Rachael Seeley
OGJ Special Projects*
A phenomenon known as the Big Crew Change is under way in the oil and gas industry as the baby boomer generation reaches retirement age, and the industry works to bring young people up-to-speed to fill the shoes left behind.
Barry Russell, president and chief executive officer of the Independent Petroleum Association of America, estimates that 50% of engineering and geosciences professionals will be eligible for retirement in coming years as the workforce ages.
This demographic shift comes at a time when the US is experiencing an energy renaissance, and the need for skilled workers is rising. US oil production averaged 8.5 million b/d in July. Output from Texas-the largest producing state-has more than doubled in the last 3 years to more than 3 million b/d. The Lone Star State now produces more oil than Mexico.
Over the past 4 years, production in Texas and North Dakota, the second-largest producing state, increased at average annual rates of 28% and 37%, respectively, according to the US Energy Information Administration.
Natural gas production is up, too. A few years ago, the US was widely expected to be a large importer of LNG, and now projects are lining up to export US-produced gas overseas.
Developing new talent
This energy renaissance is being driven by the complex, labor-intensive exploitation of shale and tight-oil reservoirs. Young people trained in science, technology, engineering, and mathematics (STEM) are needed to advance this work and fill the void left by the retiring baby boomer generation.
IPAA has teamed up with Petroleum Equipment & Services Association to prepare a new generation to take the helm of the industry. In 2008, the professional organizations formed the Petroleum Academy, a program that gives high school students a foundation in STEM subjects and first-hand experience in the industry.
The magnet program now has 1,000 enrollees in five Texas high schools-four in Houston and one in Fort Worth. Beyond instruction in STEM subjects, the program also offers competitions, college and industry site visits, industry guest speakers, externships, job shadowing, scholarships, and curriculum support.
A glance at the upcoming schedule for students at Houston's Milby High School is revealing. It includes guest speakers from Schlumberger Ltd., Halliburton Co., Weatherford International Ltd., and the Houston branch of the Federal Reserve Bank of Dallas.
"It's a deep workforce development initiative," said academy director Anne Ford.
Ford said the academy allows students "to see how these subjects play out in the real world of the energy industry." In their senior year, they can complete an externship with oil companies like Newfield Exploration Co. and Marathon Oil Corp.
A hands-on experience
According to a recent report from Wells Fargo Securities, more than 10,000 baby boomers retire in the US every day. The Petroleum Academy is the industry's way of getting young people interested in energy careers. "Waiting until students are in college is too late," Ford said. The goal is to "get them as informed as possible so by the time they get into college they know what they want to do."
The academy this year opened its biggest branch yet. The Energy Institute High School in Houston is the first school dedicated solely to the Petroleum Academy experience. It has inaugural freshman class of 200 students.
Ford said the academy has been approached with requests to open more high school programs, but "what we do is very resource intensive," both from a financial and human standpoint.
The program has spent millions since its inception and is on the lookout for more backers and volunteers, Ford said. Financial sponsors include Apache Corp., EOG Resources Corp., ExxonMobil Corp., Schlumberger, and Halliburton.
As the baby boomer workforce in the oil and gas industry changes, the need for young people to fill the shoes of retiring professions will only grow. The Petroleum Academy is one way the industry is addressing this challenge head on.
*Rachael Seeley is editor of OGJ's Unconventional Oil & Gas Report.