain
for the necessary right-of-way and expect to begin
construction in 1980.

Surface mining

Advances have been made in designing safer and
more efficient surface mines through greater under­
standing of soil mechanics, particularly rock me­
chanics. Through the design change of steepening
the slopes of open pits or spoil piles while at the
same time maintaining their stability, rehandling of
waste is reduced. Material is moved as excavated in
a haulback system by front-end loaders, bulldozers,
and trucks with high mobility.
Depending upon the topography, the material ov­
erlaying a coal seam is removed and the seam mined

Preparation processes

Preparation plants equipped with technologically
advanced processing equipment and materials are
using innovative techniques to recover coal of the

4 “ Consol Installs Slurry Haul System,” Coal Age, July 1977,
p. 17.


desired quality for the utility, metallurgical, and gen­
eral markets and to dispose of the refuse. Both the
increased price of coal and existing and expected
State and Federal government pollution control regu­
lations are giving impetus to the industry’s effort to
produce a cleaner fuel more efficientlyr. As quality
specifications for usable coal have increased, the
skill level and diversity of the engineering, technical,
and craft labor force for its preparation also have
Tasks required to prepare coal for market after its
transfer from the mine include breaking, cleaning,
sizing, washing, drying, loading, and, finally, dispos­
ing of wastes. Technologically advanced preparation
plants are fully automated. An operator located at a
control station controls all handling and processing
equipment from the raw coal-receiving hopper to the
loadout station. Some of the workload of operatives
and laborers is eliminated. Because of the extremely
fast rate of loadout now in practice, a second opera­
tor frequently mans the loadout station. Inside the
plant, the operator scans a panel and is able to de­
termine if a unit is ready to run, is running, or is
down due to mechanical or electrical failure. An
audio system enables the operator to communicate
with the plant rover and an on-shift repairer. How­
ever, despite the high level of automation, more
efficient methods to maximize recovery are being
sought by mechanical, chemical, industrial, and envi­
ronmental engineers.
Preparation plants process coal to meet standards
of size and burning quality. Changes in techniques
and in design of equipment are improving productivi­
ty and product quality. A newly introduced cleaning
technique called the Batac jig system stratifies parti­
cles according to their specific gravity. Cyclones are
used for fine coal, and superfine coal is cleaned by
froth flotation. As new methods increase usable
product, output per employee is increased.
A new method which uses oxygen to desulfur coal
has been demonstrated to remove nearly 100 percent
of pyritic sulfur and in some instances up to 30 per­
cent of organic sulfur. These results compare to best
conventional preparation plant removal of up to 50—
60 percent of pyritic sulfur for selected eastern
coals, with a carbon loss of about 10 percent.5 Also,
a new technique using microwave radiation is being
tested for sulfur removal.
Advances also have been made in pollution con­
trol. New types of screens being introduced resist
wear under abrasive conditions and are quiet. Im­
proved vibrating screens equipped with heated
screencloth size the coal more accurately and cause
less dust. A thermal dryer which transmits heat and5

evaporates water from fine coal with steel balls rath­
er than hot air reduces air pollution at the prepara­
tion plant. Efforts to comply with existing and antici­
pated State and Federal regulations regarding the
management and disposal of refuse have led to the
trial of more advanced technologies for handling
refuse slurry such as mechanical, thermal, and inplace dewatering and chemical solidification.
Refuse bulk from coal preparation is roughly
equivalent to 30 percent of the raw coal washed.
Although most of the 1,500 to 2,000 gallons of water
required to process 1 ton of coal is recirculated,
some water is discharged with suspended solids, i.e.,
clay or fine coal, and dissolved solids.6 Coarse ref­
use sometimes serves as filler material in land recla­
mation, an additional process which increases the
workload of some surface equipment operators.
Service activities

Efforts are being made to reduce downtime
through improved methods and timing for servicing
equipment. (Servicing requirements have increased
partly as a result of new health and safety regula­
tions.) New mining equipment is built of longer last­
ing materials and is designed to lessen maintenance
labor requirements. Replaceable major components
are enabling mechanics to repair crawlers more rap­
idly under*field conditions. Interchangeable parts are
also shortening downtime and extending service life
of such equipment as rotary and percussion drilling
rigs, portable and stationary air compressors, and
high pressure slurry pumps. Automatic fast-fueling
systems are being used increasingly to refuel offhighway equipment at surface mines, and tires are
being changed more speedily with more powerful
weightlifting devices.
Downtime for surface shovels and underground
mining machines has been reduced through the use
of more reliable and easier-to-maintain cables. In
underground mining, damaged trailing cables are
being replaced quickly without splicing through the
use of coupling devices and a portable cold splice
system. At surface mines, the safety and continuity
of electrical transmission to draglines are being im­
proved by maintenance electricians who mount cable
couplers on portable skids.
In some mines, an underground bit-sharpening sta­
tion insures a continuous supply of cutting bits. Ad­
ditionally, preventive maintenance programs help
avert equipment failure and unscheduled rebuilding
by the early replacement of worn parts, including
shovel and dragline teeth, bulldozer cutting edges,
and scraper blades. Also, the number of machines to
1974 Task Force Report, Coal Control Technology (Federal
Power Commission, 1974).

5“ New Techniques,” Coal Age, February 1975, p. 126.


percent. Although the tonnage of bituminous coal
consumed domestically increased about 56 percent
between 1960 and 1976 and its consumption by elec­
tric utilities grew about 155 percent, coal increased
from 23 percent of gross U.S. energy input in 1960
to 26 percent in 1976 and is expected to rise to 29
percent in 1979, according to the Department of
Energy (DOE). In 1985, DOE estimates that annual
coal production will amount to between 994 million
and 1,065 million tons.
The United States has reserves to meet projected
higher levels of production. Recoverable coal re­
serves on January 1, 1974, totaled 434 billion tons;
slightly more than one-half was located west of the
Mississippi River. Using existing technologies, onethird can be mined from the surface; the remaining
two-thirds require more labor-intensive underground
extraction, according to a Bureau of Mines estimate.
At this time, however, many factors are delaying
an increase in coal output..In addition to labor-man­
agement problems and an inadequate supply of
trained labor, considerations retarding the open­
ing of new mines and expansion of existing proper­
ties include Federal and local environmental re­
straints on surface mining, local controls on water
usage for coal transportation, enforcement of air
pollution standards, expanded mine health and safe­
ty protection requirements, State severance taxes on
coal shipped outside the State, and uncertainty re­
garding the prices of competitive fuels and the availa­
bility of investment capital.

be maintained is reduced as mines convert from
conventional to continuous mining machines.
Maintenance labor requirements may be further less­
ened as refinements are made in equipment design.
Health and safety conditions in mines are being
improved by new materials and methods. Mainte­
nance workers are spraying the cutting tools of a
boring miner directly with water to reduce dust con­
centration on coal face areas. The introduction of
additional maintenance tasks to protect the health
and safety of workers tends to lengthen the produc­
tion process and may, to some extent, affect produc­
tivity adversely.

Output and Productivity Outlook

Output of bituminous and anthracite coal and lig­
nite grew at an average annual rate of 2.0 percent
from 1960 through 1977. The yearly rate dropped to
1.5 percent during 1967—77 from 3.8 percent for the
1960-67 period.78 Bituminous coal and lignite pro­
duction has climbed steadily from somewhat less than
% percent of total tonnage mined in 1960 to about
99 percent in 1977; the small remainder is anthracite.
Shifts also have occurred in the distribution of
bituminous production between surface and under­
ground mines. The share of total bituminous tonnage
produced in surface mines (including strip and strip
auger) rose from 31 percent in 1960 to 61 percent in
1970. The 1960-77 average annual growth rate of
bituminous production was 2.5 percent. While output
of bituminous coal from surface mines grew at a
substantial 7.0-percent annual rate during 1960-76,
underground output of bituminous coal declined 0.1
In 1976, roughly 9 percent of U.S. bituminous coal
consumption was accounted for by exports while 91
percent was used domestically; in 1960, exports
amounted to 10 percent. (Because of stockpiling and
inventory withdrawals there is some difference an­
nually between production and consumption ton­
nage.) Between 1960 and 1976 the relative import­
ance of different domestic users of bituminous coal
shifted; consumption by electric utilities rose from
46 to 74 percent while consumption by oven coke
plants fell from 21 to 14 percent, by steel and rolling
mills from 2 to less than 1 percent, and by other
manufacturing and mining industries from 23 to II


Output per production worker hour in coal mining
declined at an annual average rate of 0.1 percent
between 1960 and 1977. During 1967—77, output per
production worker hour decreased at a 3.8-percent
annual rate in contrast to a 5.8-percent annual rate
of increase during 1960 —67 (chart 1).
The l% 7—77 decline in productivity is a result of
the sizable increase of 5.6 percent in production
worker hours compared to a substantially lower gain
of 1.5 percent in output. Output per nonproduction
worker declined at an annual rate of 1.1 percent dur­
ing 1960 —77 and at a 5.9-percent rate during 1967—
From 1960 through 1970, daily output of workers
in surface bituminous mines was consistently more
than double the daily output of workers in under­
ground bituminous mines, according to Bureau of
Mines data. During 1971-76, despite a decline in
surface mining productivity, the daily output of sur­
face bituminous workers amounted to about three
times the daily tonnage mined by underground
workers. Preliminary DOE data for 1977 show a 2percent increase over 1976 in surface mining produc-

7 Based on Bureau of Mines data.
8 Surface mining tonnage west of the Mississippi will probably
continue to rise. In contrast, in Appalachia, an increased propor­
tion of underground production is likely as surface resources east
of the Mississippi are further depleted, coal desulfurization meth­
ods are improved, and additional eastern utilities convert to burn­
ing coal.


Chart 1

Output per production worker hour and related data,
coal mining, 1960-771
Index, 1 9 6 7 = 1 0 0

1 Data for 1 9 7 7 are preliminary.
Source: Bureau of Labor Statistics.


tivity and a decline of 4 percent in underground
productivity. Coal mining productivity, consequent­
ly, has benefited by the continuous rise in import­
ance of surface bituminous production relative to
total bituminous output, a rise from 31 percent of
total output in 1960 to 44 percent in 1970 to 61 per­
cent in 1977.9
Recent declines in productivity reflect, in part,
numerous work stoppages, interruptions or slow­
downs in production stemming from more stringent
safety and health regulations, and a shortage of
trained workers. Labor unrest, evident during the
mid-1970’s in a series of wildcat strikes in eastern
coal fields, culminated during the winter of 1977-78
in the longest coal mining strike in history.
Also, workers’ attitudes have changed. The medi­
an age of working members of the United Mine
Workers (UMW) has dropped from 46 in 1966 to 34
in 1974 and to about 30 in 1977. The average miner
is younger, better educated, more mobile, and more
independent than in the past.
Productivity also is affected by additions to capac­
ity. In anticipation of increased demand for coal,
more new mines have been opened; these have not
yet reached peak production. Also, more old mines
of marginal efficiency are operating now.
The 1969 Coal Mining Health and Safety Act has
required additional tasks to meet standards for dust
suppression, mine lighting, gas control, mine subsid­
ence, and surface control and treatment. The 1977
Federal Mine Safety and Health Amendments Act
expands provisions for mine inspections and mine
job and safety training. Resulting productivity losses
from the added workload may be counterbalanced,
in part, by fewer accidents and improved workman­
ship of better trained miners.
Although over time productivity will be adversely
affected when reserves are so reduced that mine size
and depth are less efficient, the near-term productivi­
ty performance could benefit from an increased
demand for coal, advances in equipment design and
automation, improved linkage of production and
haulage systems, a more experienced, better educat­
ed work force, and more constructive labor-man­
agement relations. A further near-term increase in
the proportion of surface mining could also imme-

diately benefit coal mining productivity. Table 2
shows, by State, the percentage of production mined
at the surface in 1975 and the average daily change
in tonnage per miner from 1969 to 1975. Productivity
gains were sizable in three western States engaged
almost exclusively in surface mining, while in the
eastern United States, where surface mining is more
limited, productivity consistently declined. The im­
pact of the 1977 Federal Surface Mining Act may
affect productivity in States whose surface mining
regulations have been less strict than the new Feder­
al requirements.

Capital expenditures

9 Compared to underground, open-pit (surface) mining can re­
cover a higher percentage of a coal seam, is an economical meth­
od of recovering surface deposits, and eliminates accidental roof
cave-ins. Western strip-mined coal, however, is a low energy subbituminous coal with only about 75 percent the British thermal
unit (Btu) value of eastern or midwestern coal. Despite the poor­
er productivity in deep mines, the cost difference per Btu be­
tween strip-mined western coal and deep-mined eastern seaboard
coal is comparatively narrow because of the lower energy quality
of western coal and its higher transportation cost for shipment by
unit train and transshipment by barge.


Capital spending for new plant and equipment to
extract and process coal, as well as for the purchase
of leases, rose during 1970-75, with the exception
of 1973.1° The 1975 expenditure of $1.3 billion was
60 percent greater than the 1974 investment and tri­
ple the level of capital spending in 1970. (These current-dollar figures do not take into account price ris­
es; the increase in capital outlays since 1970 meas­
ured in constant dollars would be less.)
Although the dollar amount of capital investment
in new plant and equipment for opening new mines
in the next 10 years is unknown, the high degree of
certainty of the opening of new mines and the sub­
stantial size of the probable financial commitment
are indicated by a 1977 report of the Federal Power
Commission. Utility coal demand, according to the
report, is expected to expand 90 percent between
1976 and 1985. Only after closing firm long-term de­
livery contracts with electric utility companies do
major coal mining companies usually risk the sizable
expenditures necessary to add new capacity. An
underground mine typically requires about 4 years to
reach full production, a surface mine 2 years. By
mid-October 1976, coal companies had contracted to
supply two-thirds of the anticipated additional utility
coal demand of 243 million tons, one-third again as
much as their entire 1976 production.
An industry survey completed in mid-January 1978
by McGraw-Hill projects 996 million tons of addi­
tional coal capacity by 1986 from the development
and expansion of 169 new mines planned to begin
operations during the 1977-86 period. Added capaci­
ty, according to the survey, will be 28.5 percent
underground and 71.5 percent surface. West Virginia
is expected to account for 18 percent of new under­
ground capacity, Kentucky 18 percent, Utah 16 per­
cent, Illinois 12 percent, and Colorado 11 percent.
National Energy Outlook— 1976 (Federal Energy Administra­
tion, Feb. 1976), p. 296.

The 1978 fiscal year DOE budget for coal research
and technology development allowed an estimated
outlay of $483 million; the department was reported
to be seeking over $500 million for fiscal 1979. The
Bureau of Mines expended about one-fifth of its $35
million budget in fiscal 1977 on health-related areas
and about four-fifths on safety problems. Roughly
one-third of the budget supported projects at the
Bureau’s research centers while the remainder fi­
nanced outside contracts and grants. Technological
advances in equipment, materials, and methods de­
veloped through these and other R&D efforts un­
doubtedly will have an impact on productivity, staff­
ing, and job requirements in coal mining.

Table 2. Comparison of coal mining productivity in west­
ern and eastern States, 1969 and 1975
Average daily
tonnage per miner


Percentage of
total 1975
production from
surface mines









-1 1 .4
-6 .7
-1 0 .7
-6 .8


Montana ..........
North Dakota ...
Wyoming .........

Illinois ..............
Kentucky ..........
Ohio .................
West Virginia ...

Employment and Occupational Trends


U.S. Department of the Interior, Bureau of Mines.

Employment in coal mining dropped from 186,100
in 1960 to 132,300 in 1968, a low for the decade,
before rising steadily to a high of 217,500 in 1977.
The average annual rate of increase for the 1960-77
period was 1.5 percent. During 1960 —67, employ­
ment fell by an average of 3.6 percent annually, but
rose by 5.5 percent a year, on average, during 1967—
77. The rise in production worker employment was
somewhat slower—1.2 percent annually tor 1960 -77
—reflecting an average annual drop of 3.8 percent
for 1960—67 and an average annual rise of 5.1 per­
cent from 1967 through 1977. The share of total
employment accounted for by production workers
declined from 88 percent in 1960 to 85 percent in
1976 and 82 percent in 1977. The number of produc­
tion workers declined by 3,500 (1.9 percent) between
1976 and 1977; nonproduction workers in­
creased by 6,700 (21.3 percent) over the period (chart
The employment gain in bituminous and lignite
mining, which accounted for about 91 percent of
total industry employment in 1960 and over 98 per­
cent in 1977, was more rapid, an average annual rate
of 2.0 percent for 1960—77, with a 3.0-percent an­
nual rate of decline occurring during 1960 —67 and a
5.9-percent annual rate of increase from 1967
through 1977. The average annual rate of job growth
for production workers, 1.7 percent in 1960—77, was
slower than for total employment.
Employment has shifted between underground and
surface mines, according to Bureau of Mines and
Department of Energy data. Surface mining has
grown in importance—from 16 percent of total min­
ing employment in 1960 to 29 percent in 1976.
Women workers in the industry totaled only 3,000
in 1960, 2,000 in 1968 , 4,700 in 1976, and 5,400 in
1977, or roughly 2 percent of total employment in
each year. Openings for women in the past have
usually been limited to secretarial, typing, and cleri-

Of new surface mining capacity, 4 1 percent is re­
ported to be located in Wyoming, 13 percent in
Montana, and 10 percent each in Texas and New
Research and development programs

The 1977 law establishing the Department of Ener­
gy (DOE) transferred to the new department re­
search and development relating to increased effi­
ciency in the production technology of solid fuel
minerals. The law also provided that research relat­
ing to mine health and safety and to environmental
and leasing consequences of solid fuel mining remain
in the Department of Interior.
Prior to the creation of DOE, the coal utilization
program directed by the Energy Research and De­
velopment Administration (ERDA) sponsored impor­
tant research projects concerned with correcting the
limitations of coal as a product and expanding its
usefulness as a clean energy source. Efforts included
projects for more effectively removing sulfur from
coal, developing a stack cleaning technology which
meets pollution standards, converting coal into syn­
thetic gaseous and liquid fuels, and gasifying coal
underground for power generation.
The Bureau of Mines, a second Federal agency
concerned with coal-related research, supports a
cooperative research program with the coal mining
industry to improve safety and, traditionally, produc­
tivity, through fully funded or cost-sharing con­
tracts. R&D projects have studied such dangerous
conditions as fire and explosions, methane, respira­
ble dust, noise, and postdisaster survival and rescue.
Recent projects include the testing of longwall shield
supports and of a self-powered boring system for
driving mine entries. The industry also does indepen­
dent research on improving productivity and safety.







1 Least squares trend method for historical data; compound interest method for projection.
Source: Bureau of Labor Statistics.


Chart 3

Projected changes in employment in coal mining, by
occupational group, 1970-851
Percent of
Occupational group
in 1970

Percent change




Professional and
technical workers

Managers, officials,
and proprietors

Sales workers

Clerical workers

Craft workers


Service workers


Based on the latest occupational data for 1985 adjusted for revisions of the 1985
employment projections.
Source: Bureau of Labor Statistics.


cal work. Men usually perform not only the tasks
required for extraction, transportation, and prepara­
tion of coal, but also hold managerial and adminis­
trative posts and engineering and technical jobs.
Recently, however, there has been limited entry of
women into production and engineering^and techni­
cal jobs. Underground, women are employed in such
positions as inside laborer, roof bolter, machine re­
pairer trainee, and shuttle car operator and in work
related to mine inspection and safety.
The outlook for coal mining employment (see in­
troductory note for assumptions) is for continuing
growth from 1977 through 1985 at an average annual
rate of 3.9 percent for all employees. Output is ex­
pected to increase significantly during the next de­
cade, especially in surface mining, which requires
less labor per ton of coal mined.

through computers, can be used for decisions con­
cerning mine openings and operations. Greater spe­
cialization within the engineering field is required as
more stringent regulations for health and safety, pol­
lution control, and environmental protection are en­
forced. A new occupation, the environmentalist, has
been added to participate in planning and carrying
out site restoration. Also, more complex mining
equipment requires a higher level of skill on the part
of maintenance mechanics.

Adjustment of workers to technological change

Some displacement of workers resulting from
technological changes in coal mining may be ab­
sorbed in the near term through attrition, as a dis­
proportionate number of workers are approaching
retirement age. Also, supplying the anticipated in­
creased demand for coal will require more workers.
Under 1977 mine safety legislation, minimum
training periods are required for inexperienced work­
ers. The Federal and various State governments as
well as private industry have appropriated funds or
facilities for labor training, and mining technology
programs ate being included in college curricula and
in schools operated by large mining companies.
The United Mine Workers of America (UMWA)
represents about two-thirds of all coal mining work­
ers and accounts for about 50 percent of all coal
produced. In Montana, Wyoming, and Colorado,
some 1,000 surface-mine heavy equipment operators
are members of the International Brotherhood of
Operating Engineers (AFL—CIO). The 3-year con­
tract negotiated by UMWA with the Bituminous
Coal Operators’ Association in March 1978 recogniz­
es the potential impact of technological change in its
emphasis on training to facilitate adjustment to new
or altered work requirements. Included are agree­
ments concerning training preference for senior em­
ployees, protection and training for inexperienced
workers, paid training for maintenance jobs, compa­
ny-financed training for safety commissioners, and
mandatory safety training for all employees.


