"Mamas, don't let your babies grow up to be...PEs"
Category: Economy & Business...
Posted Tuesday, June 28, 2005 at 08:13 AM [GMT-6]

A Wall Street Journal article focuses on a problem that anyone associated with the oil business has understood for more than a decade:

The stickiest problem [in finding and producing additional oil and natural gas], however, may be finding enough experts to execute oil projects. The U.S. oil sector's main lobby, the American Petroleum Institute, said last month that industry employment peaked at more than 860,000 jobs in 1982, then shed more than half a million jobs through 2000. And API says enrollment in petroleum-engineering programs at U.S. universities stood at about 1,500 students in 2003, down 85% from a 1985 peak. Yet the companies surveyed by API, which represent just 17% of the industry, said they expect to need more than 5,000 engineers in the next five years.

Years of boom-and-bust cycles and the related downsizing and cost-cutting pretty much took the glow off the industry as an attractive career choice for college students. I know parents who had successful professional careers in the business but were loathe to recommend that their children follow in their footsteps due to the uncertainties. Couple that with the tens of thousands of oil and gas professionals who finally got fed up and left for other lines of work, and you get the situation we now find ourselves in.

This is a problem without a quick solution because of the time it takes to refill the pipeline (no pun intended) with qualified and experienced personnel. Figure four years for a degree in Petroleum Engineering, Geology or Geophysics, plus another couple of years to get some hands-on experience -- that's a long lead time to fix a situation that's already having measurable impact.

Of course, an interesting question is the extent to which the perceived supply crunch has its roots in the industry's historic "hunker-down" mode.

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Comments

I can't get a seismo crew out, and even if I was sitting on Spindletop, I couldn't get a drilling rig for 6-12 months, and if I did it myself with a shovel and a pick, nobody can build a pipeline for another 12 months.

AND...I can't sell my first-born, mortgage to the hilt, and go buy any of that stuff and make a nickel that way. It's all gone. We were looking at renting from as far away as Alaska and bringing it down just to lease it out. But those boys are as busy as we are.

It's a sad situation...money's laying on the ground, and we're trying to grow hands.

Posted by: Scott Chaffin at June 28, 2005 01:10 PM

How bad is it? Independent producers in town are talking about {gasp} having their own drilling rigs built, and then owning them. Shades of 1981!

Posted by: Eric at June 28, 2005 01:19 PM

There are rigs in Old Mexico, I hear. Wonder how
much it would cost to rent and transport?

The repair costs would be substantial, they don't
know how to maintain equipment or don't want to.

Wonder how much the Petroleum Museum would charge to fix their's up and rent it?

Papa Ray
West Texas
USA

Posted by: Papa Ray at June 28, 2005 02:49 PM

Wonder how much the Petroleum Museum would charge to fix their's up and rent it?

You know, I had that same thought. I even wondered if that old cable tool rig could be put back into operation! ;-)

Posted by: Eric at June 28, 2005 02:53 PM
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