Where Will the Next Generation Come From?

Eve S. Sprunt, 2006 SPE President • president@spe.org

One of the things an SPE President is supposed to do is encourage students to study petroleum engineering. With the age demographics in the industry and the current high oil prices, this might seem like a “no brainer.” But, memories of the 1980’s gave me pause.

The problem is that the supply of students is not something you turn on and off quickly. Students pay a lot of attention to who is getting the good jobs, but a senior can’t change his/her major on a whim. The information trickles down to younger students, so it takes a couple of years to see a response. The lag time in the response is clearly illustrated in Fig. 1, which compares the inflation-adjusted oil price with the number of bachelor-level petroleum engineering degrees granted in the U.S.

Fig. 1—Petroleum engineering degrees lag oil price. (Data on the number of PE degrees awarded courtesy of Mukul Sharma, U. of Texas.)

The U.S. students who graduated after oil prices peaked in 1981 had a difficult time finding jobs. Many of them never received a job offer in the industry. Some students had their job offers rescinded. The image of the petroleum industry took a beating in the process.

Even after layoffs began and only a few students got job offers, an unusually large number of students were graduating as petroleum engineers. Just as students can’t easily change their majors to take advantage of a hot job market, they can’t easily switch to avoid an industry that is downsizing. To change majors, a student may have to prolong his/her education. Many students cannot afford the extra time in college.

Some people think that independent of oil price, companies will be hiring for many years to replace retirees. The answer is not that simple. If companies hired in response to retirements, the skewed age distribution never would have developed. While companies watch their age distributions and complain about them, they hire in response to activity, and activity follows oil price. Even in good times, companies are under relentless pressure to reduce operating expenses. People are a just-in-time commodity, to be acquired as needed.

The advantage of a new employee with a brand-new bachelor’s degree in petroleum engineering is that he/she can become functional much faster than someone with a different technical degree. However, to maintain their skills after graduation, everyone must be learning constantly about new technical developments. Facilitating this learning is SPE’s major function. While graduates from another engineering or science discipline may take longer to get started, they can become excellent petroleum engineers. Many of the most distinguished technical professionals in our industry were trained in other disciplines.

In the long run our industry will benefit from having people with a variety of technical backgrounds. People with diverse backgrounds approach problems in different ways, and working together may develop better solutions.

Based on my assessment of past hiring patterns, I don’t recommend large expansions of petroleum engineering degree programs. To supplement the current supply of petroleum engineering students, I prefer to encourage other students to study science and engineering and to consider careers in the petroleum industry. That way if the job market turns before they graduate, we do not have an oversupply of petroleum engineers.

SPE can play a major role in promoting petroleum industry careers, not only with students in petroleum engineering programs but also with students in other relevant technical degree programs. Halliburton is generously sponsoring student members worldwide by paying their SPE dues. Students do not have to be majoring in petroleum engineering to participate, but they do need to be pursuing a degree in a related field. Since 2002, the Halliburton program has facilitated addition of 28 student chapters, and we now have 150 student chapters in 44 countries. As of year end 2005, SPE had 16,792 student members. Table 1 shows the top 10 countries in terms of numbers of SPE student members.

About 150 universities have subscriptions to the eLibrary. BJ Services generously sponsors eLibrary subscriptions for universities with SPE student chapters. In 2005, through 118 sponsored subscriptions, almost 350,000 papers were downloaded—the equivalent of 39 downloads per hour, every hour.

SPE can also assist with the training of both new-hire petroleum engineers and new hires from other disciplines, who are working as petroleum engineers. SPE Young Professionals and eMentoring programs as well as short courses, conferences, workshops, Technical Interest Groups, and publications are a great way to bring people up to speed.

As companies seek new sources of technical talent, visiting SPE student chapters is a wonderful way to assess the talent available. A list of student chapters including contact info is available under the Young Members tab on our website. Volunteer to make a presentation to a student chapter near you or to one in an area that you are visiting.

Questions from students about a technical talk reveal a lot about quality of the education they are receiving. When I visited University Technology Petronas in Malaysia, the faculty told me that their program was designed to emphasize critical thinking. The perceptive and probing questions the students asked convinced me that the faculty had accomplished their objective.

Become involved with student paper contests. These contests are a terrific way for students to learn the skills involved in documenting and presenting their work. Serving as a judge of a student paper contest enables you to discover who the best students are and which universities have a good track record for producing contest winners.

Another win-win is to visit student chapters to talk about work/life balance. Not every job in our industry involves the same amount of travel, hours of overtime, and frequency of relocation. Students need to know the big picture to make good choices. When I visited Brazil’s Universidade Estadual de Campinas, masters-degree students told me that presentations on working life were not given frequently enough. These students are at the university for only 2 years, so they would like presentations on different types of careers within petroleum engineering at least every other year, if not annually.

I urge SPE members to get involved with students and young members. It is very rewarding. As SPE President, I have had the pleasure of visiting SPE student chapters worldwide. Fortunately, you don’t have to be an SPE President to interact with student chapters. Volunteer to assist with a student paper contest; give a technical talk; describe what the life style is like for your job. Whether you just graduated a few years ago or are the age of their parents, these young people are eager to listen to you!

SPE Meetings on the Industry’s Future Personnel Needs

Asia Pacific Colloquium on Education and Training for the Petroleum Industry, 16–19 July 2006, Penang, Malaysia
Crisis Point: Supplying Technical Professionals To Meet Growing Business Demand, 30 August 2006, Paphos, Cyprus

See www.spe.org for additional details about these events.

Letter to the Editor

I have been involved in the oil and gas industry before school, during school (U. of Texas petroleum engineering department), and since. I am as much in favor of oil and gas production as it is possible to be. But Eve Sprunt’s column in the February issue on natural gas is so lost. She supports natural gas electric generation and wants more. We all want natural gas, but we are out of it. A trip down the Rhone River area in France showed me the answer. No one will allow more atomic generating plants in the U.S. But in France, which gets more than half of its electricity from nuclear power, there are numerous new housing developments very near atomic generating plants. This is a real possible solution. More natural gas generating plants is not.
Russell Green, Healdsburg, Californa

Ms. Sprunt responds: It is incorrect to say that we have run out of natural gas. However, higher prices encourage users to seek alternatives. In response to higher prices in the U.S. for natural gas, there has been a surge of interest in electrical generation using clean coal technology in which the use of coal is combined with CO2 capture and storage and pollutant scrubbing. Electric utilities are also exploring the potential for new nuclear plants in the U.S. even though the storage of spent nuclear fuel remains a problem. A good source of information on the U.S. power generation industry’s future plans is the Electric Power Research Inst.’s website at www.epri.com.