Craft and operative workers are expected to con­
tinue to make up the largest portion of the work
force, or more than 4 out of every 5 jobs in the in­
dustry. Indications are that through 1985 the largest
increase in the number of employees will be among
operatives, closely followed by craft workers. (See
chart 3 for percentage distribution of all groups and
for projected changes between 1970 and 1985.) The
combined increase in the number of professional,
technical, managerial, and clerical workers is equal
to about II percent of the total net employment
gain, only about one-eighth the projected increase in
the number of operative and craft workers. The pro­
jected employment gains for laborers and service
workers are somewhat less than for the other major
occupational groups presented in chart 3. Such occu­
pational changes for laborers and service workers
are consistent with more capital-intensive operations
and the growth of surface mining relative to under­
ground production.
Job content in a number of occupations is chang­
ing as a result of newer technologies. The work of
engineers, technologists, and technicians has ex­
panded as more complex data, made available

Atwood, Genevieve. “The Strip-Mining of Western Coal," Scien­
tific American, December 1975, pp. 23—29.

Energy Research and Development Administration. Creating En­
ergy Choices for the Future, a National Plan for Energy Re­
search, Development and Demonstration, Vols. I and 2, 1975.

Bethell, Thomas N. Report of workshop on labor in Coal as an
Energy Resource, Conflict and Consensus, proceedings of a
National Academy of Sciences forum, April 4—6, 1977, Wash­
ington, D.C., pp. 252—56.

Falkie, Thomas V. Coal Production Technology o f the Future.
National Coal Association 57th Anniversary Convention, Wash­
ington, D.C., June 17, 1974.

“Coal Resources,” Nuclear Power Issues and Choices. Cam­
bridge, Ballinger Publishing, 1977, pp. 99-108.

Federal Energy Administration. Project Independence, November


Federal Energy Administration. The 1976 Fuel Outlook, February
Harper, Robert L. Jr., N ew Direction in Coal Research. Wash­
ington, Smithsonian Science Information Exchange, 1978.

Straton, John W. “ Improving Coal Mining Productivity,” Mining
Congress Journal, July 1977, pp. 20—23.
U.S. Department of Energy, Energy Information Administration.
Projections o f Energy Supply and Demand and Their Impacts.
Annual Report to Congress, Vol. II, 1977.

Haynes, Roger M. “ Manning the Coal Mines,” Mining Con­
gress Journal, November 1975, pp. 39-41.

U.S. Department of the Interior, Bureau of Mines. Mining Tech­
nology Research, June 1975.

Kaye, Terrence. “ Learning the Job from the Ground Down,”
Manpower, March 1975, pp. 28-31.
Letcher, Duane A., and James P. Gerkin. “West Virginia’s Min­
ing Extension Service—Designing Instructional Materials for
Coal Miner Training,” Coal Age, June 1975, pp. 119—22.

U.S. General Accounting Office. Federal Coal Research—Status
and Problems to be Resolved. Report to Congress by the Comp­
troller General of the United States, February 18, 1975.

Naill, Roger F., Dennis L. Meadows, and John Stanley-Miller.
“The Transition to Coal,” Technology Review, October/November 1975, pp. 20-29.

Westerholm, Leonard W. “ Bituminous Coal and Lignite,” a
chapter from Mineral Facts and Problems, U.S. Department of
the Interior, Bureau of Mines, 1975.

Nordlund, Willis J., and John Mumford. “ Estimating Employ­
ment Potential in U.S. Energy Industries,” Monthly iMbor Re­
view, May 1978, pp. 10-13.

Wilson, Carroll L. Energy: Global Prospects 1985—2000, Report of
the Workshop of Alternative Energy Strategies. New York,
McGraw-Hill, 1977.

Schmidt, William B. “The Minerals Crisis and the Role of Ad­
vanced Mining Technology Research,” Mining Congress Jour­
nal, February 1975, pp. 54—59.

Wood, Robert R. “ Meeting in Appalachia Continues Search for
Greater Productivity,” Coal Age, June 1976, pp. 148D— 158.


Chapter 2. Oil and Gas Extraction


Technology in the 1970’s

Major technological changes in oil and gas extrac­
tion (SIC 13) are underway throughout the industry,
particularly in the development of oil and gas pro­
duction offshore and in enhanced recovery from exist­
ing fields. Offshore drilling will continue to require
additional support personnel compared to onshore
operations, and the trend toward more sophisticated
equipment for exploration, rig monitoring, and other
operations will contribute to the projected increase
by 1985 in professional and technical employees.
Technology and methods in seismic exploration also
are being improved. Research to develop synthetic
fuels, including oil from shale, is being accelerated,
but synthetic fuels are not expected to contribute
significantly to U.S. energy sources by 1985.
Production of both crude petroleum and natural
gas has slowed significantly, with exploratory drilling
for oil and gas during the 1960—77 period well below
the level of activity during the 1950’s. Discovery of
oil and gas has continued to fall behind consump­
tion. The extent to which the upsurge in drilling that
began in 1974 will continue is uncertain and will
depend on factors such as the price of imported and
domestic crude oil, national energy policies, environ­
mental concerns, and the capability and incentive for
petroleum companies to generate capital to locate
and develop new sources of oil and gas. The nation­
al goal to reduce dependence on imported petroleum
will require ever-increasing expenditures as the
search for oil extends offshore and into the Arctic
and other areas where exploration and development
costs are high. Total industry capital requirements
during 1978 through 1984 may reach as high as $145
billion (in 1978 dollars), according to the U.S. De­
partment of Energy.
Employment in oil and gas extraction increased at
an annual rate of 0.8 percent during 1960 -77 and is
projected to increase by an annual rate of 1.7 per­
cent during 1977-85. (See introductory note for the
basic assumptions underlying, these projections.)
Employment of engineers, geologists, and other pro­
fessional and technical workers is projected to in­
crease between 1970 and 1985; the number of drillcrew and related production workers is also expect­
ed to be higher. Among the major occupational
groups, only sales workers are expected to decline
by 1985.

Technological changes are underway in a wide
range of activities associated with oil and gas extrac­
tion. (See table 3 for a brief description of major
innovations.) Some of the most significant changes
are taking place in the production of oil and gas
offshore. Extraction facilities are being expanded
with technological improvements in drill ships, drill­
ing and production platforms, and subsea production
systems extending exploration for and production of
oil and gas into deeper waters. Major efforts also are
being made to recover additional oil from existing
wells through enhanced recovery methods. In drill­
ing operations, rig monitoring systems using onsite
computers are being introduced more widely, and
improvements are continuing in drilling fluids, drill
pipe, drill bits, and related equipment. In explora­
tion, new seismic technology and methods of com­
puter data analysis are being applied. Efforts to
achieve commercial production of oil from oil shale
are expected to continue but production will still be
negligible by 1985.
Although these changes are not expected to bring
about extensive modifications in the size and struc­
ture of exploration, drilling, and well operation and
maintenance crews, the industry increasingly will
require better trained workers with a knowledge of
advanced production technology.
Offshore operations

Offshore production of oil and gas has been in­
creasing for many years. Annual production of crude
petroleum from offshore operations (U.S. Bureau of
Mines and U.S. Geological Survey data) rose from
116.8 million barrels in I960 to 461.9 million barrels
in 1976—a gain of nearly 300 percent. Crude oil
production from offshore facilities rose from 4.5
percent of total production in I960 to 15.5 percent of
the total in 1976. Crude oil production in waters off
Louisiana accounts for about two-thirds of total
U.S. offshore production. Offshore gas production
also increased from I960 to 1976, rising from 3.4 per­
cent to 2I.5 percent of total gas production.
Major improvements in offshore exploration and
development technology have contributed greatly to
the expansion of production. Drill ships and drilling
and production platforms with better stability in

Table 3.

Major technology changes in oil and gas extraction



Labor implications


Offshore production

Offshore production of oil
and gas is expected to contin­
ue to grow in importance.
Between I960 and 1976, total
offshore crude production
rose by nearly 300 percent
and accounted for 15.5 per­
cent of total output in 1976.
Offshore production of gas
also rose significantly. New
technology is being intro­
duced to extend offshore
operations to greater depths.
The “ Bright Spot” seismic
method has been particularly
useful in exploration for nat­
ural gas in the Gulf of Mexico.

Although the size and occu­
pational structure of drill
crews on offshore rigs are the
same as those onshore, a
wide range of workers in ad­
ditional occupations is re­
quired, including radio opera­
tors, cooks, ships’ officers
and crews, and pilots and
crews for drilling vessels,
platforms, barges, and heli­

Oil and gas produced off­
shore will make up a steadily
rising share of total U.S.
output through 1985.

Enhanced recovery

Efforts are increasing to ex­
tract additional oil from exist­
ing wells through the injec­
tion of water, gas, air, chemcal additives, _or heat. In
natural gas extraction, hy­
draulic fracturing and other
methods are being used on a
limited basis in western
States in attempts to recover
gas from tight sandstone

The expansion of enhanced
recovery operations will re­
quire a higher level of skill
and additional engineering,
operating, and field staff.

According to the National
Petroleum Council, the po­
tential daily producing rate in
1985 from enhanced recovery
methods other than primary
or secondary could vary from
0.3 million barrels per day at
$5 per barrel to 1.7 million
barrels per day at $25 per
barrel (in 1976 dollars). Peak
production of 0.25 to 3.5 mil­
lion barrels per day is esti­
mated for 1995.

Innovations in explora­
tion and drilling

New seismic methods are
raising efficiency in explora­
tion. New and improved drill­
ing and production systems
are being introduced as off­
shore operations expand.
Computers and instrumenta­
tion systems are being applied
on drilling rigs for monitoring
and analysis of operations.
Special equipment that can
withstand extreme weather
conditions is being used to
carry out exploration and
drilling in the Arctic.

As exploration for oil and gas
is intensified, more petroleum
geologists, geophysicists, and
related workers will be re­
quired. During 1970-85, the
number of geologists is ex­
pected to more than double.
The proportion of the work
force involved in offshore
operations is expected to
continue to increase. Com­
puter monitoring systems
being adopted more widely
will require more engineers
and technicians at drilling

offshore exploration, drilling,
and production will be exten­
sive over the next decade as
drilling depths increase and
subsea production systems
are improved and used more

Oil shale development

Efforts to develop lower cost
methods to extract oil from
the vast oil shale deposits in
the West continue. Factors
which will determine the pace
of development include the
environmental impact, availa­
bility of water for production
operations, rate of return on
investments, and Federal pol­
icies and regulations.

The composition of occupa­
tions in aboveground oil shale
operations differs from con­
ventional drilling for petro­
leum in that perhaps 50 per­
cent of the work force may be i
involved in mining opera­
tions. According to the U.S.
Department of Energy, labor
requirements for a 50,000
barrel per day oil shale prod­
uction facility would vary by
type of process, with an esti­
mated 1,100 workers required
for a mining and surface re­
tort facility, 200 workers for
an in-place operation, and
700 workers for a modified
in-place installation.

According to the Federal
Energy Administration, no
plants are anticipated before
1985 unless Federal financial
assistance is forthcoming.
The U.S. Bureau of Mines
estimates that oil shale will
account for less than I per­
cent of total energy con­
sumed in 1985 and 3.5 per­
cent in 2000.


rough seas and the capability to drill to greater
depths are being introduced. Subsea production sys­
tems are being developed which will enable crews to
complete wells and perform other operations at the
greater depths of the outer continental shelf. These
systems are expensive, however, and U.S. operators
surveyed do not expect extensive use of these sys­
tems on the outer continental shelf until the 1980’s. •
New equipment is being developed to monitor and
control subsea production operations from remote
locations; a corresponding reduction is anticipated in
the use of workers in undersea operations.
Subsea pipelines of increased diameter and
strength are being laid in deeper waters further off­
shore to transport oil to storage and processing facil­
ities. Several new production facilities designed for
operation in very deep water are being tested. These
include different types of platforms for operations
above and below the surface of the ocean. One pro­
totype subsea production system being developed
and tested in the Gulf of Mexico illustrates evolving
technology in offshore operations. The production
complex is first lowered and anchored on the sea
1 “ U.S. Operators See Delay for Subsea Systems,” Oil and
Gas Journal, Apr. 21, 1975, p. 42.

Offshore production platform


floor. Next, a drill ship anchored above the unit
completes a number of wells through special open­
ings on the submerged structure. The system is de­
signed to pipe oil and gas to facilities onshore or to
an offshore tanker. The system features remote
monitoring, control, and maintenance from a ship or
shore facility and contains special devices to control
or prevent oil leaks.2
As the proportion of oil and gas produced offshore
continues to increase over the next decade, addition­
al large numbers of workers will be needed to under­
take and support exploration and production opera­
tions extending to ever-greater water depths off­
shore. Although drill crew size and occupational
structure in offshore operations generally are the
same as in onshore operations,3 additional support
workers essential in offshore operations include ra­
dio operators, cooks, ships’ officers and crews, and
pilots and crews for drilling vessels, platforms,
barges, and helicopters. Moreover, additional man­
agement and technical support are required to main­
2 “ Exxon Installs Subsea System in Gulf of M exico,” Petro­
leum Engineer International, Jan. 1975, p. 17.
3 A typical drill crew on a rotary rig consists of a driller, a der­
rick operator, an engine operator, and two helpers or “ rough­

tain, select, and design equipment. The expansion of
offshore drilling activity will continue to require sub­
stantial and increasing capital outlays. According to
the Bureau of Mines, completing a well offshore in
the Gulf of Mexico costs as much as nine times the
average for a well completed onshore.4

1976 dollars). Peak production of 0.25 to 3.5 million
barrels per day is estimated for 1995.8
Exploration and drilling

Innovations in exploration and drilling are opening
up new areas for petroleum development. In explo­
ration, advances in seismic technology and methods
are improving depth penetration, and advanced
computer methods are being used more extensively
to process and interpret data. Marine seismic activi­
ties are increasing in importance as offshore explora­
tion activities are expanded. Other developments
underway in exploration include the evaluation of
photographs obtained by satellite, the use of aircraft
equipped with high-sensitivity magnetic devices to
survey vast areas in the Arctic and elsewhere, and
further research on techniques to detect earth forma­
tions likely to contain oil which are difficult to detect
by conventional seismic methods.
Although research to develop new methods of
drilling is in progress, rotary drilling is expected to
retain its prominence, with improvements possible
from the wide range of technological advances un­
derway in drilling fluids, drill pipe, drill bits and rig
equipment, and instrumentation. The outlook is for
drilling rig efficiency to increase as the average age
of operating rigs declines. Many technological im­
provements are below the surface rather than above­
ground, such as the anticipated use of “ down hole”
motors. Drill-crew size would remain largely unaf­
fected, but the new technology may require that
drill-crew workers increasingly monitor rather than
manually manipulate drilling and related equipment.
Automated equipment for racking drill pipe and mix­
ing fluids used in drilling, for example, could ulti­
mately reduce physical involvement in these laborintensive operations, but widespread diffusion of
these technologies is not imminent.
Important and costly innovations in exploration
and development are underway in Arctic areas.
These include techniques to package drilling and re­
lated equipment for transport by air, the use of air
cushion vehicles for transportation across vast land
expanses, the use of helicopters and specially
equipped launches to carry out seismic monitoring,
and the erection of structures to protect crews and
equipment from severe weather conditions. Special
equipment to store and transport oil, including tank­
ers with ice-breaking capability, also is associated
with Arctic operations.

Enhanced recovery methods

Efforts are increasing to extract additional petro­
leum from wells which have ceased to produce prof­
itably as recent higher prices for oil make enhanced
recovery operations more economically feasible. The
expansion of enhanced recovery operations will re­
quire a higher level of skill and additional engineer­
ing, operating, and field staff. The U.S. Department
of Energy states that enhanced recovery methods
must be accelerated to extend the life of U.S. oil
and gas reserves and to provide vital additional
sources of oil and gas over the next decade and
Secondary recovery involves the injection of wa­
ter or gas into oil-bearing sands in order to recover
oil which can no longer be extracted during primary
recovery operations. Tertiary recovery, in limited
but growing use, involves heat, chemical additives,
or other techniques to increase recovery of oil. In
natural gas recovery, massive hydraulic fracturing
and other methods are being used on a limited basis
in Colorado and elsewhere to make available gas
presently locked in sandstone formations with low
Anticipated advances in recovery methods are
expected to raise average recovery rates over the
next decade and bring about major additions to sup­
ply. According to the National Petroleum Council
(NPC), the proportion of total domestic production
achieved by secondary and tertiary fluid injection
methods increased from 30 percent in 1960 to an es­
timated 39 percent in 1970.6 This proportion reached
about 50 percent by 1976, according to a more re­
cent report by the NPC.7 The NPC report also states
that the potential daily producing rate in 1985 from
enhanced recovery techniques other than convention­
al primary and secondary methods could vary from
0.3 million barrels per day at a price of $5 per barrel
to 1.7 million barrels per day at $25 per barrel (in
4 Offshore Petroleum Studies—Historical and Estimated Future
Hydrocarbon Production from U.S. Offshore Areas and the Im­
pact on the Onshore Segment o f the Petroleum Industry, Informa­
tion Circular 8575 (U.S. Department of the Interior, Bureau of
Mines, 1973), pp. 22-23.
5J. E. Kastrop, “Can Massive Frac Unlock Big Gas Reserves?”
Petroleum Engineer, Feb. 1975. pp. 27—31.
6 National Petroleum Council, U.S. Energy Outlook—Oil and
Gas Availability (Washington, D.C., Dec. 1972), p. 317.
7 National Petroleum Council, Enhanced Oil Recovery (Wash­
ington, D.C., Dec. 1976), base-case estimate.

Computers and instrumentation in drilling

Sophisticated data collection and analysis systems
using onsite computers are being introduced on a
8 Ibid. p. 6.


limited but growing basis in drilling operations, parti­
cularly in deep well, wildcat, and offshore drilling.^
A major advantage of computer data analysis in
drilling operations is the capability it provides for
measuring and correlating a wide range of variables
with increased accuracy. Modern monitoring sys­
tems reportedly achieve operating economies by
making possible greater drill penetration rates, a
reduction in chemicals used in drilling operations,
the extension of drill-bit life, and a reduction in test­
ing activities. They may also improve safety and
provide advance indication of potential drilling inter­
The number of employees required to staff a com­
plete computer monitoring and analysis system
ranges from one to three persons per shift, depend­
ing upon drilling rates and the number of variables
monitored. The less complex monitoring systems
that are in general use to measure basic drilling para­
meters also are being improved, but these systems
do not incorporate computers or require special
technical staff.
Although experts differ regarding the extent of
future use of computer monitoring systems, most
expect technology to improve and its application to
expand over the next decade.
Oil shale development

Oil derived from oil shale deposits in Colorado,
Wyoming, and Utah has a long-range potential to
become a supplement to crude petroleum if environ­
mental problems can be resolved and if production
costs can be lowered. Experimental work on shale
oil production has been underway in the United
States for many years. The U.S. Bureau of Mines
and private company pilot and demonstration facili­
ties are presently staffed by a relatively small num­
ber of employees. A significant step toward commer­
cial development was taken in 1974 with the lease of
Federal lands in the West to private companies for
prototype development.
One major method of oil shale production involves
either surface or underground mining of shale and
the subsequent crushing and transport of the shale to
vessels called retorts. In the retort, heat turns a
substance called kerogen, embedded in the shale,
into a form of heavy crude oil. A second method
receiving increased attention is in-place processing
whereby shale is heated underground and the oil and
gas drawn up to the surface. Surface mining and
retoring operations are not required. One large com-9*O
9 “ On-Site Instruments Help Avoid Troubles, Optimize Drill­
ing’’, Oil and Gas Journal, Sept. 24, 1973; John L. Kennedy,
“ Data Monitoring on Today’s Rig,’’ Oil and Gas Journal, Sept.
24, 1973; W. D. Moore III, “ Computer-Aided Drilling Pays Off,’’
Oil and Gas Journal, May 31, 1976, pp. 56—60.


pany is developing a modified in-place process which
involves some surface mining but underground re­
The work force required to produce oil from shale
by surface mining methods differs markedly from
requirements in conventional crude petroleum drill­
ing and production operations. In oil shale opera­
tions, about 50 percent of the work force in a mining
and surface retorting operation reportedly would be
engaged in mining operations. The remaining 50 per­
cent typically would be engaged in administrative,
technical, retorting, and maintenance activities.
Although the potential of oil shale is widely recog­
nized, the timetable for commercial development
remains uncertain. Factors which will vitally affect
the pace of commercial development include the
impact of oil shale development on air pollution,
water quality, and land use; availability of water and
other resources to develop the industry; future costs
of petroleum and other energy sources; ultimate
rates of return on investments in production facili­
ties; and Federal policies and regulations related to
oil shale development. According to a Federal Ener­
gy Administration report, no commercial-size oil
shale plants are expected to be built by 1985, unless
Federal financial assistance is forthcoming. >0 The
U.S. Bureau of Mines also foresees a relatively
small role for oil shale over the next 25 years and
estimates that Government-supported oil shale prod­
uction will be the source of less than 1 percent of
total energy consumed in 1985 and 3.5 percent in

Production Outlook
Oil and gas production rose at an average annual
rate of 2.7 percent between 1960 and 1976.12 This
reflected an increase in crude petroleum production
of 1.5 percent per year over the period; natural gas
of 3.7 percent; and natural gas liquids of 4.0 percent.
Oil and gas field services (SIC 138) increased by 5.1
percent during 1960—76, but rose at a substantially
higher average annual rate of 15.7 percent during the

10 National Energy Outlook— 1976, (Federal Energy Administra­
tion, Feb. 1976), p. 315.
11 Walter G. Dupree, Jr., and John S. Corsentino, United States
Energy Through the Year 2000 (Revised) (U.S. Department of the
Interior, Bureau of Mines, Dec. 1975). pp. 27 —28.
,2Federal Reserve Board (FRB) index of production for SIC
13, Oil and gas extraction. In preparing this measure, the FRB
uses value-added weights to combine the individual series. Value
added is calculated by subtracting from each industry’s gross val­
ue of products the costs of materials, supplies, containers, fuels,
purchased electrical energy, and contract work, but not the cost
of purchased business services.

period 1970-76 as firms expanded operations.
Production of both crude petroleum and natural
gas has slowed significantly in recent years. Crude
petroleum output peaked in 1970 and declined at an
average annual rate of 2.9 percent between 1970 and
1976. Natural gas output was highest in 1973 and
declined between 1973 and 1976 at an annual rate of
5.1 percent. During the earlier period, 1960—70,
however, production of crude oil increased at an
annual rate of 3.4 percent. Natural gas production
increased during 1960—73 at an annual rate of 5.2
According to U.S. Department of Energy projec­
tions-, domestic production of crude oil in 1985 may
range between 8.3 and 9.5 million barrels per day,
compared to 8.2 million in 1977. Production of natu­
ral gas in 1985 is projected to range between 15.1
and 18.9 trillion cubic feet annually, compared to
18.7 trillion produced in 1977.13
The outlook is for the recent upsurge in drilling
activity to continue. The number of wells drilled in
the United States in 1977 (an estimated 46,000) ex­
ceeded the number of wells drilled in 1973 by 67
percent, but this total is still significantly below the
record of about 58,000 wells drilled in 1956. Howev­
er, the number of exploratory holes drilled in 1977 was
the largest since 1966. <4 Incentives for accelerated
drilling activity include higher prices for petroleum,
increased leasing of offshore areas, higher prices for
intrastate natural gas, and approval of the transAlaska pipeline. A number of oil companies continue
to plan for high levels of spending for exploration
and development.15
Some shortages of production equipment and
workers could result if drilling activity remains at
high levels. Tubular goods (casing, drill pipe, etc.)
and drilling rigs, reportedly difficult to procure dur­
ing late 1974 and early 1975, could once again be­
come in tight supply if projected higher levels of
drilling are realized. Demand for offshore production
equipment is expected to remain strong into the
1980’s, although a surplus of offshore drilling rigs
existed in the fall of 1975. In addition, some experts
foresee a shortage of trained personnel to carry out
exploration, drilling, and production operations.
Production companies and drilling contractors are
expected to accelerate programs to recruit and train
new employees.

