Emily Stover DeRocco Speech

American Petroleum Institute Annual Meeting

Pasadena, CA
October 18, 2004

Good morning and thank you all for coming today. It is nice to be among friends, particularly in California.

On the plane out here yesterday, I was reading up on the oil and gas industry…it's incredible what you read and don't read in the press.

I'm sure none of this is news to you, but of the entire domestic supply of oil last month, only 65% of it was imported. And of that, only 12.3% came from the Persian Gulf.

What was most astounding though was that Canada is our largest foreign supplier of oil!?! And Mexico is second!

You know, it makes me wonder…if the wars today are really about oil and greed, aren't there two countries a little closer to home that would have been a lot easier?

Anyway, I found it interesting that only 65% of our oil supply is imported. That means that 35% of the 20 million barrels a day needed to fuel our economy is produced right here in the United States.

And obviously it's not just oil either. With another 1.7 million barrels of liquid natural gas produced every month here in the United States, it is pretty clear that our economy and indeed, the world economy, would collapse without the twin engines of American oil and gas.

That makes the health of your industry and in particular, your workforce, an interest to all of us. Something else I read on the plane was that the average age of your workforce is around 50. Now, that certainly does not imply that 50 is old, but there clearly seems to be a lack of young people entering your industry.

Earlier this month, I met with some of your colleagues from the mining industry and discovered a similar problem. They, like you, are trying to attract young people to the energy industry but are struggling with a negative image of the industry. That's astounding, particularly when you learn that the salaries are well above average, reaching upwards of $100,000.

Finally, even when you do find interested workers, most lack the necessary math and science skills needed to be successful. It is a problem that is all too common in this country, affecting nearly every industry and jeopardizing our position as the leader of the global economy.

Fortunately for you, the host of this event, the American Petroleum Institute, recognizes the workforce crisis brewing in your industry. Their workforce survey details the challenges facing your industry and provides a starting point from which you can develop solutions to these challenges.

And fortunately for all of us, George W. Bush is President and he recognizes the incredible transformation our economy is experiencing and the need for all government systems and programs to keep pace with this change.

Often referring to the Ownership Society, President Bush is proposing a series of major changes to our tax code, our pension system, and our education and worker training systems that will return power to individual Americans and provide them with the tools needed to keep pace in this real-time global economy.

As the Assistant Secretary of Labor for Employment and Training, it is the worker training system that I am responsible for. Commonly known as the public workforce system, it is funded at $15 billion a year and is made up of a series of federal, state, and local employment and training programs delivered through a network of 3,500 One Stop Career Centers.

For too many years, this system was seen and operated as a social service network, detached from the local economy and run under strict instructions from Washington. No longer. The first series of steps have been taken to put employers in charge of these training dollars and President Bush is proposing much greater changes to make this system a vital part of every local area's economic development strategy.

Now, obviously things do not move that quickly on Capitol Hill, even though majorities give the illusion of control, so President Bush has pushed forward a demonstration of these sweeping changes called the High Growth Job Training Initiative.

First, we selected industries as diverse as our nation's economy, covering booming traditional areas such as health care and construction, incredibly transforming industries like advanced manufacturing, and emerging futuristic ones like biotechnology and geospatial technology.

For reasons I have already covered, energy is a critical part of our nation's economy and is experiencing both strong growth and significant transformation, thereby making it an easy decision to include you in our targeted industries.

We are currently in the process of conducting what we call executive forums, in which we typically meet with 10-to-15 executives from leading companies in the industry to educate them about the workforce investment system and in turn learn about the workforce challenges they face.

The next step in the process is what we call validation. We will conduct forums with human resource personnel from your industry and workforce experts from our industry to confirm that we are focusing in the right areas and develop solutions to the issues and challenges that you have identified.

I've already touched on some of the workforce challenges found by API including the image of the industry, the graying of the workforce, and the educational achievement of the next generation. You may or may not be surprised to know that most of the industries we have already studied face nearly the same basic challenges as the energy industry.

It should be less of a surprise then, that as we started developing solutions to these challenges, they too had similar themes like expanding the pipeline of young workers, developing standardized curriculum and competency models, and moving workers from declining industries to growing ones.

To demonstrate these solutions, the Department of Labor began funding projects in states and local areas. Over the last several months, we have funded 85 grants in our major industries totaling over $144 million. We're obviously a little earlier in the process with the energy industry, but I hope that we have solutions to announce by this coming March.

The common aspect of all the solutions in our other industries is a partnership between the workforce system, the industry's employers, and the education system, in particular community colleges.

We have somehow reached a point in this country where all three of these major partners operate in a vacuum. The education system, and I mean all levels of education, teach our children for the sake of education itself, without thinking about the fact that these children will someday soon become adults who must earn a living with the skills learned school.

The workforce system has a similar problem. Half of the system is there to train people and the other half to find people jobs, but each with little thought to the local economy or economic development strategy and with little authority to integrate functions so training and employment can operate as one.

And finally, the employers in this country have given up on the extended training programs of past, instead satisfied with bemoaning the state of education as they bring in as many foreign workers as there are H or L visas available.

This situation is not anyone's fault, and is in fact, a natural result of faction politics and Adam Smith economics. But since we have discovered the problem and identified the solution, there can be no excuse for not taking the actions necessary to overcome it.

Obviously the High Growth Job Training Initiative is but a start. But it is the difference that we can make at this present time. I hope each of you are willing to share your thoughts and concerns about the future of your workforce, if not now, then privately at a later date.

We are in a global economy where the sleeping giants of China, India, and Brazil are starting to awaken. With nearly half the world population between them, this is not something to fear but instead a chance to access 2.5 billion more customers. But only if we produce a workforce with the talent level needed to advantage of the opportunities and discover the innovations that will drive this new economy.

Thank you very much. It has been a pleasure to speak to you toady and I am looking forward to our panel discussion. Thank you.