In order to meet the growing shortage of engineers and other professionals, oil and gas companies must convince college students of the industry's highly technical nature and the job opportunities it offers, said officials at Ernst & Young LLP, Houston.
"Obviously, a dilemma 20 years in the making won't be solved overnight. But by focusing our efforts, enhancing the industry's image, and prioritizing existing resources, the trend can be reversed," said Charles Swanson, Americas director of oil and gas operations at Ernst & Young.
He noted that the 1986 collapse of oil prices forced "hundreds of thousands" of workers out of the industry. But with the recent rise of oil and gas prices to record levels, those former workers haven't returned, nor have they been replaced with new talent.
The US Bureau of Labor Statistics tells the story: From 33,000 petroleum engineers employed in 1983, the number dropped to 18,000 in 2002. "The numbers for geologists and geophysicists are similar—from 65,000 in 1983 to 48,000 in 2002, a drop of 26%. Conversely, the number of computer systems analysts exploded from 276,000 in 1983 to 1.7 million in 2002—a growth of 531%," the report said.
It said an informal survey of the nation's 25 top universities, as listed by US News & World Report, revealed that only two offer undergraduate degrees in petroleum engineering, while 22 offer undergraduate degrees in network engineering or computer science. "From the two schools that offer petroleum engineering or geophysics programs—Texas A&M and the University of Texas—there were 75 graduates for the 2003-04 school year. The 22 schools with computer science or electrical engineering tracts graduated more than 2,250 students in the same time period," Ernst & Young reported.
Another source at Texas Tech University, Lubbock, Tex., reported that in the top 10 US schools with petroleum engineering programs, the average number of students enrolled in those programs totaled 101 in 1974, 548 in 1984, 111 in 1994, and 169 in 2004. "While the number of enrollees in the nation's top petroleum engineering schools has risen slightly since the mid- to late-1990s, today's enrollment numbers pale in comparison to 1984, a time when the price of a barrel of oil was also reaching record highs," said the Ernst & Young report.
"There are a few reasons the talent void in the oil and gas industry has perpetuated for almost 2 decades. Today's young work- force is made up of men and women who witnessed their parents being laid off from the oil and gas industry during the mid-1980s. Fearing the same fate, the next generation stayed relatively clear of the cyclical oil and gas industry," said Swanson. "Another hindrance is that the industry unjustly bears an unsophisticated image."
He said the industry must work to improve its image by emphasizing its contributions to the world. Energy workers can stand proudly alongside medical professionals and scientists in the importance of their roles and impact on the world, Swanson said.
As "a practical, short-term solution," Swanson advocates that oil and gas companies use wisely their compensation budgets to hire and retain talented technical workers while relying on contractors to perform noncore functions. That will allow the producers to concentrate on what they do best.
However, Swanson acknowledges that has become "increasingly difficult, given today's overwhelming accounting and reporting requirements."