Manufacturers of equipment for the oil industry
are expanding capacity to assure an adequate supply
of oilfield machinery to sustain increased exploratory
and development drilling. According to the U.S.
Department of Commerce, shipments by the oilfield
machinery industry are projected to reach $4 billion
in 1978, more than triple the shipments in 1972.16

Imports of crude petroleum have been increasing
as domestic consumption of crude petroleum contin­
ues to exceed U.S. production. By 1977, imports of
crude oil were equal to nearly 50 percent of total
domestic petroleum consumption, compared to 19
percent in 1960.17
Oil imports are projected by the U.S. Department
of Energy to range between 9.1 and 12.5 million bar­
rels per day in 1985.<8 The level of imports will be
influenced to some extent by measures undertaken
within the United States to increase domestic supply
and to conserve energy. Specific actions which could
contribute to reduced dependence on imported oil
include increasing Federal leasing on the outer conti­
nental shelf, the opening of naval petroleum reserves
to commercial development, removing impediments
to nuclear power development, and reducing demand
for petroleum through actions such as improving the
fuel efficiency of new automobiles and providing
incentives for fuel conservation in industrial plants,
offices, and homes.

Finding and producing crude petroleum and natu­
ral gas require vast capital outlays. Capital expendi­
tures by the oil and gas industry totaled $18.5 billion
in 1977, more than triple the $5.4 billion spent in
The outlook is for higher levels of capital spending
since the cost to discover and develop oil and natu­
ral gas is expected to continue to increase signifi­
cantly. Costs will rise with the shift of activity to
offshore and remote land areas in Alaska and else­
where, the more widespread application of enhanced
recovery methods, the general trend toward drilling
to deeper depths, and increased spending for conser­
vation and pollution control. Cumulative capital re16 U.S. Industrial Outlook, 1978 (U.S. Department of Com­
merce, Industry and Trade Administration, Jan. 1978), pp. 372—
17 National Energy Outlook— 1976 (Federal Energy Administra­
tion, Feb. 1976), p. XXV1I1.

13 Projections of Energy Supply and Demand and Their Im­
pacts, Annual Report to Congress, Vol. II, 1977 (U.S. Depart­
ment of Energy, Energy Information Administration), chaps. 6
and 7, pp. 127-75.
14 Oil and Gas Journal, Jan. 30, 1978, p. 143.
15 “ Fast U.S. drilling Face to carry Over into Early ‘77,” Oil
and Gas Journal, Nov. 29, 1976, pp. 19—22.

18 Projections o f Energy Supply and Demand, Executive Sum­
mary, p. 1.
19 Projections o f Energy Supply and Demand, p. 50.


quirements in the oil and gas industry for the period
1978 through 1984 are projected to range from $114
to $145 billion (1978 dollars).20

94 percent between 1970 and 1985 as additional pe­
troleum engineers, geologists, and other professional
and technical employees are required for more ex­
tensive and complex exploration and development
activities. This may continue to tax the industry’s
ability to train and develop technical employees and
may result in severe competition among employers
for experienced professional and technical person­
nel. The largest occupational group in oil and gas
extraction—operatives—accounted for 37 percent of
total industry employment in 1970 and is expected to
increase by 63 percent during 1970-85 as employ­
ment in drill-crew and other operative occupations is
expanded. Managerial workers are projected to in­
crease by 73 percent, clerical workers by 64 percent,
and craft workers by 55 percent. As indicated in
chart 5, smaller gains are anticipated for service
workers and laborers who, combined, account for
only slightly more than 3 percent of industry em­
According to the NPC, the upsurge in exploration
and drilling since about 1971 could result in a contin­
ued shortage of qualified workers in a wide range of
exploration, drilling, and production activities, with
personnel skilled in the interpretation of geophysical
data in especially short supply.21 Some firms are
expanding programs to recruit and train new employ­
ees, particularly for assignment to drilling crews,
where turnover traditionally is high because the
work is difficult and must be carried out in all types
of weather. One result is that the productivity of
previously inactive drilling rigs recently brought into
operation is lower because of shortages of skilled
workers for drilling crews. The NPC report also
points out concern within the industry that near-term
shortages of skilled workers in firms which produce
equipment for the oil industry, including welders,
machinists, and pipefitters, could slow delivery of

Employment and Occupational Trends

Total employment in oil and gas extraction
reached a record high of 404,500 in 1977, up by
about 31 percent over 1960 (chart 4). The significant
rise in exploration and drilling activities during 197177 resulted in the net addition of 140,000 workers, a
reversal of the steady decline in employment which
occurred during the decade of the 1960’s.
Although the number employed in the industry
was significantly higher in 1977 than in 1960, the
average annual rate of change over this period in­
creased by only 0.8 percent. Between 1967 and 1977,
however, employment increased at the substantially
higher average annual rate of 3.5 percent; for the
last 6 years of this period, employment ceased to
decline and turned up sharply at a rate of 7.6 percent.
In contrast, employment had declined at an annual
rate of 1.5 percent between 1960 and 1967. Produc­
tion worker employment during 1960—77 increased
at an annual rate of 0.4 percent, but, following the
pattern for total employment, increased at an annual
rate of 8.7 percent during 1971-77. The proportion
of production workers to total employment in oil and
gas extraction declined from 73 percent of the work
force in 1960 to 70 percent in 1977.
Total employment in the crude petroleum, natural
gas, and natural gas liquids components of the indus­
try (SIC’s 131, 132) declined at a rate of 0.5 percent
during 1960—77; in oil and gas field services (SIC
138), however, employment rose at a rate of 2.2 per­
cent in 1960 —77 and 11.5 percent during the 1971 —
77 period as the number of wells drilled rose sharp­
lyThe outlook is for total employment in oil and gas
extraction to further increase as exploration and
development activities are accelerated. The average
annual rate of employment increase is projected to
be 1.7 percent during 1977—85, as indicated in chart
4. (See introductory note for basic assumptions un­
derlying these projections.)

Adjustment of workers to technological change

Innovations in equipment and processes in crude
petroleum and natural gas extraction are not expect­
ed to bring about layoffs, downgrading, or reassign­
ments over the next decade and, consequently, for­
mal provisions in collective bargaining agreements
relating to seniority, wages, job security, and related
topics are not expected to be called into effect.
The oil and gas extraction industry is not highly
unionized. According to a BLS study of the crude
petroleum and natural gas component of the industry
(SIC 131), only about 40 percent of the work force is
employed in establishments having collective bar-


The structure of occupations in oil and gas extrac­
tion is expected to undergo change between 1970
and 1985. All of the major occupational groups pre­
sented in chart 5 are projected to increase, with the
exception of sales workers, who accounted for less
than 1 percent of total industry employment in 1970.
Professional, technical, and kindred workers are
expected to achieve the greatest gains, increasing by

National Petroleum Council, Availability of Materials, Man­
power and Equipment for the Exploration, Drilling and Produc­
tion of Oil— 1974—76 (Washington, D.C., Sept. 1974), p. 21.

20 Ibid, p. 54.


Chart 4

Employment in oil and gas extraction, 1960-77,
and projection for 1977-85
Employees (thousands)
Average annual percent change’
All employees

1 9 6 0 -7 7 ........................... . 0 .8
1 9 6 0 -6 7 ................... - 1 . 5
1 9 6 7 -7 7 ................... . 3 .5
1 9 7 7 -8 5 (projection)

. . . 1.7

Production workers

0 4
1 9 6 0 -6 7 ................... - 2 . 4
1 9 6 7 - 7 7 ..................... .3 .8

1 Q fiO -77











1 Least squares trend method for historical data; compound interest method for projection.
Source: Bureau of Labor Statistics.


Chart 5

Projected changes in employment in oil and gas extraction,
by occupational group, 1970-851

Occupational group

Professional and
technical workers

Percent of
in 1970

Percent change




Managers, officials,
and proprietors


Sales workers


Clerical workers


Craft workers




Service workers




1 Based on the latest occupational data for 1985 adjusted for revisions of the 1985
employment projections.
Source: Bureau of Labor Statistics.





gaining agreements covering a majority of their
production workers.22
The degree of unionization in the crude petroleum
and natural gas industry varies by region. In Califor­
nia, about three-fourths of the work force in 1972
was in establishments where labor-management
Industry Wage Survey—Crude Petroleum and Natural Gas
Production, August 1972, Bulletin 1797 (Bureau of Labor Statis­
tics, 1973).

agreements covered a majority of production work­
ers; in Louisiana and Oklahoma—two leading oilproducing States—the proportion was slightly more
than one-fourth, and in Texas, about one-half. Most
workers in establishments with collective bargaining
provisions are represented by independent unions
(those not affiliated with the AFL—CIO) or by the
Oil, Chemical and Atomic Workers Union, an
A FL-C IO affiliate.

National Petroleum Council. Availability o f Materials, Manpower
and Equipment for the Exploration, Drilling and Production of
Oil— 1974—76. Washington, D.C., September 1974, 212 pages.

“ API—A Special Report—Oil Still the Key Fuel.” Oil and Gas
Journal, November 10, 1975, pp. 159—78.
Daily, J.J. “ How a Crisis Began,” Petroleum Today, 1974, Vol­
ume 15, Number 2. Washington, D.C. American Petroleum Insti­
tute, pp. 1-9.

National Petroleum Council. Enhanced Oil Recovery. Washing­
ton, D.C., December 1976, 231 pp.

“ U.S. Drilling to Surge Again This Year.” Forecast Review 1978. Oil and Gas Journal, January 30, 1978.

National Petroleum Council. U.S. Energy Outlook; A Report of
the National Petroleum Council Committee on U.S. Energy
Outlook. Washington, D.C., 1972.

Federal Energy Administration. Project Independence. November
1974, 337 pages.

Petroleum/2000. Special issue of the Oil and Gas Journal, August
1977, 538 pages.

Federal Energy Administration. National Energy Outlook —1976.
February 1976, 323 pages plus appendixes.

“Tough Training Rules Imposed Off U .S .,” Oil and Gas Journal,
January 16, 1978, pp. 46—49.

Federal Power Commission. National Gas Survey, Volume 1,
Chapter I, “ A Time for Decision and Action” (preliminary
draft). February 1975, 51 pages.

U.S. Department of Energy, Energy Information Administration.
Projections o f Energy Supply and Demand and Their Impacts,
Annual Report to Congress, Vol. II, 1977, 296 pages.

“ Future Rigs: More Capable—More Specialized.” Oil and Gas
Journal, September 19, 1977, pp. 113—16.
Gonzales, Richard J. “ Economics of Energy,” Petroleum Today,
1974, Volume 15, Number 1. Washington, D.C., American
Petroleum Institute, pp. 1—11.

U.S. Department of the Interior, Bureau of Mines. Assessment of
U.S. Petroleum Supply with Varying Drilling Efforts. By T.M.
Garland, M. Carrales, Jr., and J.S. Conway. Bureau of Mines
Information Circular 8634—1974, 36 pages.

Kastrop, J. E. “ Can Massive Frac Unlock Big Gas Reserves?” Pe­
troleum Engineer, February 1975, pp. 27-31.

U.S. Department of the Interior, Bureau of Mines. Offshore Pe­
troleum Studies. By L.K. Weaver, C.J. Jirik, and H.F. Pierce.
Bureau of Mines Information Circular 8575— 197,3. 30 pages.

Kennedy, John L. “ Data Monitoring on Today’s Rig,” Oil and
Gas Journal, September 24, 1973, pp. 119—25.
Kinney, Gene T. “ Industry Split on Federal Synthetic-Fuels Pro­
posals, Oil and Gas Journal, October 27, 1975, pp. 39-42.

U.S. Department of the Interior, Bureau of Mines. United States
Energy Through the Year 2000 (Revised). By Walter G. Du­
pree, Jr., and John S. Corsentino. December 1975, 65 pages.

Moore, W.D. III. “ Computer-Aided Drilling Pays Off,” Oil and
Gas Journal, May 31, 1976, pp. 56—60.

West, Jim, and David Lange. “ Industry Spending in U.S. to
Reach New All-Time High.” Oil and Gas Journal, February 21,
1977, pp. 27-31.

Moore, W. D. III. “ Crew Training Given Top Priority,” Oil and
Gas Journal, January 2, 1978, pp. 85-89.


Chapter 3.

Petroleum Refining

of very small refineries increases. The outlook to
1985 is for a resumption of the decline.

Technological changes in the refining industry are
being made in response to shifts in crude oil supply,
changing demand for petroleum products, and envi­
ronmental and energy considerations, in addition to
the usual incentives of greater productivity and low­
er costs. These changes are primarily in the areas of
cracking, hydrotreating, and reforming, in associa­
tion with advanced instrumentation and computer
control. The outlook is for greater emphasis on pro­
cesses for desulfurization and octane improvement.
Because the industry is capital intensive, the shortrun effects on labor are likely to be minimal, but in
the longer run they will alter job content and may
reduce employment growth.
Productivity rose sharply from 1960 to 1977, at an
average rate of 4.3 percent annually compared with
2.6 percent in all manufacturing. From 1967 to 1977,
the rate was 3.0 percent. The outlook to 1985 is for
productivity to rise but at a slower rate than in the
last decade. Many uncertain variables affect the out­
look including crude imports, gas supplies, and gov­
ernment environmental and energy policies. But for
the most part, the industry’s productivity in the next
decade will depend on the Nation’s economic growth
and consequent energy needs. Changes in govern­
ment policies or in the international situation are not
dealt with in this chapter.
Capital investments have been increasing almost
steadily since the I960’s. By January 1977, operable
capacity had risen 50 percent over the decade and 20
percent since January 1973, reversing concerns
about capacity shortages. Due to uncertainties of
supply and demand and rapidly rising costs, howev­
er, there is no general agreement on future capital
outlays for capacity expansion. But large invest­
ments are anticipated to accommodate changing
demand for the industry’s products and government
environmental and energy policies.
About 160,000 people were employed in the indus­
try in 1977, the largest number since 1962. Following
a sharp decline in the first half of the 1960’s reflect­
ing very rapid productivity growth, employment was
relatively stable until 1973. Since 1973, however,
employment has been moving up as technology
changes require more unit labor and as the number

Technology in the 1970’s
Petroleum refining is a series of processes of phys­
ical separations and chemical reactions. It involves
three major groups of processes: Separation, conver­
sion, and treating. First the hydrocarbon compounds
in the crude oils are separated through heating and
distillation to recover the lighter products such as
gasoline, kerosene, and distillate fuels. Some com­
pounds heavier than gasoline may be “ cracked” or
chemically converted into higher quality products.
Desired products may also be built up by chemical
reactions such as alkylation. Others are chemically
rearranged, by catalytic reforming, for example. In
addition, at some stage of manufacture the products
may be treated to remove impurities such as sulfur
or metals.
In the past, the objective of U. S. refineries was
to maximize gasoline production rather than the out­
put of heavier fuels. Consistent with this objective,
they were geared, primarily, to producing high-oc­
tane gasoline from low sulfur (sweet) crude petro­
leum. Moreover, in general, there were no restric­
tions on levels of sulfur and other impurities in pe­
troleum products.
However, the picture is changing. First, there
appears to be a long-term shift in emphasis from
gasoline to heavy fuels based on a projected slow­
down in gasoline demand and an increase in the
market for heavy fuels as a result of the natural gas
shortage. Second, environmental protection regula­
tions encourage or require low-sulfur, low-lead prod­
ucts, as well as the reduction of noxious wastes
from the refining process itself. At the same time,
however, the availability of low-sulfur varieties is
declining. As a result of these conditions, refineries
must make adjustments to accommodate product
In addition, changes are taking place in the struc­
ture of the industry. Although a number of small
refineries are being built, in general, process units
are becoming larger, and functions are being consoli­
dated to increase productivity. Average capacity has
increased very sharply to over 60,000 barrels per day

(as of January 1977), and the labor implications (dis­
cussed in the employment section) are significant.
Capacity varies considerably among refineries, how­
ever, ranging from 500 to 640,000 barrels per day. In
general, the smaller plants consist of a crude oil dis­
tillation unit plus the necessary auxiliary units, while
the larger refineries are considerably more complex.
They include, in addition to distillation facilities,
cracking, reforming, coking, hydrogen-treating, alky­
lation, fuel desulfurization, and other processing un­
its. Key advances in the basic refining processes in
the last decade, their labor impact, and their rate of

Table 4.

difusion are presented in table 4 and discussed in
greater detail below.
Computer control

High-speed digital computers improve production
efficiency and raise quality through more precise
control of the production process. Other benefits
also are often cited, such as better technical and
operating data and improved plant safety.
In process control, digital computers are applied
to various refining processes ranging from crude dis­
tillation to on-line gasoline blending. Open-loop con-

Major technology changes in petroleum refining

Labor implications



Computer control

High-speed digital computers, in
association with highly complex
instrumentation, monitor and/or
control various refinery process­
es; they , are used in testing and
research laboratories and for
management information. Use
minimizes costs and improves
product quality.

Affects operator’s duties primari­
ly, assuming earlier installation of
requires computer-related techni­

Installation in one-fourth of refin­
eries constituting more than twothirds of industry crude capacity.

Improved cracking

Improved riser-cracking tech­
niques use catalysts with more
tolerance to feedstocks of higher
metal content to provide greater
yields of desired products and
higher octane ratings. Improved
hydrocracking provides
feedstock flexibility.

Increased labor productivity; di­
rect effects are minimal.

Riser method constitutes approxi­
mately 40 percent of U.S. crack­
ing capacity. Hydrocracking ca­
pacity is equal to 16 percent of
the total. Diffusion is expected to
be relatively slow.

Desulfurization advances

High-activity catalysts and other
advances efficiently reduce sulfur
content. Hydrogen-based process­
es enable refineries to process
sour crude, to make low-sulfar
feedstocks tor modern </.<aiytic
reforming units, to produce resid­
uals and distillates to environmen­
tal specifications, and to meet
pollutant emission controls.

Additional processing increases
unit labor requirements for tech­
nicians and maintenance person­

Process units being built into new
refineries. Diffusion will depend
on environmental protection re­
quirements and type of crude
available. Hydroprocessing capacfty increased 30 percent between
1975 and 1978, and is expected to
increase another 5 percent by

Octane-improving processes

Catalytic reforming, alkylation,
and isomerization increase gaso­
line octane ratings without lead
additives. New bimetallic cata­
lysts are improving all reforming
methods. Continuous reforming
eliminates periodic shutdowns for
catalyst regeneration.

Direct labor effects depend on
refinery complexity. Small plants
may need additional operators
and maintenance workers. In all
cases, productivity would be ad­
versely affected.

By 1978, reforming accounted for
22 percent of crude capacity;
isomerization, 2 percent; alkyla­
tion, 5 percent. Low-lead require­
ments suggest increased impor­
tance of octane-improving proc­

Energy conservation methods

Increased use of heat exchangers,
furnace air preheaters, thermal
insulation, gas and hydraulic tur­
bines, waste-heat steam genera­
tion, process improvements.

Increases maintenance labor, par­
ticularly in older refineries; also
increases demand for engineering

By early 1976, energy use was cut
10 percent below 1972. Expecta­
tions are for an additional 15-percent cut by 1985.

