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The Dallas Morning News: Oil industry seeks engineers, geologists

High prices raising need for workforce

08:17 AM CST on Sunday, December 9, 2007
By ELIZABETH SOUDER / The Dallas Morning News
[email protected]

This is a good time to look for a job in the oil industry.

The price per barrel hasn’t hit the century mark this year, as many observers had predicted, but it’s hovering in the high $80s.

As oil prices boom, the people who know the secrets to pumping oil out of the ground are becoming more valuable. And Texas universities are churning out more petroleum engineers than any other state as well as hundreds of geologists.

“We’ve easily doubled the number of applicants since the price of oil went up,” said Dr. Tim Taylor, a senior lecturer in the petroleum and geosystems engineering department at the University of Texas at Austin. “We’re trying to control the number enrolled at around 400, but it’s hard to do because we’re getting so many applicants.”

The last oil bust thinned the ranks of oil workers so severely that the industry faces a labor shortage that could make it difficult to meet U.S. energy needs.

Professors are optimistic their students won’t face the layoffs the industry saw in the past couple of decades. They say global demand for petroleum has reached a new pitch that should support high oil prices for some time – maybe even permanently.

Lauren Welker, a junior geology major at the University of Texas at Austin, didn’t choose her field because oil prices were high. She didn’t even want to work for a “big bad oil company” when she first enrolled at the Jackson School of Geosciences, the largest geology college in the country.

She’s changing her mind.

“I actually talked with oil companies, and the media definitely plays them out to be more horrible than they really are,” she said.

“Exxon Mobil, for instance, they have places in London and Melbourne and Indonesia and Nigeria, so there’s lots of job opportunities. Of course you have to pay your time in Houston, be stuck there for a time, but you have opportunities to work all over the world, which is pretty attractive,” she said.

Money’s good

The salaries aren’t bad, either.

Petroleum engineers get starting salaries of $75,000 a year on average, and some get signing bonuses. Fresh geologists can land as much as $80,000 a year.

That’s more than some of their professors are making.

“The oil prices are proxy for salaries that are being paid to individuals,” said Eric Barron, dean of the Jackson School of Geosciences at the University of Texas at Austin.

Enrollment at the Jackson School has an uncanny relationship with the price of oil. Boom times attract students; busts lead to empty classrooms.

The same is happening at the geology and petroleum engineering programs at Texas A&M University and Texas Tech University.

Texas A&M’s petroleum engineering program, the largest in the country, plans to boost total enrollment by more than a third during the next four years to 984 students. That includes more than doubling undergraduate enrollment at the university’s campus in Qatar.

Workforce concerns

Texas universities won’t solve the oil industry’s labor problem single-handedly.

Most oil companies slowed down hiring during the bust of the late 1980s and 1990s or laid people off.

Lots of people in the workforce were hired during the last oil boom three decades ago, and they’re nearing retirement. And as top managers leave, there aren’t enough experienced people to replace them.

A report earlier this year from the National Petroleum Council, which advises the U.S. Secretary of Energy, articulated this concern:

“The U.S. energy industry faces a dramatic human resource shortage that could undermine the future development of technological advances needed to meet the demand for increasingly diversified energy sources.

“A majority of the industry’s technical workforce is nearing retirement eligibility, and the number of American graduates in engineering and geosciences has dropped substantially during the last quarter century, compromising future delivery of technology advances.”

Meanwhile, the easy oil has been had. Oil companies are drilling in more difficult terrain, such as deep in the ocean or in the arctic.

“As an industry, we face daily the technological and logistical challenge of delivering vast quantities of energy, safely and in an environmentally responsible manner,” Exxon chief executive Rex Tillerson said in a speech to Hispanic college students earlier this year.

“Our ability to continue meeting this daily challenge will depend on future innovations developed by new generations of explorers – including, I hope, some of you here today,” he said.

Despite the growth in programs in Texas, the number of geology degrees awarded across the country is declining, according to the American Geological Institute.

Only 2,436 people received bachelor’s degrees in geosciences in 2005, the most recent data available. That’s down from 2,707 in 2004.

“There is a lag time for seeing increased enrollments due to market factors, so we might expect to see an increase over the next few years with today’s record oil prices,” said Cindy Martinez, a geoscience workforce specialist with the institute.

Higher forever

There’s hardly a concern at the University of Texas that incoming freshmen will arrive to the oil boom too late. In fact, professors offer a sobering thought: Oil prices might never drop significantly.

“Things are different now. The demand for hydrocarbons is growing exponentially,” Dr. Taylor said.

Even as growth in oil demand in Western countries levels off, developing countries are ravenous for oil. That’s keeping supply and demand for oil tight.

Oil markets might cycle up and down but at a higher price level than past booms and busts, he said.

But Ms. Welker, the social coordinator for the Undergraduate Geological Society at the University of Texas, says most of her peers don’t base career choices on commodity markets. They truly love rocks. “No one says, ugh, I’m doing this for the money,” she said.

“Not like business students. You see a lot of unhappy business students.”

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-oilschool_09bus.ART.State.Edition1.2a519e5.html

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