Preventive maintenance technologies

Use of ultrasonic testing, X-ray
testing, infrared cameras, magnet­
ic particle testing, and corrosion
probes to determine equipment

Newer sophisticated preventive
maintenance equipment requires
highly trained personnel, but may
require fewer unit employee
hours as downtime is reduced.
Maintenance craft consolidation
also reduces unit labor require­

New testing methods are widely
used; use depends on complexity
and age of equipment.


lation, and so the labor implications of the computer
cannot be easily sorted out. In a refinery visited by
the BLS staff, the computer monitored information
from more than 1,000 electronic instruments, such as
chromatographs, mass spectrometers, and octane
analyzers, that are located at the process unit and
continuously measure product quality. Their import­
ance lies in the speed with which problems can be
corrected, and also in their tie-in to computer con­
trol. All U.S. refineries use analyzers, but the num­
ber and sophistication of the instruments vary with
the size and complexity of the plant.
The effect on employment is associated largely
with the degree of sophistication of the refinery’s
instrumentation. For example, fewer analyzer repair­
ers, operators, and lab technicians may be required
where on-line monitoring is possible.-1 In a modern
plant, one technician may take the place of three or
four technicians or operators in an older plant which
still maintains sample testing and manual recording.
On the other hand, jobs such as programmers and

trol is most common: data received from plantwide
on-stream sensors are monitored and the operator is
notified when machine changes are required. Howev­
er, closed-loop control is increasing in use in the
newest installations. The trend is toward use of minior microcomputers which, while linked to a central
control center, control separate functions. Required
adjustments in the production process are made au­
tomatically, thus eliminating some of the operator’s
Digital computer use is generally more common in
large complex plants. Approximately one-fourth of
American refineries use digital computers in various
applications,1 but these plants constitute more than
two-thirds of total U.S. capacity.2 With current
trends towards the construction of larger, more
complex plants, it is expected that practically all
future refineries will incorporate one or more pro­
cess control digital computer systems.
The use of very sophisticated instrumentation
generally precedes or accompanies computer instal­
1 International Petroleum Encyclopedia, 1977, pp. 443-44.
2 Ibid., pp. 316-20.

3 “ Process Computers—They Do Pay Off in Refineries,” Oil
and Gas Journal, Dec. 3, 1973, p. 62.

Operators checking level and flow of fluid at a petroleum refinery


Desulfurization advances

systems analysts increase with the installation of
computers. A BLS study4 shows, however, that the
number of some computer-related jobs in a plant
may decrease after the initial phases of installation
and programming are completed.
With the installation of computer process control,
changes are necessary in the operator's duties. One
example is clearly shown in a BLS survey of em­
ployment implications of computer process control.5
The duties of an operator of a fluid catalytic crack­
ing unit before computer control were to manually
adjust automatic analog controllers at the control
console and to monitor automatic data logging equip­
ment. After installation, the computer controls and
monitors a large part of the process and automatical­
ly logs the data, although the operator still performs
manual control. In case of emergency, the operator
can take control of any part or all of the process.

Hydroprocessing to reduce impurities, particularly
sulfur, will become increasingly important as de­
mand increases for low-sulfur residual and distillate
fuels. In addition, stricter environmental protection
regulations and greater utilization of high-sulfur
crudes due to dwindling supplies of sweet crudes
will lead to strong growth in desulfurization capaci­
tyDesulfurization is an important factor in better
enabling refineries to process sour crudes. For this
purpose, sulfur removal may follow initial crude dis­
tillation. Desulfurization is also performed down­
stream to meet the stringent requirements of cataly­
tic reformers and to control pollutant emissions from
the catalytic cracking process. Residual and heavy
gas-oil desulfurization, the smallest but most rapidly
growing segment of hydroprocessing capacity in the
United States, is performed as the last step in the
production of those fuels. New refineries are being
designed to produce low-sulfur products from highsulfur crudes, and existing plants are revamping
their process units when changes become necessary.
Various hydrogen-based processes (hydrodesul­
furization, hydrorefining, hydrotreating) are used for
sulfur removal. All are based on chemical reactions
between oil and hydrogen in the presence of a cata­
lyst. Advances involving separate demetallization
processes and new high activity catalysts are reduc­
ing problems related to metals accumulation and
need for frequent catalyst regeneration. However,
the costs are still quite high. With some desulfuriza­
tion processes, off-site regeneration of catalysts by
specialized companies is increasing as an economical
solution to catalyst-related problems.
The trend is clearly toward an increasing capabili­
ty of refineries to process sour crudes. Total hydro­
processing capacity increased 30 percent between
1975 and the start of 1978 and is expected to in­
crease an additional 5 percent by 1980. Residual and
heavy gas oil desulfurization capacity more than tri­
pled from 1975 to 1978.6
Since additional processing is required for desul­
furization and demetallization, unit labor require­
ments for operations and maintenance personnel
may increase. These increases may be temporary,
however, as the processes become integrated into
the overall operation of the refinery.

Improved cracking

Fluid catalytic cracking is a refining process that
converts heavier oils into lighter, more valuable
products such as gasoline, primarily by chemical
reaction in the presence of a catalyst. The technique
of riser cracking was developed concurrently with a
new generation of highly active catalysts in the early
1960’s. Considered more efficient than older tech­
niques, this method presently is in use in over 40
percent of U.S. cracking capacity.
Hydrocracking, an older, but greatly improved
method of cracking, has several advantages over the
conventional “ cat-cracker.” These include the capa­
bility to meet environmental specifications of low
sulfur and nitrogen more efficiently and flexibility to
handle variations in crude stock and in products de­
sired. Currently, however, hydrocracking accounts
for only about 16 percent of cracking capacity, and
the diffusion is expected to be slow, due primarily to
the very high investment and energy usage required
for this process.
For both types of cracking, continually improved
catalysts and regeneration methods enable more
efficient processing of oils with high contents of sul­
fur and metals. To meet new product specifications
and increased use of high-sulfur crudes, refineries
with older cat-crackers may need to change over to
the more efficient processing methods.
In general, the effect on labor utilization of im­
proved cracking procedures in place of older crack­
ing methods is minimal.

Octane improvement

Catalytic reforming, a process which improves the
octane rating of gasoline or fuels, is particularly
important today in view of the Federal Govern-

4 Computer Manpower Outlook, Bulletin 1826 (Bureau of Labor
Statistics, 1974), pp. 36-37.
5 Outlook for Computer Process Control: Manpower Implica­
tions in Process Industries, Bulletin 1658 (Bureau of Labor Statis­
tics, 1970), p.29.

“ Federals Shape U.S. Refining Industry,” Oil and Gas Jour­
nal, Mar. 20, 1978, pp. 63 -6 6 .


ment’s requirements for lower lead and lead-free
gasoline. To increase yields of high-octane gasoline
without lead, low-sulfur feedstock is necessary. The
desulfurization of feedstock, discussed in the pre­
vious section, is therefore necessary.
New bimetallic catalysts are making all reforming
processes more efficient, increasing yields and oc­
tane ratings over those possible with conventional
catalysts. In addition, the process of continuous re­
forming eliminates periodic shutdowns because, un­
like other reforming methods, it continuously rege­
nerates the catalyst.
To meet the low-lead requirements, refiners in­
creased their reforming capacity by roughly 19 per­
cent between 1972 and 1978. In that period, the use
of bimetallic catalysts more than doubled, to over 60
percent of total reforming capacity. At the start of
1978, continuous reforming accounted for 4 percent
of total catalytic reforming capacity compared with
about 69 percent for semi-regenerative reforming,
and almost 27 percent for the older process of cyclic
In addition to reforming, the processes of alkyla­
tion and isomerization provide increased octane rat­
ings in gasoline. Developed in the early 1940’s to
produce aviation fuels, these processes are not wide­
ly used now, representing only about 5 percent and 2
percent, respectively, of crude capacity (compared
to 22 percent for reforming). However, they will
become increasingly important as leaded gasoline is
phased out.
Although the phasedown of leaded gasoline may
not be as severe for the large refineries capable of
wide process adjustment, it will be particularly diffi­
cult for smaller, older refineries, geared primarily to
producing leaded gasoline. Some of these smaller
refineries may have problems associated with capital
acquisition or procurement and construction of the
needed equipment. In addition, more operators may
be needed in refineries lacking process control sys­
tems. More maintenance labor may also be required
by the small plant. In all cases, however, productivi­
ty would be adversely affected by the additional
processes required to increase octane ratings.

are now being improved. Minor process adjust­
ments, automatic instrumentation, increased mainte­
nance, and intensified surveillance of operations are
also important in reducing refinery energy consump­
The labor implications of energy conservation in
the refinery are considerable. Some companies have
set up energy systems departments whose managers
closely control energy use. In addition to managerial
and engineering skills, more employee hours of
skilled craft and maintenance workers may be re­
quired for efficient energy utilization, particularly in
the older refineries.

Preventive maintenance

Special emphasis is being placed on preventive
maintenance, particularly the use of electronic in­
struments to locate defects in and measure the deter­
ioration of equipment before problems arise.
Through the use of ultrasonics, X-rays, and electri­
cal corrosion probes, wear and corrosion in pipes
and vessels can be measured on- or off-stream, sonic
testers can detect high-frequency sounds generated
by gas leaks from valves and fittings, and magnetic
particle tests and infrared cameras can also pinpoint
structural defects in some equipment.
Preventive maintenance reduces downtime and
maintenance costs, but the effect on labor is difficult
to assess. Maintenance labor requirements vary with
the complexity and age of the refinery, the sulfur in
the crude, and the extent to which maintenance is
subcontracted. Newer refineries may have less
maintenance because modern materials, e.g., corro­
sion resistant, are more fully utilized. In general,
however, important changes are occurring which are
reducing unit labor requirements for maintenance
personnel. These are discussed in the section on
employment and occupational trends.

Production and Productivity Outlook

The steady growth in petroleum refining output
since World War II was interrupted only by small
declines in 1949 and 1958 and again in 1974 and
1975. Overall, from 1960 to 1976, output rose at an
average rate of 2.9 percent annually.9 (See chart 6.)
The growth rate, however, was considerably more
rapid in the strong economy of 1960-66 (3.2 per­
cent) than in the 1966—76 period (2.4 percent). The
latter period included the embargo and the 1974—75

Energy conservation

Because of the high costs of new refining technol­
ogies, particular emphasis is bei/ig placed on reduc­
ing costs through energy conservation—the more
efficient utilization and generation of fuel and pow­
er. 8 Current technologies such as heat exchangers,
furnace air preheaters, gas and hydraulic turbines,
waste-heat steam generation, and thermal insulation

Productivity Indexes for Selected Industries, 1977 Edition,
Bulletin 1983 (Bureau of Labor Statistics, 1977). Output measure
based on Bureau of Mines data.

8 Oil and Gas Journal, Mar. 29, 1976, p. 74.


' ' f ■■ ■

Chart 6

Output per employee hour and related data,
petroleum refining, 1960-771
Index, 1967 = 100

1 Data for 1 9 7 7 are preliminary.
Source: Bureau of Labor Statistics.


production cutback associated with the economic
recession and energy conservation. But in 1976 and
1977, output jumped to peak levels, recording the
most rapid annual rates of growth since 1955.
There is no general agreement on the level of
domestic demand for refinery products in 1985J0
Many observers expect gasoline demand to peak out
in the next few years, while demand for distillate
and residual fuels is expected to increase as utility
and industrial users substitute fuel oil for natural

complicated by government regulations which re­
quire low-sulfur residuals, sometimes necessitating
changes in technology. Nevertheless economic in­
centives and the outlook for rising demand have re­
sulted in more domestic processing of residual fuel—
from 30 percent of domestic demand in 1973 to
about 56 percent in 1977. Imports of residual fuel hit
a low of 1.2 million barrels a day in 1975 and have
not increased greatly since then, in spite of a sizable
increase in demand.
The outlook for imports of refined products is not
clear.12 Opinions differ as to domestic capacity
growth and shifts in demand, aside from the availa­
bility of crude supplies or, in the longer, run, the
possibility that oil-producing countries will move
into refining.


Until the early 1960’s, the United States was selfsufficient in refined petroleum. Even in the first half
of the 1960’s, domestic refining capacity could sup­
ply more than nine-tenths of domestic demand;
product imports consisted almost entirely of residual
fuel. But in the 1965 —73 period, demand for petro­
leum products expanded considerably more rapidly
than capacity, and by January 1973 operable capaci­
ty could supply less than 80 percent of the demand.
Thus, the gap between domestic demand and supply
had been growing for years when the crude oil em­
bargo and price increases intensified the problem.
Product imports rose to peak levels in 1973, averag­
ing 3 million barrels daily.11 Residual fuel was still
the major refined product imported but other imports
had also risen substantially.
However, the demand/supply situation reversed
itself following the crude oil embargo when concern
rose sharply about our self-sufficiency. Capacity in­
creased as plants were expanded and new plants
were built, while demand declined after three de­
cades of continuous growth. Consequently, the gap
between refining capacity and demand greatly nar­
rowed, and our dependence on imported refined
products in 1975 dropped back to roughly that of the
mid-1960’s. Although demand has been rising, capac­
ity increases continue to hold down the gap filled by
product imports. In 1976, imports of refined prod­
ucts averaged 2 million barrels daily, 11 1/2 percent
of domestic demand, the lowest proportion since
But crude distillation capacity alone is not a mea­
sure of the industry’s capability to provide for
domestic demand, even assuming available crude
supplies. Residual fuel has been and continues to be
our major import because, as discussed earlier,
domestic refineries have not been interested in or
geared to processing residuals. The problem is now10


Productivity in refining rose sharply in the postWorld War II period. From 1960 to 1977, output per
employee hour in the refining industry increased at
an average rate of 4.3 percent annually, compared
with 2.6 percent in all manufacturing. >3
Productivity growth was considerably more rapid
and steadier, however, from 1960 to 1967 (7.1 per­
cent) than from 1967 to 1977 (3.0 percent). (See
chart 6.)
In the last few years of the 1960’s, productivity
growth leveled off at a relatively low rate. In 1972
and 1973, productivity rose very sharply; this was
followed by a sizable decline in 1974. While the re­
covery since then has been moderate, productivity in
1977 was back to the high level of 1973. These errat­
ic productivity movements were associated with the
embargo and the events that followed. There were
erratic changes in refining output, discussed above,
such as the unusually steep increases in output in
1973, 1976 and 1977, and the decline in 1974, the
first since 1958. There were also unusual changes in
employee hours, as shown on chart 6.
A roughly similar pattern of change in the industry
since 1960 is evident in data on payroll per unit of
value added, i.e., labor as a percent of the value of
shipments less materials and other costs. As shown
in table 5, payroll per unit of value added fell at an
average annual rate of 3.2 percent from 1960 to
1975, compared with 1.1 percent for all manufactur­
ing, indicating a relatively greater increase in effi­
ciency. The stronger industry position in the first
half of the period 1960—66 is evident in the sharp
decline in payroll/value added of almost 6 1/2 per­
cent annually. In contrast, the ratio showed only a
minor change of about 1 percent in the 1966-75 per-

10See Projections of Energy Supply and Demand and Their Im­
pacts: Annual Report to Congress. Vol. II, 1977(U.S. Department
of Energy, Energy Information Administration, 1977), ch. 6, pp.

12Projections o f Energy Supply and Demand, p. 137.
13 Productivity Indexes, 1977 Edition, pp. 75—76.

11 Bureau of Mines data.


Table 5.

Table 6. Value added and employment in petroleum refin­
ing: Ratios of “highest quartile” to “lowest quartile” plants
and to average plant, 1967

Indicators of change in petroleum refining, 1960-75
Average annual percent ch an g e1


M easure

Payroll per unit of value added .
Capital expen d itu res per p roduc­
tion worker ....................................





Ratio of highest
quartile to lowest

Value added per production
worker h o u r ..............................



Average em ploym ent per establis h m e n t.....................................




1 Linear least sq u a res tren d s m ethod.
SOURCE: Bureau of th e C ensus.

Ratio of highest
quartile to aver­

NOTE: E stablishm ents w ere ranked by the ratio of value added per
production w orker hour.

iod, having registered sizable increases for several

SOURCE: Based on unpublished C ensus Bureau data prepared for
the National C enter for Productivity and Quality of Working Life.

Productivity differences

Data on productivity differences among establish­
ments in an industry with a high degree of speciali­
zation may provide some insight into the factors
associated with high productivity performance within
the industry. In a study of 1967 Census data,14 pe­
troleum refineries were ranked by value added per
production worker hour to provide a rough indica­
tion of the range of productivity differences. In this
industry, average value added per production worker
hour in the highest quartile was almost 11 times
greater than in the lowest quartile.
Wide productivity differences in the refining indus­
try may reflect differences in size, management,
complexity (type of processing), labor, capital out­
lays, etc., but the limited data preclude general con­
clusions. Nevertheless, the 1967 data suggest that
size may be important (table 6). Establishments in
the highest quartile had an average employment
almost four times greater than those in the lowest
quartile. This is verified by studies15 which show
that labor productivity increases with capacity and
with employment, up to a point. Small plants must
maintain a minimum staff of operators and mainte­
nance and technical personnel to run the refinery; as
capacity increases, the number of production work­
ers needed per thousand barrels of output declines
sharply. But at some point, the advantages of size
may be offset by duplication of process units.

nual outlays declined or remained relatively con­
stant; from 1965 to 197I they rose extremely rapidly;
in 1972 and I973 they declined; and in 1974 and
1975 they jumped very sharply. The average
outlay in the I960—75 period was $917 million.
These data, however, reflect costs unadjusted for
changes in prices. Adjusting the dollar figures by the
Nelson index of refinery construction costs16 reveals
that real investment barely doubled from 1960 to
1975. From 1966 to 1975, real investment rose one
and one-half times compared with three and one-half
times for dollar outlays. However, increases in re­
finery costs were offset by the greater efficiency of
plant and equipment. When adjusted for productivity
changes by Nelson’s “ true cost” index, adjusted
real capital outlays rose two and one-half times in
those 9 years, and almost three and one-half times
from 1960.
Petroleum refining is highly and increasingly capi­
tal intensive. Labor costs were less than 13 percent
of the value of the product in 1975 (compared with
48 percent in all manufacturing), having dropped
sharply and steadily from 34 percent in 1960. As
capital expenditures rose sharply and the number of
production workers declined from 1960 to 1975, capi­
tal outlays per production worker rose almost seven­
fold. After adjustment for price and productivity in­
crease, real outlays per production worker rose al­
most fivefold.
These large capital expenditures resulted in addi­
tions to daily capacity of 3.2 million barrels, an in­
crease of 24 percent in the 5 years from January
1972 to January 1977. From January 1974 to January
1977, 28 “ grass roots” plants were built, accounting
for slightly over 20 percent of the total increase in
operating capacity in those years.17 However, almost

Capital expenditures

Capital expenditures for refining plants increased
11.2 percent annually from I960 to 1975 to a total of
$2.2 billion—more than four and one-half times the
outlay in 1960. The increase, however, was not even
over those years. In the first half of the 1960’s, an14 Based on unpublished data prepared by the Bureau of the
Census for the National Center for Productivity and Quality of
Working Life.
15 Studies by W.L. Nelson published in the Oil and Gas Jour­
nal. See “ Maintenance Material and Labor” , Jan. 13, 1975, pp.

16 Nelson Index published in the Oil and Gas Journal. See issue
of Jan. 26, 1976.
17 Trends in Refinery Capacity and Utilization (Federal Energy
Administration),!June 1976, pp. 4 and 7, and June 1977, p. 14.


all of these were very small, of very simple design
and limited flexibility. With incentives available to
small refineries, 19 of these new plants had less than
a 10,000-barrel daily capacity. Only one had a capac­
ity of more than 40,000 barrels.
There is no general agreement on the outlook for
capital expenditures for expansion. In addition to
judgments on the need for additional capacity, capi­
tal outlays for expansion will be influenced by the
increasingly heavy costs of new plant and equip­
ment. In general, however, there is agreement on the
necessity to modify existing facilities to cope with
changing demand and supply conditions. Even in
this, there is a wide range of views relating to the
future course of gasoline demand and likely develop­
ments in coal gasification and liquefaction. In addi­
tion, future government environmental and energy
policies will atTect capital outlay decisions. Of great
concern is the increase in environmental protection
costs, which averaged 12 percent of the total petro­
leum industry’s outlay in 1975;'8 data for the refining
sector alone are not available.

Employment and Occupational Trends

About 160,300 people were employed in the refin­
ing industry in 1977, the largest number since 1962
(chart 7). A decline starting in the late 1940’s contin­
ued unabated through the mid-1960’s, reflecting the
very sharp increase in productivity through most of
the period. After 1973, however, employment turned
up again.
In the first half of the 1960’s, the sizable employ­
ment decline was associated with a sharp reduction
in the number of refineries and a productivity growth
rate which was more than double the rate of growth
of output. From the mid-1960’s to 1973, employment
was relatively stable, although it dipped to a low
point of 145,000 in 1969. After 1973, however, sever­
al years of rising employment brought the level up to
that of the early 1960’s. This change in the direction
of employment reflected, in addition to technology
changes which required more unit labor, an increase
in the number of very small refineries. Overall, from
1960 to 1977, a relatively moderate annual average
employment decline of 0.3 percent was registered.
Refinery employment to 1985 a s projected to re­
sume its decline. Based on the economic assump­
tions stated in the introduction, the BLS projects a
decline to 137,000 employees in 1985, or a drop of
1.9 percent annually from 1977 to 1985.
These data reflect the technological, structural,
and skill changes which have affected employment in18

the industry. A modern refinery today with an input
of 100,000 barrels per day employs about 300—350
workers on three shifts. An older refinery with that
capacity which has been modernized employs about
700 workers; that same plant would have employed
almost 1,000 persons in the 1950’s.

As discussed earlier, technological and structural
changes are altering traditional concepts of job con­
tent and duties. More importantly, duties are being
consolidated, as in the case of maintenance crafts, or
partially removed from the refinery, as in the case of
contract maintenance.
Maintenance craft consolidation is an important
labor development of the last decade which increas­
es the flexibility of the work force while it reduces
the number of workers required per processing unit.
Under most maintenance consolidation plans, skilled
workers who have attained journey worker status in
one craft are trained to handle other crafts (for ex­
ample, a boilermaker who learns pipefitting), thus
eliminating the need for several workers, each with a
specific craft duty. Such consolidation is becoming
more widespread. Of 104 refineries studied by BLS
in 1976, about one-fourth reported craft consolida­
tion plans, double the number reported in 1965.19 In
most plants, consolidation was limited to two desig­
nated crafts but in many plants consolidation incor­
porated all maintenance crafts. These skill combina­
tions fall into a single job classification, “ general
mechanic.” A further development of this practice is
the combination of operative and maintenance skills
by one worker, who may be known as a “ running
operator.” Two running operators can handle a pro­
cessing unit of 100,000-barrel capacity, compared to
three operators and a maintenance worker required
in the average refinery of similar capacity.
The trend to maintenance craft consolidation may
in time contribute most importantly to revising job
content and standard occupational patterns. By elim­
inating the lines of craft duties, craft consolidation
practices generally establish new single job classifi­
cations with new duties and training.
Contract maintenance is performed by workers
supplied by outside firms on a contract basis, and
permits a refinery to have a relatively small yearround maintenance staff. Although contract workers
are generally used for special peak work periods
such as during shutdown, they may also be em­
ployed year round on regular maintenance. Prior to
the practice of contract maintenance, a refinery
Industry Wage Survey; Petroleum Refining, April 1976, Bul­
letin 1948 (Bureau of Labor Statistics, 1977). See also BLS Bulle­
tin 1741, p. 2, for April 1971 data.

18 Data from the Bureau of the Census.


Chart 7

Employment in petroleum refining, 1960-77,
and projection for 1977-85



Employees (thousands)



All employees
Average annual percent change


All employees
1 9 6 0 -7 7 ............................ - 0 . 3
1 9 6 0 -6 7 .....................- 2 . 6
1 9 6 7 - 7 7 ......................... 0 .7

:‘ ■


1 9 7 7 -8 5 (projection). . . — 1.9
Production workers
1 9 6 0 -7 7 ............................ —0 .4
1 9 6 0 -6 7 .....................- 3 . 4
1 9 6 7 - 7 7 ..........................1.1


:; j

'i** VI







1 Least squares trend method for historical data; compound interest method for projection.
Source: Bureau of Labor Statistics.


might have had a ratio of 2 maintenance workers to
1 operator. Now, excluding contract workers, the
ratio of maintenance workers to operators in that
refinery may be 1 to 2.
The practice of contracting out is reducing employee
hour requirements in the refinery, but data are not
available on its extent. The importance of this practice
is evident in the fact that in this industry 9 of 13 labormanagement contracts (covering 1,000 workers or
more) studied by the BLS in 1975 contained provisions
limiting subcontracting.20
Job and skill changes. Job content and skill re­
quirements are being substantially changed by the
sophisticated instrumentation, particularly for
maintenance and lab technicians. In many eases,
decisionmaking is being transferred from the em­
ployee to the machine. In the older plants, techni­
cians may take readings of various instruments ev­
ery 4 hours and may record the information manual­
ly. In modern refineries, computer consoles in each
process unit record the data from on-line instru­
ments and feed the data into a central computer sys­
tem. As many as a thousand signals can be received
by the computer and checked against limits for prob­
lem areas. In blending, for example, several prod­
ucts must go into the finished gasoline in proper
proportions. To do this, the operator merely sets the
controls for the specified percentages, etc. Samples
from the stream are then automatically analyzed;
changes can be made by the operator. The computer
will continuously monitor the process and report
information on demand.
Manual skills, already at minimum levels in the
refinery, continue to decline. Even the truckdriver
who loads the gasoline for delivery uses an automat­
ed system. The driver removes the cover of the
tank, puts a punchcard into a slot, and pushes a but­
ton. The required quantity of the correct product
fills the truck, after which the flow shuts off auto­
matically. When this job is not automated, loaders
and pumpers are employed to do the work.
Due to the many changes occurring in the indus­
try, the occupational distribution in 1985 is expected
to be significantly different from (he 1970 pattern. In
the BLS projections of occupational employment,
professional and technical workers, more than onefifth of all refinery workers, are expected to decline
moderately from 1970 to 1985 but to retain about the
same share of total employment (chart 8). This is in
contrast to the pattern of the 1960’s, when profes­
sional and technical workers rose very sharply both
in number of jobs and as a proportion of total em-

ployment. The major occupations in this group are
chemical engineers, chemical technicians, and com­
puter personnel. Other occupations are chemists and
Operators constituted almost one-fourth of all
refinery workers in 1970, approximately the same
proportion of total employment as professional and
technical workers. Chief operators, numerically one
of the largest groups of workers, are the highest paid
production workers in the refinery. BLS projections
indicate a decline of about 8 percent in the number
of operators from 1970 to 1985 but an increase in
their share of the total to over 25 percent. Craft and
kindred workers are expected to decrease in number
by about 7 percent from 1970 to 1985; however,
their share of the total may increase slightly. This
group also constitutes more than one-fifth of all
workers and includes general mechanics, instrument
repairers, machinists, electricians, pipefitters, and
A recent BLS survey2i of occupations in this in­
dustry reaffirms the very large proportion of skilled
workers. Skilled maintenance workers constituted
one-fifth, and chief and assistant operators onefourth, of all production workers in 1976.
Laborers constituted a small proportion of em­
ployment—only 3 percent in 1970—and are expected
to decline further by 1985 as manual handling of
materials becomes obsolete.
Adjustment of workers to technological change

Programs to protect employees from the adverse
effects of changes in machinery and methods may be
incorporated into contracts or they may be informal
arrangements between labor and management. In
general, such programs are more prevalent and more
detailed in industries and companies which negotiate
formal labor-management agreements. Contract
provisions to assist workers in their adjustment to
technological and associated changes may cover new
wage rates, new job assignments, retraining, transfer
rights, layoff procedures, and advance notice of
changes planned by management, including machine
changes or plant closings. They may also include
various types of income maintenance programs such
as supplementary unemployment benefits or sever­
ance pay.
In the refining industry, there is a high degree of
unionization; approximately 90 percent of the em­
ployees are covered by collective bargaining agree­
ments. Contracts usually run 2 years, and negotia­
tions are conducted on a company basis, with the
first settlement establishing the pattern for later bar­
gaining. The Oil, Chemical and Atomic Workers

Characteristics o f Major Collective. Bargaining
July I, 1975, Bulletin 1957 (Bureau of Labor Statistics, 1977), p.

21 Petroleum Refining, April 1976, BLS Bulletin 1948, table I.






Chart 8
" •

Projected changes in employment in petroleum
refining, by occupational group, 1970-851
Percent of
Occupational group
in 1970

technical workers

Wk i


Percent change


-3 0


-2 0


Managers, officials,
and proprietors


Sales workers


Clerical workers


Craft workers




Service workers




1 Based on the latest occupational data for 1985 adjusted for revisions of the 1985
___ ._____ * __

I ' ’-;..:
Source: Bureau of Labor Statistics.


a study and analysis of the job involved . . . , any
dispute arising in regard to the wage rate of such job
shall be the subject of negotiations and shall not be
subject to the grievance procedure.”
Advance notice to the workers of plans for layoff
or plant shutdown or relocation was required in 10
of the 13 contracts studied by the BLS, a considera­
bly larger proportion of contracts and of workers
than in all manufacturing in the case of plant shut­
down or relocation and somewhat larger in the case
of layoff. However, in only one contract was there
specific mention of advance notice of plans for tech­
nological change.

Union (OCAW) represents about two-thirds of the
workers covered; the other third are covered by
several independent unions—the Teamsters, the
Operating Engineers, and an affiliate of the Seafar­
ers’ Union.
As mentioned earlier, 13 major agreements cover­
ing 1,000 workers or more were studied by the BLS
in 1975 .22 in these contracts, covering 25,000 work­
ers, employee seniority was generally the determi­
nant in the order of layoff and recall, assuming equal
ability. Interplant transfers and preferential hiring
opportunities for displaced workers were mentioned
in 8 of the 13 agreements, covering 13,200 workers.
Four agreements provided relocation allowances for
transferred workers.
Training for new skills and changing job content is
a continuous process in most refineries. Of the 13
agreements studied by the BLS, 4 had apprentice­
ship provisions, and 7 provided for on-the-job train­
ing. In refineries visited by the BLS staff, training is
required for 4 years or more for a senior technician.
In one plant, the new worker, generally a high
school graduate, receives 4 months of classroom
training covering refinery equipment and the math
and chemistry needed for the job. The trainee is
then assigned to a shift but continues with on-thejob training, spending about 5 months on each of
four assignments. After 2 years, the trainees are
qualified as refinery technicians. In some refineries,
the ladder of promotion may be from technician 1 to
technician IV, with perhaps 1 year or more between
Although seldom cited specifically, technological
change is often the major factor in job reclassifica­
tion provisions. One contract stated, “ If during the
term of this agreement, a significant change in job
content has been effected by the Employer to the
extent that a wage rate is considered to have become
inappropriate . . . , the union may request in writing

Changes which can result in a reduction in force,
possibly from technological change, were covered in
one contract as follows: “ The company will give the
union 14 days notice when job classifications are to
be eliminated or when changes are to be made . . .
in a classification.” Severance pay provisions were
more common in petroleum refining contracts than in
most other manufacturing industries. All refinery
contracts had provisions for grievance and arbitra­
tion, procedures found in almost all major collective
bargaining agreements in manufacturing.
\ •- *■■■

'• 1

' -vV •5£ v V';:

Cooperation between workers and management
was reaffirmed in the “ Memorandum of Agreement”
of one of the major contracts which concerned the
“ job security of employees who may be affected by
technological improvements, the construction of new
units or the establishment of new processes.” This
agreement stated that the union “ will continue to
cooperate in adopting more efficient work practices
. . .” and the company “ will manage its operations
and its work force in such a way that layoff . . . will
not occur.” When the company decides layoffs are
unavoidable, 60-day written notice is required. If,
after discussion, labor and management are unable
to resolve the problems,” . . . then either party may
at any time terminate the basic agreement upon 60
days written notice.”

22 Major Agreements, BLS Bulletin 1957, pp. 86,87,89.


“ Annual Refining Survey,” Oil and Gas Journal, March 29, 1976,
p. 124 ff.

Nelson, W. L. “ Maintenance Material and Labor,” Oil and Gas
Journal, January 13, 1975, pp. 57—59.

Farrar, Gerald L. “ Computer Control in the Industry,” Oil and
Gas Journal, November 5, 1973, pp. 51—55.

Oil and Gas Journal, weekly.
The Chase Manhattan Bank. The Petroleum Situation, weekly.
New York.

Federal Energy Administration. Project Independence. November
Federal Energy Administration. Trends in Refinery Capacity and
Utilization. June 1976 and June 1977.

U.S. Department of Energy, Energy Information Administration.
Projections o f Energy Supply and Demand and Their Impacts:
Annual Report to Congress, Vol. II, 1977.

National Petroleum Council. Factors Affecting U.S. Petroleum
Refining, Impact of N ew Technology. Washington D.C., Sep­
tember 1973, 144 pages.

U.S. Department of the Interior, Bureau of Mines. Mineral Indus­
try Surveys, monthly and annual.


Chapter 4. Petroleum Pipeline

line is expected for craft workers, operatives, serv­
ice workers, and laborers, while employment gains
are anticipated for professional and technical, mana­
gerial, sales, and clerical workers.

Refinements in the application of existing technol­
ogies rather than new inventions are expected to
continue to be the primary source of productivity
gains in the petroleum pipeline transportation indus­
try.1 Expanded use of improved computer applica­
tions are anticipated for pipeline delivery scheduling,
field process control, and administrative business
and auditing work. Occupations affected by ad­
vanced computer applications include process control
operators located at field stations, whose responsibil­
ities are being transferred, in part, to headquarters
control, and schedulers, gaugers, and accounting
clerks whose job duties also are being modified as
computers increasingly perform more complex tasks.
Additional improvements in plant and equipment,
such as wider diameter pipe of higher tensile
strength and pumping stations of standardized de­
sign, will probably permit faster throughput of a
larger volume of product and require fewer techni­
cians to maintain the pipeline.
The diffusion of technological refinements, com­
bined with expected increased demand for petroleum
products and more capital stock per worker, should
promote productivity growth by making possible
both a larger output and increased productivity of
production workers. However, the higher level of
capability of the physical plant requires a wider
technical background for such workers as schedu­
lers, dispatchers, and technicians.
As the demand for crude oil and other petroleum
products has grown, pipelines have# increased their
share of the petroleum transportation payload by
expanding their trunkline capacity through the addi­
tion of mileage and of pumping stations. The outlook
for petroleum pipeline transportation starting in the
mid-1980’s depends mainly on the volume of off­
shore and Alaskan production, the level of imports,
construction of deepwater ports, and the availability
of refinery capacity in the lower 48 States.
Employment, after declining steadily from 1960
through 1973, rose slightly in 1974 and the two fol­
lowing years to a total of 16,700 and then dropped to
16,600 in 1977. Production worker employment fol­
lowed a similar pattern through 1974, but declined
starting in 1975 to 12,100 in 1977. A small increase in
total employment is projected through 1985. A dec­

Technology in the 1970’s
Improved computerized scheduling and linking of
on-line and central control computers are helping
move a larger volume of crude oil and petroleum
products more efficiently through pipelines with less
workload for schedulers, accounting clerks, and dis­
patchers. Productivity for complex pipeline schedul­
ing is being increased through better computer pro­
grams for data base updating, original and revised
scheduling, and shipment report preparation. Further
computerization of nonoperating functions such as
engineering calculations for pipeline design and ac­
counting tasks will probably effect additional labor
savings. For many pipelines, monitoring and regula­
tory tasks, including the operation of unmanned
pumping stations, are performed by headquarters
dispatchers using solid state electronic telecommuni­
cations equipment and computers. When the central
control computer at headquarters does not receive
operating data, workers using minicomputers at on­
line stations take over control on recently construct­
ed or renovated lines. Efficiencies such as inter­
changeability of parts, more economical space utili­
zation, and uniform work plans which reduce the
workload of maintenance workers are being introd­
uced in new plants. Advances are also being made in
plant and equipment design and installation methods,
which further reduce maintenance workload. (See
table 7 for a brief overview of the major technologi­
cal changes in petroleum pipeline transportation,
their labor implications, and expected diffusion.)
'This study covers SIC 4612, 46I3, establishments primarily
engaged in the pipeline transportation of crude petroleum and of
refined products of petroleum such as gasoline and fuel oil. Data
on employment and occupations are for SIC 46, pipeline transpor­
tation (except natural gas), which approximates SIC 46I2 and
46I3, since only a limited number of employees are associated
with slurry pipeline operations and other activities included in the
broader SIC 46 definition. A typical pipeline is owned by more
than one oil company and in the past has operated as a public car­
rier under Interstate Commerce Commission (ICC) regulations.
Starting Oct. I, I977, the Federal Energy Regulatory Commis­
sion (FERC), Department of Energy, became the interstate oil
pipeline regulatory agency.


Computer scheduling

ery volume moving in and out of the line, and batch
arrival and delivery time are updated by the central
computer, and instructions are communicated to
remote supervisory control equipment on the line for
the operation of pumping units, valves, and setpoint
controllers. Also, upsets and abnormal operating
conditions are sensed quickly at the headquarters
location and corrected.
A monitoring program keeps the on-line system
under continuous surveillance by scanning all read­
ings and checking valve positions and unit running
status. In addition, the computer checks the validity
of the readings by analyzing their deviations, ranges,
and rate of change. Data are transferred to a central­
ly located computer control panel whose operator
(dispatcher) controls unmanned pumping stations.
Before automatic devices were installed to measure
the quantity of oil gathered for shipment, pipeline
employees took readings of producers’ tanks regular­
ly and opened and closed pumping station valves
manually. With automatic metering of transfers from
the fields to refineries and connecting pipelines, la­
bor requirements for reading gauges are reduced.
Generally, as scheduling and control functions are
increasingly computerized, relatively fewer techni­
cians are needed at the central control location but
their required skill level is higher. Also, as more
complex tasks are transferred to computer control,
the demands on data processing support services are
increased. Programmers and analysts are needed not
only to prepare the scientific research and develop­
ment work of engineers and pipeline designers for
computer processing but also to introduce the tech­
nological innovations developed.

The efficient and safe receiving, handling, and de­
livery of a variety of petroleum products owned by
different shippers require the collection of a mass of
information and its coordination into a pipeline de­
livery schedule. The schedule must be precise or
output and productivity of the pipeline will be af­
fected adversely. Computer scheduling had been in­
troduced by about 10 percent of the pipelines in 1971
and since has spread to many of the larger compa­
nies. A method superior to manual scheduling has
been developed whereby the computer tabulates a
60-day advance schedule and incorporates changes
anticipated more than 5 days in the future. The pro­
cess consists of assembling a set of pumping instruc­
tions for the dispatcher and a guide for the shipper’s
shipping and delivery departments indicating when
to supply petroleum products for entry into the pipe­
line and when to anticipate delivery at various ter­
minals. Three computer subsystems are necessary to
operate the scheduling program—a data base, a fore­
cast schedule, and a report generator. Once the
computer data base necessary for scheduling has
been set up, the workload of computer specialists,
schedulers, and clerical assistants is reduced.
One company reports that, despite a doubling of
petroleum transported through the pipeline, an ad­
vance from a first- to a third-generation computer
required the addition of only one scheduler and one
clerk to a staff of three schedulers, a coordinator,
and a supervisor—a substantial gain in petroleum
throughput per employee. A single scheduling task
previously requiring 3 days is now completed in 6
Other nonoperating functions performed in cen­
tral offices and generally computerized by pipeline
companies involve administrative and business work.
Business-related data are frequently received direct­
ly from stations in the field; consequently, some
tasks of accounting clerks are eliminated. The in­
creased workload handled by computers may result
in more jobs for machine servicers and computer

Plant and equipment

Improvements in physical plant, including pipe,
pumps, communications systems, and equipment
housing, combined with better installation methods,
make possible productivity gains by permitting great­
er throughput. They also lead to improved safety,
reduced maintenance, and better field control of the
movement of petroluem products through the pipe­
line if central headquarters loses communication.
Planning these improvements and putting them into
effect require more work by engineers.

Centralized computer process control

By linking on-line computers at pipeline receiving
and booster stations and delivery facilities to a cen­
tral computer, processes are being controlled from
the headquarters location of an increasing number of
larger pipeline companies. The data received by the
central computer from on-line readings of tempera­
tures, pressures, gravity, and flow rates provide a
base for the centralized performance of specific
tasks—whether in monitoring the total operation or in
storing information. Calculations required to keep
track of tankage and line inventory, receipt and deliv­

Pipe size. The size of mainline pipe has risen
steadily over the years, from the 36-inch diameter
pipe used by one company in 1962 to the 48-inch
pipe used for the Alaskan pipeline. Since line capaci­
ty is determined by the diameter of the pipe raised
to the 2.65 power, larger diameters result in signifi­
cant economies of scale with little or no additional
labor. Under code requirements, with larger diame­
ters the thickness of the pipe wall must increase to

Table 7.

Major technology changes in petroleum pipeline transportation

Labor implications

On-line computers read tempera­
tures, pressures, gravity, and/or
flow rates from tank gauges and
meters. These data are trans­
ferred to the central computer at
headquarters for tracking tank­
age line inventory, batch vol­
ume, and arrival and delivery
time, and for making dispatch
calculations. The central comput­
er stores information, performs
operating procedures such as
sequencing the insertion of batch
separators and scraper traps,
starting a pump unit at a specific
time, and picking up the status of
alarms. The cental computer also
carries out nonoperating functions
such as accounting tasks, engi­
neering calculations, and pipeline

Some workload at the cental loca­
tion declines for schedulers and
accounting clerks; shifts of tasks
from the field to dispatchers at
central control, in general, tend to
reduce the workload of process
control operators; work is less­
ened for gaugers in the field and
for accounting clerks at central
headquarters with direct input of
data. The need for computer spe­
cialists and technicians skilled in
the operation of computer equip­
ment rises as computerization

According to the most recent
available industry survey (1971),
22 percent of pipeline companies
acquire data through on-line com­
puters. 7 percent make dispatch
calculations using data acquired
on line and 9 percent perform
control functions and make status
inquiries from a cental control
location. 78 percent of all pipeline
companies use computers for
accounting, 69 percent for engi­
neering calculations and 51 per­
cent for pipeline design.1 Since
1971, computer use has spread
widely, according to an industry

Improvements in plant and equip­

Mainline pipe has increased in
diameter, wall thickness, and
strength. Pumping station design
and equipment have been stand­
ardized, with pumping units com­
bined by size to allow changes in
operating capacity depending on
viscosity of product. Delivering
stations use storage tanks with
built-in protective features and
also drainage techniques as a
warning system. Contamination is
avoided by design advances such
as adequate pipe size and heating
and pumping capacity.

More engineering personnel are
used in planning and implement­
ing efficiencies; also the workload
of maintenance workers is re­
duced with standardization of
layout and equipment. Upgrading
safety protection and control at
stations lessens the tasks of elec­
trical and mechanical technicians.

As new pipelines are built, pipe
size tends to be increased, per­
mitting wider latitude in volume
shipped. Further gains in pumping
equipment efficiency are limited
since 95-98 percent efficiency has
been reached, up 5-10 percent
since I960.2 Design advances are
restricted to newly constructed
lines. Computerization is required
for minimal contamination of
product in transit and for schedul­
ing flexibility; in 1971, restricted to
about 9 percent of the pipelines3
but has been expanded to many
companies, according to an indus­
try source.

Improvements in pipeline installa­
tion methods and materials

More station equipment is in­
stalled outdoors, and highway
crossings are better marked.
Automatic welding is used for
joining many line pipe sections
and for laying down filler and cap
passes in the field. Girth welds
are examined radiographically.
Specially designed
bending mandrels shape pipe to
ground contours without buckling
or loss of roundness. Pipe coating
materials are more specialized for
protection according to soil and
water conditions.

Construction methods which re­
duce somewhat the number of
structural failures lessen the tasks
of mechanical and corrosion tech­
nicians and utility workers.

In new pipeline construction, the
most recent advances in materials
and methods are implemented.
Also, as lines are located in areas
with unfamiliar climatic condi­
tions, experimental testing pre­
cedes the actual laying of pipe.

More extensive use of computers

i. ;,

'C. T. Carter, “ W hat’s Ahead for Liquids Pipe Line Automation,” Pipeline Industry, Part I, April 1973, p. 25.


-‘Information provided by M. U. Bagwell, Pipeline Engineering Specialist.
b a r te r , op. cit., p. 25.


Engineers measure, control, and monitor pipeline shipments by minicomputer

meet the added stress. The quality of steel pipe has
advanced in strength and weldability to meet these
more rigid standards. The combination of wall thick­
ness and grade of pipe steel may vary according to
the location of the pipe section along the line, with
higher specifications indicated for the discharge side
of pumping stations, congested areas, and river
crossings. In general, the cost of steel per unit of
product transported decreases as the pipeline diame­
ter increases, since the number of tons of steel re­
quired per mile for 1,000 barrels of daily capacity
also decreases.

units per station are standardized, and several large
units are combined with a smaller one. By cutting
off the smaller unit when pumping oils of higher vis­
cosity, both flow speed and risk of equipment dam­
age may be reduced. As larger diameter pipe is in­
stalled, the capacity of each unit is increased. Con­
sequently, expansions in capacity do not require
comparable expansions in maintenance crews, as the
number of units of equipment does not usually in­
Centrifugal pumps and auxiliary equipment at
main line stations of newly constructed pipelines
typically are interchangeable from one station to
another. As standardization is introduced, uniform
programs result in labor savings for technicians.

Pumping stations. Pumping stations throughout
some systems have been improved by the standardi­
zation of layout and equipment. Consequently, the
building to house station switchgear and controls,
some office and repair facilities, and station piping
may be prefabricated, reducing construction labor
requirements and overall construction costs.
Larger capacity pumping units have been designed
and built to service the more sizable pipelines re­
cently constructed. The number and size of pumping

Delivery stations. A new type of tank has been
designed to store petroleum temporarily removed
from the pipeline and awaiting delivery to the cus­
tomer. Automatic firefighting equipment and an im­
proved warning system for leakage protect the stor­
age tanks. These built-in safety factors reduce out­
put losses and tend to lessen routine maintenance

Communication systems. Central headquarters of
major pipelines are usually linked to on-line pumping
and delivery stations and storage tanks by an auto­
mated communication system equipped with two
process control computers. One computer actively
runs the system while the second provides standby
capacity in case the primary computer fails. The au­
tomated communication system may use ultrasonic
controls to monitor the flow level of the pipeline and
of inventory stored in tanks at remote locations and
to report immediately any malfunction or power fail­
ure. Surveillance of every line at central control is
facilitated for dispatchers by equipment sequenced
automatically to stop all valves. The operator is able
to throw a switch on the console to block the line
and stop the problem.
The automated control system shifts the workload
from the minicomputer operator at the on-line sta­
tion to the dispatcher at headquarters and eliminates
the need for continuous local manning (usually three
one-man shifts). With the advance in telecommuni­
cations from mechanical relays to solid state elec­
tronic equipment, a higher skill level is required of
technicians doing the servicing as well as of head­
quarters dispatchers manning the control system.

combining knowledge of scientific principles, materi­
als, and equipment (computers, geiger counters, air­
planes, etc.) to maximize deliveries with minimum
contamination. Systems are being designed using
pipe of adequate size to maintain a turbulent flow,
batches are scheduled in the largest possible quanti­
ties to minimize the number of connections required,
and products are cycled in the most advantageous
sequence. By adding furnaces and horsepower to
plant equipment, crude oil may be heated to reach
flow speed.
When on-line computers are used in the field to
track separate batches of petroleum flowing through
the pipelines, the standard procedures used by tech­
nicians to identify a batch change—comparing color
differences between two products or spotting a dye
tracer—are no longer required. Hence one task of
technicians at some delivery stations is eliminated.
Further, on-line computerization has advanced so
that process control operators in the field are able to
schedule the passage through the pipeline of a batch
separator, an automatic scraper, or a polyurethane
cleaning tool to remove waxy coating, water, or se­
diments from interior walls. These changes reduce
the workload of mechanical technicians.
A computer-controlled leak detection system has
been developed which displays leaks to dispatchers
monitoring the pipeline. More conspicuous pipeline
location indicators are being posted to avert ruptures
from earthmoving equipment and other sources
which interrupt production and damage the environ­
ment. Also, inspection from the air is being in­
creased. Every week an air patrol inspects the entire
pipeline to discover excavation work, locate spots
indicating leaks, and check fences and cathodic prot­
ection units. The patrol also makes two additional
weekly flights over congested areas. Inspectors pa­
trol water and telephone circuits in metropolitan re­
gions to narrow the danger of ruptures. These meth­
ods to protect output are expected to reduce labor
requirements of maintenance crews for repair work.
With the upgrading of measures to avoid ruptures
and improved product control at a station, the duties
of operators and maintenance staff usually become
more diversified. For example, electrical and me­
chanical technicians with some operating duties also
perform preventive maintehance. Or field personnel
may assume additional responsibilities usually per­
formed by minicomputers when communication with
headquarters is interrupted. Conversely, the introd­
uction of advanced computerization results in a
transfer of some routine workload from the field to
personnel at central headquarters.
Extension of a main pipeline or of delivery feeder
lines requires acquisition of a right-of-way. The real
estate and legal work involved in acquiring the right-

Installation methods

Advances in pipeline construction tend to decrease
maintenance requirements. More stations are now
built with equipment installed outdoors (where
weather permits). The marking of highway crossings
is being improved to lessen the frequency of acci­
dental ruptures of the line and thus to reduce repair
requirements. In laying the pipe, the number of
joints which must be welded onsite is minimized by
joining as many line pipe sections as possible with
automatic welding equipment in special yards. Weld­
ers using fully automatic welding machines at these
yards complete pipe welds at more than double the
rate possible with the conventional manual arc weld­
ing methods used onsite. Girth welds are examined
radiographically and pipeline weld crews also make
gamma ray inspections. Pipes are shaped to the con­
tour of the terrain without buckling or loss of round­
ness by especially designed pneumatic bending man­
drels. All these advances in pipe installation methods
are expected to reduce maintenance labor require­
ments. Also, new techniques for coating, laying, and
testing pipe at the time of installation improve the
durability of the pipeline and reduce the workload of
mechanical and corrosion technicians and utility
workers in repairing defects.
Product quality control. Precautions against losses
from pipeline shutdowns include measures to reduce
product contamination and leakage. Engineers are

of-way is currently being subcontracted by some
pipelines to specialists, with a consequent decline in
the tasks of their professional personnel.

1975 among the more than 50 industries in the pri­
vate economy for which BLS publishes indexes. The
industry’s superior performance is probably closely
related to its sustained high ratio of capital stock per
worker and its high rate of capacity utilization.6
Output per production worker hour for 1960—77
rose at an average annual rate of 8.9 percent, a high­
er rate of increase than for output per all-employee
hour. Average annual hours of production workers
fell at a 2.7-percent rate, a sharper decline than for
all-employee hours, reflecting the introduction of
advanced pipeline technology.

Production and Productivity Outlook

Output, defined as the total number of barrel-miles
of crude oil and other petroleum product traffic han­
dled in trunk lines, grew at an average annual rate of
5.9 percent from 1960 through 1977, based on Inter­
state Commerce Commission data. The yearly rate
reached 7.7 percent in 1960 -6 7 and declined to 3.9
percent during the 1967-77 period (chart 9).
Growth in output during 1960-76 was attributable
to continuous expansion in demand for crude oil and
other petroleum products and steady additions
through 1974 to total trunk line mileage in operation.
(A 3-percent drop in mileage operated occurred in
1975.) For the 1960-76 period, demand expanded
over 80 percent2 and miles of trunkline in operation
increased about 30 percentT Pipeline transportation
also was gaining in importance over the railroad,
trucking, and maritime industries as the mover of
petroleum products. Its share of total tonnage of
crude petroleum and products rose from 43 percent
in 1960 to 48 percent in 1976.4
Significantly, trunkline capacity increased more
than would be indicated by the rise in the number of
trunkline miles in operation. The new steel pipe of
larger diameter and higher tensile strength (which
allow more rapid throughput) also contributed.5 For
example, between the start of 1962 and 1965, petro­
leum pipeline capacity measured in miles increased 5
percent but pipeline fill measured in barrels in­
creased 17 percent. Line capacity was also enlarged
by the addition of pumping stations which improved
the flow rate.


Net capital stock (in constant dollars) increased in
the 1960—75 period by about 150 percent.7 For each
employee in 1975, net capital stock reached $354,000
compared to $98,000 in 1960, and for each production
worker, $463,000 in 1975 compared to $115,000 in
1960.8 Further increases are anticipated with the
completion of the Alaskan pipeline and proposed
additions to existing lines. In 1977, 205 miles of
pipelines for crude petroleum and 3,322 miles of line
for petroleum products were laid in the United
States.9 An additional 2,619 miles of crude lines and
2,196 miles of product lines were planned for 1978.10
(In 1977, 159,268 miles of pipeline were in operation
of which 51 percent were product lines.)11

Employment and Occupational Trends

Some 16,600 persons were engaged in petroleum
pipeline transportation in 1977, a drop of over 28
6 Pipelines operate at about full capacity as shipments are con­
tinuously adequate to fill the line through prior arrangement.
When new pipeline transportation is needed, a group of oil com­
panies usually form a joint venture to engage in interstate trans­
portation of crude oil and petroleum products subject to Interstate
Commerce Commission regulations as common carriers. Pipelines
are designed and constructed to handle throughput over a speci­
fied route and are projected for many years into the future. Load
factor is a primary consideration in decisionmaking since almost
all pipeline operating costs are fixed with the exception of fuel.
Each member of the joint venture guarantees to ship a fixed per­
centage of the load and thereby operations at full capacity are vir­
tually assured.
7 Source for capital investment is the Interstate Commerce
Commission and for its deflator the U.S. Department of Com­
8 Net capital stock per employee or production worker is de­
rived by dividing net capital stock (in constant dollars) by the to­
tal number of employees or production workers. Source for em­
ployment is U.S. Department of Labor.
9 “Total 9,540 Miles Line Laid in U.S.A.-Canada; 15,402 Miles
Foreign,” Pipe Line News, January 1978, p. 24.
10 “ 27,585 Miles of New Lines Planned Worldwide,” Pipe Line
News, January 1978, p. 8.
11 Data source is U.S. Department of Energy, Energy Informa­
tion Administration.


Productivity (output per hour for all employees)
grew at the average annual rate of 7.9 percent in the
1960-77 period, peaking at a 10.7 percent rate for
1960 -67 and dropping off to 5.3 percent for 1967—
77. The 1960-77 increase exceeded the gain in out­
put, reflecting a 1.8-percent average annual decline
in all-employee hours. Petroleum pipelines ranked
seventh in productivity growth between 1970 and2345
2 Data source is the U.S. Department of the Interior, Bureau of
3 Data source is the Interstate Commerce Commission.
4 Data sources are the U.S. Department of the Interior (oil pipe­
lines and motor carriers), U.S. Department of the Army (water
carriers), and the Interstate Commerce Commission (railroads).
5 Data source is the U.S. Department of the Interior, Bureau of


Chart 9

Output per employee hour and related data, petroleum pipeline
transportation, 1960-771
Index, 1 9 6 7 = 1 0 0




1 Data for 1 9 7 7 are preliminary.
Source: Bureau of Labor Statistics.


to program and service machines and to analyze data
will be needed. Maintenance technicians increasingly
will need both a thorough skill in their specialty and
pipeline experience. A knowledge of electronic solid
state communication systems, for example, will be
necessary for electricians. Mechanical work also is
more complex. Technology advances eliminate some
gauging jobs in the field. In the office, some work of
accounting clerks is becoming obsolete as many ac­
counting entries are made directly through central
control linkage with computers in the field.
The outlook is for an increase between 1970 and
1985 in the number of professional and technical,
managerial, sales, and clerical workers, and a dec­
line in craft workers, operatives, service workers
and laborers (chart II). Consistent with anticipated
growth in pipeline mileage, more drafters, electrical
and electronic engineers and technicians, inspectors,
airplane pilots, and support personnel such as ad­
ministrators, secretaries, and bookkeepers are ex­
pected to be needed. Conversely, fewer job possibil­
ities seem likely for construction laborers, stationary
engineers, and operatives such as oilers and greas­

percent since 1960 and an average annual decline of
2.0 percent (chart 10). The decline in employment
averaged 3.1 percent a year for 1960 -67 and 1.4
percent a year for 1967-77. Production workers dec­
lined at a 2.9-percent annual rate between 1960 and
1977 and decreased as a proportion of total employ­
ment from 86 percent in 1960 to 73 percent in 1977.
An increase of 0.3 percent a year in total employ­
ment is projected for the 1977-85 period. (See in­
troductory note for assumptions underlying projec­
The decline in employment over the past two de­
cades is explained partially by the introduction and
diffusion of advanced automated equipment. As des­
cribed earlier, computers have substantially reduced
hours worked on line and at central headquarters for
both operating and office tasks. Efficiencies in
plant design and equipment together with improved
installation methods have also contributed to the
reduction of unit labor requirements. However, addi­
tions to trunkline mileage are expected to add jobs
in the future.
The proportion of women employees in the indus­
try fluctuated within the 7- to 9-percent range be­
tween 1960 and 1977. >2 The jobs held by women are
typically located at central headquarters and tend to
be concentrated in secretarial and clerical positions.

Adjustment of workers to technological change

The decline in employment resulting from techno­
logical change in petroleum pipeline transportation
will probably be absorbed through attrition. Vacan­
cies are frequently filled by promoting employees
and supplementing the appointee’s qualifications by
company training. Also, as the technology advances,
the industry conducts training programs.
Unionization of pipeline transportation workers
has been hindered by their geographic dispersion and
the sizable number of small companies. Pipeline
workers are represented (on a vertically integrated
industry basis) by the Oil, Chemical and Atomic
Workers International Union (AFL—CIO), by craft
unions affiliated with the A FL-C IO , such as the
International Union of Operating Engineers, and by
unaffiliated independents.
Collective bargaining agreements in the petroleum
industry typically call for negotiation of wage prac­
tices and supplementary benefits, job and union se­
curity, working conditions, and other employer-em­
ployee relationships. Although the agreements may
not refer to adjustments that are required when tech­
nological changes occur, it is likely that, under such
conditions, the seniority provisions of the contract


As control of pipeline operations has been more
completely centralized with advanced computeriza­
tion, and as local manning of on-line facilities has
been reduced, managerial jobs such as assistant re­
gional manager and products manager have been
eliminated. Also, as technology has advanced, the
job content of a number of occupations has
changed. Generally, persons with more education
are being sought for entry level positions such as
process control operator and maintenance techni­
cian. More knowledge is needed to handle routine
and emergency tasks associated with more complex
and costly technology.
Manual scheduling is becoming obsolete so a
scheduler must be trained in both pipeline operations
and computers. Dispatchers also require such dual
training as they monitor the whole system centrally
and must be able to isolate and shut down every line
through computers (with backup support from on­
line field operators). As the use of computers and
telecommunications expands, additional technicians
12 Data source is Bureau of Labor Statistics.


Employment in petroleum pipeline transportation, 1960-77,
and projection for 1977-85
Employees (thousands)

1 Least squares trend method for historical data; compound interest method for projection.
Source: Bureau of Labor Statistics.


Chart 11

Projected changes in employment in petroleum pipeline
transportation, by occupational group, 1970-85

Occupational group

Percent of
in 1970

Professional and
technical workers


Managers, officials,
and proprietors


Sales workers


Clerical workers


Craft workers




Service workers




Source: Bureau of Labor Statistics.



Stiles, Robert E. “ Santa Fe Increases Efficiency with Central
Control Operation,” Pipe Line Industry, May 1974, pp. 32—34.

Carter, C. T. “ What’s Ahead for Liquids Pipe Line Automation,”
Pipe Line Industry, Part I, April 1973, pp. 25—27, and Part II,
May 1973, pp. 69 - 72.

Wolbert, Groger S., Jr. American Pipe Lines, Their Industrial
Structure, Economic Status and Legal Implications. Norman,
Okla: University of Oklahoma Press. 1952.

Smith, E. M., and D. T. Sweeney. “Computer Hefas Design, Run
Pipeline,” Oil and Gas Journal, December 8, 1975, pp. 94—106.


Techo, Robert, and D. L. Holbrook. “ Computer Scheduling the
World’s Biggest Pipeline,” Pipeline and Gas Journal, April
1974, pp. 27-30.

Hanism, C. William. Oilmen and What They Do. New York,
Franklin Watts, 1965.

“Tools, Technology Move Up with Increased Operations,” Pipe­
line and Gas Journal, July 15, 1976, pp. 2-16.

Lair, Robert G. “ Oil Industry Offers Career Opportunities Aplen­
ty,” Oil and Gas Journal, August 25, 1976. np. 46—78.


Ewing, Robert C. “ Pipeline Economics,” Oil and Gas Journal,
August 23, 1976, pp. 77-120.

Osborne, W. H. “ Human Response Controls Design of Pipeline
Control Room” Oil and Gas Journal, January 26, 1976, pp. 144—

Fehd, Carolyn S. “ Productivity in the Petroleum Pipeline Indus­
try,” Monthly Labor Review, April 1971, pp. 46 -48.

“ Welding and Welders May Be the Key to Quality,” Engineering
News Record, November 20, 1975, p. 20.


Chapter 5

Electric and Gas Utilities


response to changes in the size of electric generating
plants and the type of fuel used: Nuclear plants, for
instance, will require a larger proportion of scien­
tists, engineers, technicians, and security staff com­
pared to fossil-fuel plants. The construction and
maintenance of nuclear power plants require highly
skilled welders and other craft workers. Some con­
cern exists that possible labor shortages in some
craft and technical occupations could delay con­
struction of nuclear generating plants, and, if ex­
haust gas scrubbers become mandatory on coal-fired
plants, the number of engineers, technicians, and
maintenance personnel could increase substantially.

Technological changes in the electric power and
gas industry continue to lower labor requirements in
some occupations and raise productivity. Major in­
novations underway include the more widespread
use of computers to assist generating plant control
room operators in logging data, monitoring equip­
ment, and performing calculations; an increase in the
number of nuclear power stations, which generally
require a more highly skilled work force than con­
ventional plants of similar capacity; and the return
to coal as a major fuel source. The development of
highly mechanized vehicles for power line construc­
tion and repair has changed the size and occupation­
al makeup of power line work crews. The more
widespread use of extra-high-voltage transmission
also has brought about changes in power line repair
Capital expenditures have increased considerably
since 1960, reaching a level of $25.8 billion in 1977.
(In real terms, however, the increase is not this great
because the price of new plant and equipment has
increased.) Electric utility companies account for
most of the industry’s expenditures—about 84 per­
cent in 1977. Capital spending is expected to in­
crease fairly steadily over the next decade. Electric
utilities cancelled or postponed part of their planned
capital expenditures for 1974 and 1975 for a combi­
nation of reasons, including unfavorable economic
conditions, forecast reductions in demand, and prob­
lems with regulatory and environmental concerns,
but expenditures rose again in 1976 and 1977.
Output per all-employee hour increased at an aver­
age annual rate of 4.6 percent from 1960 to 1977,
with the most rapid increase occurring between 1960
and 1967. Due in part to technological changes, labor
requirements for operating and maintenance employ­
ees in electric generating plants have declined since
1960, and are lower per kilowatt of capacity for
large plants than for small plants. Employment grew
at the rather slow rate of 1.2 percent a year between
1960 and 1977, reaching a peak of 684,200 workers in
1974 and declining to 673,000 in 1977. Employment
is expected to continue to increase at an average
rate of 0.7 percent a year between 1977 and 1985.
Occupational requirements may change somewhat in

Technology in the 1970’s
Major technological changes are taking place in
the electric power and gas industry which directly
affect the industry’s work force and productivity.
These include the more widespread use of electronic
computers, nuclear power generation, and coal as a
major fuel for electric generating plants. Extra-highvoltage transmission will continue to make possible
the economical transmission of large quantities of
electric power. In constructing and maintaining
transmission lines, labor requirements are being re­
duced through the more efficient utilization of skilled
workers and fleets of mechanized vehicles by com­
puterized scheduling of work assignments. The me­
chanized fleets, however, require an increase in ve­
hicle maintenance crews. Innovations such as pro­
cess control computers, being introduced in an al­
ready highly instrumented environment, will have a
less extensive impact on employment and occupa­
tions than such changes as nuclear power installa­
tions, which require substantially more scientific and
technical staff than conventional installations of sim­
ilar capacity. Research now underway on coal lique­
faction and gasification processes may ultimately
provide a clean-burning fuel from an abundant ener­
gy source to replace oil and natural gas.
Electronic computers

Computers are used extensively in the utilities
industry. In addition to their now commonplace use
in business operations, computers are being applied
to generating plant operations, control over transmis50

sion systems, and scheduling of work assignments
for line crews.
Process control computers in generating plants
provide assistance to control room operators in start­
up operations, data logging, monitoring, and per­
formance calculations, and they are becoming stand­
ard equipment in new plants and in many older large
plants. Of the plants sampled in a recent survey,
nearly 76 percent used automatic data collection for
computerized performance calculations, and 24 per­
cent had computers with control-function capacity.1
Fuel savings, increased safety and reliability, re­
duced chance of operating errors leading to equip­
ment damage, and improvements in equipment utili­
zation are claimed. Many large plants have opera­
tions that are so complex that a substantial amount

of automatic control is required for safety and relia­
Process control computers are commonly applied
to economic dispatch and automatic load control—
operations principally concerned with dispatching
power over transmission lines and the coordination
of power generation and interchange. These opera­
tions have become so complex that dispatching per­
sonnel have difficulty assimilating the vast amount of
data available. The solution has been the develop­
ment of automatic control systems typically con­
sisting of digital computers, local and remote cath­
ode ray tube (CRT) terminals, animated diagram
boards, and a network of telemetering devices.
These systems provide dispatchers with the informa­
tion and control necessary to supply power economi­
cally at proper voltage and frequency throughout the
power system. The optimization of power produc­
tion, continuous control of generating units, and

1Gordon D. Friedlander, “ 20th Steam Station Cost Survey,”
Electrical World, Nov. 15, 1977, p. 51.

Generating plant control room with direct digital control computer system


improved reliability and accuracy of the system
provide direct economic benefits. Indirect benefits
include the improved coordination of loads between
interconnected utilities.
There are some applications of process control
computers to full closed-loop control of generating
plants—although this is generally limited to hydroe­
lectric stations. In one such application, a 4-unit 285megawatt (Mw) hydroelectric plant can be operated
automatically, either locally or by remote control
from a central dispatching center. In another appli­
cation, a 4-unit 225-Mw hydro plant is controlled
from a location 8 miles away; the only personnel at
the plant are security guards. The extent to which
closed-loop remote control of generating plants is
used is not known, but, where used, it allows some
reduction in operating personnel.
Computers can be applied to a number of other
operations, such as plant design, long- and short-term
planning, fossil-fuel scheduling, and nuclear core
analysis. The range of computer applications will
probably grow in the future as computer hardware
and software technology continues to develop.
Many of the computer applications require the use
of sophisticated mathematical models and techniques
—which, in turn, require programmers, systems ana­
lysts, peripheral-equipment operators, and others in
computer-related occupations. The demand for peo­
ple with computer-related job skills should increase
along with the increasing range of computer applica­
tions. Also, utility engineers must have training in
computer techniques to use computers for transmis­
sion and distribution (T&D) systems planning and
for studies of T&D operations.
Computers are also being used more widely to
schedule line crews with highly mechanized vehicles
to reduce time and cost in constructing and main­
taining transmission and distribution lines.

Nuclear generation of electric power has become
increasingly important over the past several years as
costs of commercial power generation have risen
and as concern has mounted over the future availa­
bility of petroleum. Problems associated with air pol­
lution caused by conventional power plants also
have been a factor. By the end of 1977, 49 licensed
nuclear plants were in operation, with 49,881 Mw, or
9.0 percent of total generating capacity.2 The Feder­
al Energy Regulatory Commission has estimated
that, by 1985, nuclear power plants may account for
18.6 percent of total generating capacity.523

The increase in the number of completed nuclear
power plants over the past several years has been
less than anticipated. Inflation, combined with tight
money markets and uncertainty as to future demand
growth, has caused postponements and cancellations
in the construction of a number of nuclear plants.
Opposition to nuclear power plants based on con­
cern over safety and environmental factors, nuclear
fuel reprocessing, and waste disposal also has
caused delays and cancellations. In addition, the
lead time for bringing a nuclear plant on line has in­
creased as a result of the growing complexity and
size of the plants themselves, changing Federal regu­
lations concerning construction and operation proce­
dures, and problems in finding suitable sites. In late
1972, lead time was about 7 years;4 by mid—1977,
lead time had increased to roughly 10-12 years.5
Most nuclear plants are virtually custom built, which
is time consuming and expensive. Standardized plant
designs (perhaps based on previously approved de­
signs) that can be mass produced and approved as a
group could shorten lead times by several years. The
Nuclear Regulatory Commission is encouraging such
an approach, and standardized plants are beginning
to be constructed. To hasten the process of approv­
ing sites for nuclear power plants, the Federal Gov­
ernment is proposing that States create, in effect,
“ site banks” by approving areas for nuclear plant
construction in advance of any licensing requests by
utility companies.6
There are several types of nuclear reactors in
commercial operation or under development. Lightwater reactors (LWR’s) presently dominate the nu­
clear power industry. These reactors use enriched
uranium-235 for fuel, which is somewhat limited in
supply, and they utilize heat energy from the reactor
core to convert water into the steam that drives the
turbine-generator units. Light-water reactors with
over 1,000-Mw capacities are now in operation.
High temperature gas reactor (HTGR) technology
is well developed in Europe. Only one gas-cooled
reactor, of 330 Mw, is operating in the United
States. Gas-cooled reactors offer greater thermal
efficiency than light-water reactors (39-percent effi­
ciency for HTGR’s, compared to the 33- to 34-per­
cent efficiency of LWR’s), reduce the effect of ther­
mal pollution, and use thorium as well as enriched
uranium for fuel. For gas-cooled reactors to be
commercially successful, their total generating costs
must be competitive with those of light-water reac­
tors and coal-fired plants, and conclusive cost data
are not yet available.

2 Monthly Power Plant Reports, FPC Form 4, U.S. Department
of Energy, 1977.
3 Department of Energy estimates.

4 “ Nuclear Survey: Lead Times Stabilizing,” Electrical World,
Oct. 15, 1972, p. 7.
5 “Carter Seeking Speed-Up of Nuclear Plant Licensing,” The
Washington Post, Aug. 4, 1977, p. A4.
6 Ibid.

Nuclear power


Table 8.

Major technology changes in electric and gas utilities


Labor implications


Reduces the time control room
operators and system load dis­
patchers spend reading instru­
ments, logging data, and perform­
ing calculations. Load dispatchers
would have difficulty assimilating
the amount of available data
Increased demand for people in
Some utility engineers required to
learn computer techniques.

Seventy-six percent of generating
plants use automatic data collec­
tion for computerized perform­
ance calculations, and 24 percent
have computers with control
function capacity.

Electronic computers

Process control computers in
generating plants are used for
data logging, monitoring, and per­
formance calculations, providing
fuel savings, increased safety and
reliability, and improvements in
equipment and labor utilization.
Process control computers are
commonly used in dispatching
power over transmission lines and
coordinating generating and inter­
change operations.
scheduling of labor and vehicles
has reduced time and costs in
maintenance and construction

Nuclear power generation

Light-water reactors currently
dominate the industry and one
high-temperature gas reactor is in
use. Some development work has
been done on breeder reactors.
Efforts are underway to standard­
ize nuclear power plant design in
order to facilitate the increasingly
complex licensing procedures.

Greater demand for scientific and
technical specialists and security
personnel than conventional pow­
er plants. Higher skill require­
ments for control room operators
and construction and maintenance

By the end of 1977, 49 licensed
nuclear plant were in operation,
providing about 9 percent of total
generating capacity.

Exhaust gas scrubbers for solid
coalbuming plants

Exhaust gas scrubbers remove
sulfur dioxide by forcing exhaust
gases through a water and lime­
stone slurry or some other chemi­
cal process prior to venting the
Scrubbers still have a number of
problems that must be solved
before they can be considered
completely successful.

Increased labor requirements for
maintenance activities.

More than 24 scrubbers were in­
stalled or under construction in
1974, according to Federal Power
Commission data. The number of
installations is expected to in­

Extra-high-voltage (EHV) trans­
mission of electric power

EHV technology has made possi­
ble the economical transmission
of large blocks of power, facilitat­
ing the development of regional
power pools.

Some increase in difficulty of
work due to use of higher towers
and need to use heavier equip­
ment on higher voltage lines. Use
of “ barehand” maintenance tech­
niques speeds repairs but requires
special training.

EHV technology now dominates
the transmission of electric pow­

Mechanized vehicles for con­
struction and maintenance of
power lines

Productivity has been increased in
the construction and maintenance
of transmission and distribution
lines by the combination of small,
highly trained line crews with a
large number of especially devel­
oped work vehicles.

Line crews now handle a greater
amount of work than was pre­
viously possible; consequently the
number of people in this occupa­
tion has not grown as rapidly as
the size of the transmission and
distribution network. Demand has
increased for vehicle maintenance

Presently in wide use.


ty used would have an impact on generating plant
storage capacity and on fuel and ash handling. There
are also transportation expenses involved when us­
ing western low-sulfur coal in the eastern part of the
A somewhat controversial solution is the installa­
tion in generating plants of exhaust gas scrubbers,
which are cleaning devices that remove much of the
sulfur dioxide from exhaust gases. Scrubber technol
ogy is still developing and needs further refinement
to be fully effective. Scrubbers are expensive—they
can add up to 50 percent of the cost of a boiler-gen­
erator system. They also consume from 1.5 to 5 per­
cent of the plant’s output. 7 Reliability has also been
a problem. The solution so far has been to build in
redundant equipment or to step up maintenance op­
erations—both of which are expensive procedures.
In one of the earliest scrubber installations, the plant
maintenance force had to be increased by 50 percent
to handle equipment breakdowns and corrosion
problems.K Many scrubbers produce large amounts
of watery sludge as a waste product. The disposal of
this sludge is a major unresolved problem.
The number of scrubber installations will probably
increase because, in spite of the problems and ex­
penses involved, scrubbers do provide control over
some of the pollutants caused by generating plants.
Scrubbers are complex equipment, and, as the num­
ber of installations increases nationwide, the number
of maintenance workers needed in the industry also
will rise.
An alternative to the direct burning of coal is the
conversion of coal to a gas or a liquid. For electric
utilities, advantages include the capability to remove
sulfur and ash during the conversion, thereby reduc­
ing air pollution when the converted coal is burned.
The coal converted by at least some of the several
gasification and liquefaction procedures that have
been proposed can be transported by pipeline. At
present, however, coal gasification and liquefaction
on a large scale are not commercially available, and
the cost and reliability of the processes have yet to
be proven. Given the present technology, these al­
ternatives are more expensive than the installation of
exhaust gas scrubbers in generating plants.9
Some generating plants that were designed to burn
oil or natural gas can also burn coal in liquid or gas­
eous form. Converting these plants to burn solid
coal, however, would be prohibitively expensive
and, in some cases, where insufficient land is availa-

A third type of reactor—the breeder reactor—is in
the development stage. The breeder reactor converts
uranium-238 or thorium-232 to fissionable plutonium239 or uranium-233 at a faster rate than it consumes
fuel, in effect creating more fuel than it uses. Most
of the development work has been concentrated on
the liquid-metal fast-breeder reactor, as this type of
reactor has the fastest conversion rate. The future of
breeder reactor technology is uncertain, however,
since development work is expensive and technically
difficult and requires extensive use of plutonium.
Labor requirements in nuclear plants differ from
those in fossil-fuel plants of similar capacity. Nucle­
ar plants tend to have more highly trained staffs, in­
cluding a larger number of scientists, engineers, and
technicians. More security personnel are required at
nuclear plants—a service which used to be contract­
ed out to private guard and detective agencies but is
now being handled to a larger extent by the utility
firms themselves. Nuclear plant operators must be
trained to work with fissionable material and must be
licensed by the Federal Government. Construction
and maintenance work in nuclear plants is done to
very exacting specifications and requires craft work­
ers with very high levels of skill. Maintenance crews
may be slightly larger at nuclear plants because
maintenance procedures are more complex. Regula­
tions concerning radiation exposure sometimes ne­
cessitate the use of protective clothing, which might
hamper working ability and decrease efficiency to
some extent.
Coal for fuel

Coal is the most abundant energy source in the
United States and was the primary fuel for steam
generating plants before 1965. Between 1965 and
1972, many utility firms switched from coal to oil.
Initially, this switch occurred because oil was less
expensive, but during the latter part of this period
pollution control also became an important consider­
ation. Much of the coal available in the United
States has a high sulfur content and is a major
source of air pollution from generating plants. Oil is
a cleaner burning fuel. By 1974, the problems inher­
ent in heavy reliance upon oil became clear: limited
domestic supplies and dependence upon foreign
sources. Coal, therefore, has become important
again to electric utilities.
The sulfur dioxide emissions that result from
burning solid coal remain a major air pollution prob­
lem. There are several possible solutions. There is
low-sulfur coal available, primarily in the vyestern
part of the United States. This coal generally has a
lower Btu (British thermal unit) content than highsulfur coal, requiring a greater quantity to be burned
for the same energy input. The differences in quanti­

7 Paul H. Weaver, “ Behind Ihe Great Scrubber Fracas,” For­
tune. Feb. 1975, p. 112.
8 Ibid.
9 Lawrence H. Weiss, “ Clean Fuel and Scrubbing Compared,”
Electrical World, Oct. 1, 1976, pp. 70-73.


ble for coal storage and for coal and ash handling
equipment, technically impractical.
Labor requirements in coal-fired plants tend to be
higher than those in oil- or gas-fired plants. Using
coal requires moving it from storage areas near the
plant to furnaces in the plant and cleaning out the
ash residue after the coal is burned. This work is
performed by “ fuel and ash handlers,” a semiskilled
occupation. The future use of coal in liquid or gas­
eous form, if ultimately proven commercially attrac­
tive for U.S. utilities, would eliminate the need for
this occupation (as has occurred in gas-fired plants)
and reduce total utility industry labor requirements.
Research on conversion of coal into synthetic gas or
to liquid form has been intensified because of vast
coal resources available within the United States and
concern over future availability of oil and natural
High-voltage transmission

Extra-high-voltage (EHV) technology now domi­
nates the transmission of electric power. Develop­
ments that have facilitated the growth of EHV trans­
mission include the introduction of bundles of two
or more conductors, insulator strings set in “ V”
configurations to control swing, the use in some in­
stances of guyed structures in place of self-supporting
towers, the use of aluminum and special steels in
line structures for reduced maintenance require­
ments, and the use of helicopters to facilitate con­
struction. As of August 1977, there were almost
117,000 miles of EHV transmission lines in serv­
ice. 10*The development of EHV technology makes
possible the economical transmission of large
amounts of electric power over long distances, with
significant reductions in right-of-way requirements
and corresponding reductions in right-of-way mainte­
nance operations compared to what would have been
required using lower voltage lines. EHV inter­
connections presently cover most of the country.
The higher voltages involved in EHV transmission
have caused some changes in work techniques. Line
crews work on higher towers using longer, heavier
“ hot sticks” and the more modern “ barehand” tech­
nique. “ Barehanding” is a process in which the
worker handling an energized circuit becomes a part
of the circuit, with precautions against grounding
(such as working in an insulated fiberglass bucket or
on a fiberglass ladder suspended from the line tow­
er). Under the proper circumstances, barehand re­
pairs can be completed in a fraction of the time re­
quired by more traditional methods.

Power line construction and maintenance

Construction and maintenance techniques continue
to improve, with crew size and productivity un­
dergoing change. The use of helicopters in rough ter­
rain, chemicals to control brush on rights-of-way,
and lighter metals in structures are among changes
that have reduced construction time and mainte­
nance requirements for line crews.
The vehicles used in constructing and maintaining
transmission and distribution (T&D) lines have un­
dergone considerable technological change over the
past 10-15 years—a change that has had quite an
impact on T&D workers. These vehicles (mostly
truck chassis weighing 22,000 to 40,000 lbs.) carry
hydraulically operated equipment, such as- 360-de­
gree rotating derricks and pole hole diggers, or aerial
lifts with booms that can range from 20 to 150 feet
high, or plows, backhoes, earth augers, cable pull­
ers, etc. This mechanization of mobile equipment
was well underway by the early 1960’s and has con­
tinued to grow rapidly, as illustrated by the in­
creased use of aerial lifts: The average utility used
10 aerial lifts in 1962 and 97 lifts in 1974. ^•
Vehicle mechanization grew so rapidly because
utilities needed to keep up with increasing construc­
tion demands with minimum increases in cost and in
the size of construction work crews. Additionally,
the cost of labor was increasing more rapidly than
the cost of construction equipment. In the mid1960’s, for example, the price of a 1/2-ton pickup
truck was equal to a top line crew worker’s pay for
455 hours of work. In 1974, the cost of a new pickup
truck was equivalent to a top line crew worker’s pay
for only 325 hours.12
Mechanized mobile equipment has made possible
a reduction in the size of construction work crews
and T&D line crews. Large, all-purpose line trucks
are used where work is concentrated in one area—
but generally with crews of 6 people rather than the
traditional 8- to 9-person line crews. A fleet of small­
er special-purpose vehicles with 2 or 3 crew mem­
bers each, equipped with 2-way radios and backed
by computerized scheduling of work assignments,
can generally provide the greatest productivity for
work scattered over large areas. A modern transmis­
sion line crew might typically consist of 4 aerial lifts,
an earth auger, and a digger/derrick truck with 2
crew members each, and a pickup truck for the su­
pervisor—7 specialized vehicles and a crew of 13
highly skilled workers.
The growing mobile fleet requires an increasing
commitment of resources—labor, equipment, and
“ Mechanization Revolutionizes
World, June I. 1974, p. 164.
'2 Ibid.

10 Department of Energy, Federal Energy Regulatory Commis­




managerial skill—for maintenance and repair opera­
tions. Over 90 percent of the utilities that own their
vehicle fleets operate service and repair facilities (al­
though some major repair work may be contracted
out). 13 Scheduled maintenance programs are neces­
sary to maximize vehicle availability and minimize
fleet operating costs. Managerial ability, sometimes
combined with computerized scheduling and record­
keeping, is necessary to operate such programs.
Maintenance personnel need to be familiar with both
automotive and hydraulic servicing and repair.

Capital expenditures

Expenditures for new plant and equipment in the
major industry group electric, gas, and sanitary serv­
ices (SIC 49)14 rose from $5.2 billion in 1960 to $25.8
billion in 1977, an average annual increase of 11.6
percent. (In real terms, however, the increase is not
as great since the price of plant and equipment has
risen over this period.) Most of the growth occurred
after 1967, with expenditures increasing at an aver­
age rate of 10.8 percent a year between 1967 and
1977. The average rate of growth between 1960 and
1967 was 7.8 percent a year.
Capital expenditures per nonsupervisory worker in
the industry have grown almost fivefold over the
past 17 years, from $10,143 per worker in 1960 to
$46,638 per worker in 1977—an average increase of
10.8 percent a year. The average annual growth rate
was 7.9 percent during 1960 —67 and 10.0 percent
during 1967 —77.
Electric utilities account for the largest portion of
the industry’s capital expenditures, with 69.1 percent
of 1960 expenditures and 83.7 percent of 1977 ex­
penditures. Electric utilities spent $3.6 .billion in
1960 and $21.6 billion in 1977—an increase averaging
13.2 percent a year. The average annual growth in
spending during 1960 -67 was 8.9 percent; the rate
during 1967 —77 was 12.1 percent.
The industry went through a period of economic
uncertainty during the mid-1970’s which had an im­
pact upon its capital spending activities. This is a
highly capital-intensive industry which for more than

15 years had a steady, predictable growth in demand
averaging 7.4 percent a year<5 —a situation that al­
lowed an orderly growth in capital expenditures.
However, in 1974 and to a lesser extent in 1975,
construction and fuel costs rose rapidly while the
growth in demand was well below the historical rate.
High interest rates and low stock market prices lim­
ited the ability of utilities to raise funds in the mo­
ney market. Problems with regulatory and environ­
mental concerns continued. In response to this situa­
tion, electric utility firms cancelled or postponed a
considerable part of their planned capital expendi­
tures. According to Business Week, 170,000 Mw or
47.2 percent of a planned 360,000-Mw generating
capacity were cancelled or significantly delayed in
1974J6 Electrical World noted that in 1975 capital
spending declined for the first time in the industry’s
history. 17
Expenditures turned upward again in 1976 and
1977. This resumption of capital spending reflected
the general improvement in economic conditions af­
ter 1975, the inability of utility companies to further
postpone to a significant degree generating plant
construction in the face of growing demand, and
concern over power shortages and service reliability.
The outlook over the next several years is for a
continued increase in expenditures. McGraw-Hill’s
1977 annual survey of business plans for capital
spending^ indicated that the electric utility industry
planned to spend $25.2 billion for new plant and
equipment in 1978, $27.5 billion in 1979, and $29.2
billion in 1980. Approximately 87—88 percent of
these funds were to be for machinery and equip­
ment; the balance was for buildings and vehicles.
A slower rate of growth in demand could ease the
pressure on generating capacity. Demand (kilowatthour sales) actually dropped slightly in 1974—a
short-run response to conservation efforts, the eco­
nomic downturn, and unexpectedly large increases in
the price of all energy sources, including electric
power. After a period of adjustment to higher ener­
gy costs, demand began to grow again, but at less
than the historical rate of 7.4 percent a year. The
Federal Energy Regulatory Commission’s Bureau of
Power considers a growth rate of 5.7 percent a year
to be likely between 1977 and 1986.

13 Michael G. McGraw, “ Fleet Management Becomes More
Sophisticated,” Electrical World, Aug. I, 1975, p. 38.

Carol J. Loomis, “ For the Utilities It’s a Fight for Surviv­
al,” Fortune, Mar. 1975, p. 97.
16“ Utilities: Weak Point in the Energy Future,” Business
Week, Jan. 20, 1975, p. 46.
17 “ 27th Annual Electrical Industry Forecast,” Electrical
World, Sept. 15, 1976, p. 58.
18 Business Plans for New Plants and Equipment, 1977-80, 30th
Annual McGraw-Hill Survey (New York, McGraw-Hill Publica­
tions Co., Economics Department) May 6, 1977.

14 Data are available from the Department of Commerce only
for this broader SIC 49 industry grouping, which, in addition to
including establishments which generate, transmit and/or distrib­
ute electricity, gas, or steam (SIC 491, 492, and 493), also in­
cludes establishments which distribute water, provide sanitary
services, supply steam, and operate water supply systems for irri­


Funds for research and development


There are several sources of research and devel­
opment funds in the electric power industry: Equip­
ment manufacturers, the Federal Government, and
the utility companies themselves. Equipment manu­
facturers perform much of the basic research and
development (R&D) work applicable to the electric
power industry, recouping their costs by selling the
equipment they develop to the power companies.
Federal R&D funds have been largely concentrated
in the development of nuclear power.
According to the Federal Energy Regulatory
Commission, annual R&D expenditures for class A
and class B electric utilities1920were in the range of
$37 million to $47 million between 1966 and 1970,
rising to $239 million in 1973. Expenditures declined
slightly to $234 million in 1974, but rose again to
$290 million in 1976. Only about 20 percent of these
funds were spent directly by utility companies. The
majority of the funds went to organizations such as
the Edison Electric Institute, the Electric Power
Research Institute, and the Battelle Memorial Insti­

Output per employee hour increased at an average
annual rate of 4.6 percent from 1960 to 1977 (chart
12). The growth rate was higher during the 1960 —67
period (6.3 percent per year) than between 1967 and
1977 (3.0 percent per year).
There may be a long-term decline occurring in the
rate of productivity growth. Although output contin­
ues to rise at a faster rate than employee hours, the
rate at which output is growing peaked in 1970 and
declined through 1977, while the rate of change for
employee hours continued to grow steadily through
1974 and was only slightly lower in 1975, 1976, and
1977. Hence, output per employee hour is growing,
but the average annual rate of growth has been grad­
ually declining since reaching a peak in 1964. The
productivity growth rate for nonsupervisory workers
has been higher, and the increase in employment has
been lower, than for all employees.
Electrical World publishes a continuing survey of
generating costs for electric utility steam plants that
includes data on the number of operating and
maintenance employees per Mw of net output. In
1960, 0.306 employees were required per Mw of
net output.21 By 1976, however, labor requirements
had declined by 60 percent to 0.122 employees per
Mw.22 The survey indicates that labor requirements
tend to be lower for larger generating plants. The
survey also indicates that labor requirements vary by
type of generating plant. Nuclear plants have the
greatest labor requirements per Mw, needing more
people in all occupations (except fuel and ash han­
dlers) than the other types of generating plants.
Coal-fired plants have the second highest level of
labor requirements, oil-fired plants the next, and gasfired plants the lowest.
The size of generating units is not likely to in­
crease as rapidly in the future as over the past 20
years, and nuclear and coal-fired plants are expected
to be the main sources of electric power in the fu­
ture. Labor requirements per Mw, therefore, may
not continue to decline as much as they have over
the past decade.

Production and Productivity Outlook

Output in electric power and gas (BLS weighted
index) increased at an average annual rate of 5.9
percent between 1960 and 1977 (chart 12). During
the 1960 -67 period, growth in output averaged 6.9
percent a year, while the 1967-77 period experi­
enced a lower average annual growth rate of 4.2
Output has grown steadily for many years. In
1974, however, demand for electricity declined in
response to price increases, economic conditions,
and conservation efforts. This contributed signifi­
cantly to the first drop in this industry’s output since
at least 1947. In 1975, output returned roughly to the
1973 level, and increased again in 1976 and 1977.
Output will probably continue to increase through
the coming decade for the industry as a whole.
Demand for electricity, as discussed earlier, is ex­
pected to increase steadily. For gas utilities, howev­
er, the outlook is not so positive. The supply of
domestic natural gas is declining and synthetic gas is
not expected to be available in significant quantity
until the late 1980’s. Use of imported natural gas can
be increased to some extent. The net result is a pro­
jected slight decline in the gas supply through

Employment and Occupational Trends

Employment in electric power and gas, according
to BLS data (SIC 491, 492, 493), increased rather
slowly from 582,300 in 1960 to a peak of 684,200 in
1974 and then declined to 673,000 in 1977. The aver­
age annual growth rate over the 1960-77 period was

Class A and class B electric utilities have accounted for
21 Leonard M. Olmsted, “ 14th Steam Station Cost Survey,”
t roughly 80 percent of total -kilowatt-hour sales over the past de­
Electrical World, Oct. 18, 1965, p. 104.
22 Friedlander, “ 20th Steam Station Cost Survey,” Electrical
20 United States Energy Through the Year 2000 (Revised) (U.S.
World, Nov. 15, 1977, p. 44.
Department of the Interior, Bureau of Mines, Dec. 1975), p. 65.


Chart 12

Output per employee hour and related data, electric
and gas utilities, 1960-771
Index, 1 9 6 7 = 1 0 0


1 Data for 1 9 7 7 are preliminary.
Source: Bureau of Labor Statistics.


1.2 percent, with most of the growth occurring after
1967. The average annual rates of change for 196067 and 1967—77 were 0.4 percent and 1.3 percent,
respectively. BLS projections to 1985 indicate that
growth in employment may average 0.7 percent a
year between 1977 and 1985 (chart 13).
Employment growth for nonsupervisory employ­
ees has been slower than for all employees; nonsu­
pervisory workers increased at an average rate of
0.8 percent a year between 1960 and 1977. The num­
ber of nonsupervisory workers was about the same
in 1960 and 1967 but then grew between 1967 and
1977 at an average annual rate of 0.8 percent.

craft workers (chart 14). Specific occupations in
which increases are expected include electrical engi­
neers, electronic technicians, computer specialists,
computer peripheral equipment operators, construc­
tion electricians, plumbers and pipefitters, boiler­
makers, machinists, line and cable workers, and
truckdrivers. Some of the occupations for which
declining employment is projected are keypunch
operators, furnace tenders and stokers, cleaning
service workers, and construction laborers (except
Some decline in the number of power plant opera­
tors is anticipated. Larger and more efficient equip­
ment is expected to create increases in output with
little or no increase in labor requirements. The same
number of people, for instance, can operate a large
generator or a small one.
The occupational structure at a fossil-fuel generat­
ing plant visited by BLS staff tends to support this
projection. This plant utilizes three generating units:
Two small units (175 Mw each) operated from one
centralized control room and one large unit (850
Mw) that has its own control room. Both control
rooms are run by four-person operating crews, al­
though the skill requirements are higher for the larger
generating unit.
However, a nuclear generating plant also visited
by BLS staff has somewhat different occupational
requirements. This plant uses larger and more highly
skilled control room operating crews—seven to eight
people, including a minimum of five operators li­
censed to work with fissionable fuel. Additionally,
there is an ongoing training/retraining program at the
plant to which operators are assigned on a rotating
basis. If this plant is representative of nuclear plants
in general, then an increase in the number of nuclear
plants could reduce the projected decline in the
number of power plant operators.
There has been some concern in the electric pow­
er industry about possible shortages of skilled con­
struction and operating personnel during the coming
decade. Such shortages would have greater impact
upon nuclear generating plants because of the many
special skills involved. Among the occupations criti­
cal for constructing and operating nuclear plants,
where shortages are possible, are nuclear, mechani­
cal, and electrical engineers, reactor operators,
health physics/radiation monitor technicians, mill­
wrights, and nuclear-qualified welders (most of
whom come from the ranks of steam/pipe fitters and
boilermakers). 24
A new labor demand model that forecasts power
plant construction employment has been developed


Technological and other factors are altering to
some extent the occupational structure in the electric
power and gas industry. One area of change is in the
balance of supervisory and nonsupervisory workers:
Nonsupervisory workers have declined from 89 per­
cent of total employment in 1960 to 83 percent in
A comparison was made of labor costs for various
occupations between a group of large generating
plants (averaging 2,626 Mw) and a group of smaller
plants (340 Mw) in 1975.23 Labor costs per net Mw
for the smaller plants were approximately 35 percent
higher for supervisors, 315 percent higher for operat­
ing personnel, 48 percent higher for maintenance
personnel, 200 percent higher for fuel and ash han­
dlers, and 188 percent higher for clerks.
The types of fuel used by generating plants also
affect occupational requirements. Fuel and ash
handlers are not required for plants using natural gas
but are needed in plants that burn coal and, to some
extent, in plants that burn oil. Also, nuclear plants
require more specialists than any type of fossil-fuel
plant. As nuclear plants and coal-fired plants are
expected to become the dominant types of power
plants over the next decade, the occupations of spe­
cialist and fuel and ash handler should become
more important.
Employment is projected to increase in six of the
eight major occupational groups, with the largest
increases expected to occur among professional and
technical workers, managers and administrators, and

Results from the survey of steam generating plants by Elec­
trical World indicate that the cost of operating and maintenance
employees per Mw of net output declined steadily from I960 to
1970, then rose somewhat in 1972, and declined again in 1974 (al­
though not returning to the 1970 level). In this study, 1960 data
are from the 14th Steam Station Cost Survey, Electrical World.
Data for 1962-72 are from Leonard M. Olmsted, “ 19th Steam
Station Cost Survey,” Electrical World, Nov. 15, 1975, p. 44. The
Project Independence (Federal Energy Administration, Nov.
20th Cost Survey, in 1977, did not have such detailed information
for labor cost.
1974), pp. 61-72.


Chart 13

Employment in electric and gas utilities, 1960-77,
and projection for 1977-85
Employees (thousands)
Average annual percent change*1
All employees

1 9 6 0 -7 7 ........................ . 1.2
1 9 6 0 - 6 7 ................... . 0 .4
1 9 6 7 -7 7 ................ . 1 .3
1 9 7 7 -8 5 (projection) . .

. 0 .7

Nonsupervisory workers

1 9 6 0 -7 7 ........................ . 0 .8
1 9 6 0 - 6 7 ................... . .0 .0
1 9 6 7 - 7 7 ................... .0 .8

All employees



Nonsupervisory workers

I9 6 0






1 Least squares trend method for historical data; compound interest method for projection.
Source: Bureau of Labor Statistics.


Chart 14

Projected changes in employment in electric and gas
utilities, by occupational group, 1970-851

Occupational group

Percent of
in 1970

Percent change


Professional and
technical workers

Managers, officials,
and proprietors

Clerical workers


Craft workers




1 Includes steam utilities. Projections are based on the latest occupational data for 1985 adjustea
for revisions of the 1985 employment projections.
Source: Bureau of Labor Statistics.

by the Departments of Labor and Energy and the
Tennessee Valley Authority. 25 The model covers
1978—81 and breaks employment estimates down by
region, occupation, and type of generating plant.
This model could be a useful tool for utility compa­
nies in estimating their employment needs.
Some increase is expected in occupations con­
cerned with the transmission and distribution of
electric power. The number of line and cable work­
ers should increase. Increased use of automatic
equipment in substations—allowing more remote
control operations—may cause a decline in regular
substation operators but an increase in the more
highly skilled mobile substation operators, who trav­
el from one remote-controlled substation to another.

late the controls of a nuclear reactor. The training
program used in the plant visited by BLS staff to
prepare operators for the NRC licensing test re­
quires between 6 months and a year to complete and
includes* extensive training in nuclear physics, radia­
tion protection, and power plant operations. The
NRC operator’s license must be renewed every 2
years; since nuclear power generation is a rapidly
evolving technology, the power company maintains
an ongoing retraining program for its operators.
Some utilities are installing simulators that will be
used to train nuclear operators. Control room super­
visors are required to hold a senior operator’s li­
cense which, in the company visited, requires an
additional 6 months of training.
About one-half of the workers in electric and gas
utilities are unionized. Of the several unions repre­
senting utility industry employees, the largest are the
International Brotherhood of Electrical Workers and
the Utility Workers Union of America.
Specific provisions relating to technological change
are not commonly found in collective bargaining
contracts for this industry. There are, however, con­
tract provisions pertaining to seniority, layoffs, job
training, and promotions that could be applied to job
losses resulting from technological change.

Adjustment of workers to technological change

Training programs are being established to facili­
tate adjustment of employees to the requirements of
new technology. Control room operators in nuclear
generating plants, for example, are licensed by the
Nuclear Regulatory Commission (NRC) to manipu25Willis J. Nordlund and John Mumford, “ Estimating Employ­
ment Potential in U.S. Energy Industry” . Monthly Labor Review,
May 1978, pp. 10-13.

Comar, C. L. “ Putting Plutonium in Perspective,”
World, December 1, 1976, pp. 39—41.


“ Mobile Equipment Paces System Growth and Slows Cost
Spread,” Electrical World, June 1, 1974, pp. 252—53.
i : j, ;

Federal Energy Administration. National Energy Outlook— 1976.

“ Nuclear Power Claims Major Capacity Role,” Electrical World,
June I, 1974, pp. 83-89.

“ From Fossil to Fusion: A Milestone Century of Technological
Progress,” Electrical World, June 1, 1974, pp. 76-78.

U.S. Department of Energy. Electric Power Supply and Demand
1978—1987 for the Contiguous United States. July 1978.

Graham, John. “The New Coal Age: Utility Needs will Bring
Unprecedented Demand,” Electrical World. June 1, 1975, pp.

V '

“ How to Enhance Productivity,” Electrical World, November I,
1976, pp. 39-41.

U.S. Department of Energy, Energy Information Administration.
Projections o f Energy Supply and Demand and Their Impacts:
Annual Report to Congress, Vol. II, 1977. Chapter 10, pp. 205 —

McGraw, Michael G. “ Fleet Management Becomes More Sophis­
ticated,” Electrical World, August 1, 1975, pp. 35—50.

“ Utilities Weigh Economics of Nuclear vs Coal,”
World, January 1, 1976, pp. 21—23-

“ Mechanization Revolutionizes Construction,” Electrical World,
June I, 1974, pp. 164—66.

Weaver, Paul H., “ Behind the Great Scrubber Fracas,” Fortune.
February 1975, pp. 106-14.



General References

National Science Foundation. Funds for Research and Develop­
ment. Annual.

U.S. Department of Labor, Bureau of Labor Statistics. Character­
istics of Major Collective Bargaining Agreements, July I, 1975.
Bull. 1957, 1977.

U.S. Department of Commerce, Industry and Trade Administra­
tion. U.S. Industrial Outlook, 1978. January 1978.

U.S. Department of Labor, Bureau of Labor Statistics. Employ­
ment and Earnings, United States, 1909-75. Bull. 1312-10, 1976.

U.S. Department of Commerce, Bureau of the Census, Annual
Survey o f Manufactures, 1976. December 1977.

U.S. Department of Labor, Bureau of Labor Statistics. Occupa­
tional Outlook Handbook, 1978-79 Edition. Bull. 1955, 1978.

U.S. Department of Commerce, Bureau o f Census. 1972 Census o f
Manufactures, General Summary. November 1975.
U.S. Department of Labor, Bureau of Labor Statistics. Productiv­
ity Indexes for Selected Industries, 1977 Edition. Bull. 1983,


Other BLS Publications
on Technological Change

Bulletins still in print may be purchased from the
Superintendent of Documents, Washington, D.C.
20402, or from regional offices of the Bureau of
Labor Statistics at the addresses shown on the inside
back cover. Out-of-print publications are available at
many public and school libraries and at Government
depository libraries. Publications marked with an
asterisk (*) also are available on microfiche and in
paper copy from the National Technical Information
Service, U.S. Department of Commerce, 5285 Port
Royal Road, Springfield, Virginia 22161.

Describes new printing technology and discusses
its impact on productivity, employment, occupation­
al requirements, and labor-management adjustments.
Railroad Technology and Manpower in the 1970's
(Bull. 1717, 1972), 90 pp. Out of print.
Describes changes in technology in the railroad
industry and projects their impact on productivity,
employment, occupational requirements, and meth­
ods of adjustment.
Outlook for Computer Process Control* (Bull. 1658,
1970), 70 pp.
Describes the impact of computer process control
on employment, occupations, skills, training, prod­
uction and productivity, and labor-management rela­

Technological Change and Its Labor Impact in Five
Industries (Bulletin 1961, 1977), 56 pp.
Appraises major technological changes emerging
in apparel, footwear, motor vehicles, railroads, and
retail trade and discusses their present and potential
impact on productivity and occupations.

Technology and Manpower in the Textile Industry o f
the I970’s* (Bull. 1578, 1968), 79 pp.
Describes changes in technology and their impact
on productivity, employment, occupational require­
ments, and labor-management relations.

Technological Change and Manpower Trends in Five
Industries (Bull. 1856, 1975), 58 pp.
Appraises major technological changes emerging
in pulp and paper, hydraulic cement, steel, aircraft
and missiles, and wholesale trade and discusses their
present and potential impact on productivity and

Manpower Planning for Technological Change: Case
Studies o f Telephone Operators (Bull. 1574, 1968),
34 pp. Out of print.
Policies and experiences of four offices in adjust­
ing to technological change.

Computer Manpower Outlook (Bull. 1826, 1974), 60
Describes current employment, education, and
training characteristics computer occupations, ex­
plores the impact of advancing technology on labor
supply and education for computer occupations, and
projects occupational requirements and their implica­
tions for training.

Job Redesign for Older Workers: Ten Case Studies*
(Bull. 1523, 1966), 63 pp. Out of print.
Examples of redesign of jobs to retain older work­
ers in employment.
Technological Trends in Major American Industriesf*
(Bull. 1474, 1966), 269 pp.
Appraises technological developments in 40 indus­
tries and the effects on output, productivity, and

Technological Change and Manpower Trends in Six
Industries (Bull. 1817, 1974), 66 pp. Out of print.
Appraises major technological changes emerging
in textile mill products, lumber and wood products,
tires and tubes, aluminum, banking, and health serv­
ices and discusses their present and potential impact
on productivity and occupations.

Outlook for Numerical Control o f Machine Tools*
(Bull. 1437, 1965), 63 pp. Out of print.
Outlook for this key technological innovation in
the metalworking industry and implications for prod­
uctivity, occupational requirements, training pro­
grams, employment, and industrial relations.

Outlook for Technology and Manpower in Printing
and Publishingf (Bull. 1774, 1973), 44 pp. Out of




0 -2 8 1 -4 1 2

(5 0 )

Indexes for
1978 Edition

This bulletin updates through 1977
indexes of output per employee for
the industries currently included in
the United States’ government pro­
gram of productivity measurement.
Data are presented for these indus­


Fill out and mail this coupon to
BLS Regional Office nearest
you or
Superintendent of Documents,
U.S. Government Printing Office,
Washington, D.C. 20402.
Make checks payable to
Superintendent of Documents.

Iron Mining
Copper Mining
Coai Mining
Nonmetallic Minerals
Canning and Preserving
Grain Mill Products
Bakery Products
Candy and Confectionery
Malt Beverages
Bottled and Canned Soft
Tobacco Products
Sawmills and Planing Mills
Paper, Paperboard, and
Pulp Mills
Corrugated and Solid Fiber
Synthetic Fibers


Petroleum Refining
Tires and Inner Tubes
Glass Containers
Hydraulic Cement
Structural Clay Products
Concrete Products
Ready-mixed Concrete
Gray Iron Foundries
Steel Foundries
Primary Smelting and
Refining of Copper, Lead,
and Zinc
• Primary Aluminum
• Copper Rolling and Drawing
• Aluminum Rolling and

• Metal Cans
• Major Household
• Radio and TV Receiving
• Motor Vehicles and
• Railroad Transportation
• Intercity Trucking
• Air Transportation
• Petroleum Pipelines
• Telephone Communications
• Gas and Electric Utilities
• Retail Food Stores
• Franchised New Car
• Gasoline Service Stations
• Eating and Drinking Places
• Hotels and Motels

Bureau of Labor Statistics
Regional Offices

Region I

1603 JFK Federal Building
Government Center
Boston, Mass 02203
Phone: (617) 223-6761

Region IV

1371 Peachtree Street, NE
Atlanta, Ga 30309
Phone: (404) 881-4418
Region V

Region II

Suit: 3400
1515 Broadway
New York, N Y 10036
Phone: (212) 399-5405
Region III

3535 Market Street
P O Box 13309
Philadelphia, Pa 19101
Phone: (215) 596-1154

9th Floor
Federal Office Building
230 S Dearborn Street
Chicago, III. 60604
Phone: (312) 353-1880

Regions VII and VIII*

911 Walnut Street
Kansas City, Mo. 64106
Phone: (816) 374-2481
Regions IX and X**

450 Golden Gate Avenue
Box 36017
San Francisco, Calif 94102
Phone: (415)556-4678

Region VI

Second Floor
555 Griffin Square Building
Dallas, Tex. 75202
Phone: (214) 749-3516

* Regions VII and VIII are serviced
by Kansas City
"Regions IX and X are serviced
by San Francisco