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Insights across the energy value chain

I graduated from Texas A&M with my Bachelor of Science (BS) in Petroleum Engineering (PetE) in 1990. The Oil & Gas industry had just gone through the big “bust” of the 80’s. We were slowly awakening from our nightmare and quietly licking our wounds. Some students in my class were the first in several years to receive more than 1 job offer before graduation. The class was also the smallest since the late 1970’s. We only had 23 PetE graduates, compared to 246 in 1984.

As the industry recovered through the late 1990s, we faced a new challenge. There were not enough engineers, particularly those in middle management. Additionally, many who graduated in the 80’s & 90’s left the business completely. After seeing its major cycles, new students shied away from PetE, but industry leaders called on universities to produce more engineers to meet the growing demand. Several schools, such as Texas A&M and The University of Texas (UT), intentionally took a cautious approach, slowly opening the enrollment and recruiting choke.

Then, the new boom hit. Changing global supply and demands, plus innovative technologies unlocked the treasures of unconventional shales. With so much opportunity depending on new reservoir and technology understandings, quality engineers became even more important. This time, universities responded in a big way.

Back to School

How we can Learn from the Past to Produce Quality Oil & Gas Engineers TodayThis week I received detailed enrollment and degree information for all US PetE programs. The chart to the right shows that the rapid rise of PetE BS degrees awarded from 2007 to present almost exactly matches the graduation rate from 1975 to 1983. Between the increase in degrees awarded and corresponding overall enrollment numbers, we’ve certainly succeeded in moving to meet current demand. But, are we about to repeat the lessons we supposedly learned in the mid-1980’s? Natural gas prices have cratered, but what will happen to hiring levels if oil prices drop to $65 per barrel? Or even $50 per barrel?

Many engineers are reaching retirement age and much of the increase is necessary just to keep business moving forward. So, it’s a safe bet to say we can continue to absorb these numbers in the short-term. But, with such a marked increase in graduates, will universities be able to produce high-quality engineers who can move quickly up the learning curve?

Balancing Act

How we can Learn from the Past to Produce Quality Oil & Gas Engineers TodayLooking at the ratio of total US PetE undergrads to total faculty, we’ve risen from a roughly 8:1 average ratio in the early 1990s to 32:1 currently. Ratios at individual universities vary from about 20:1 at schools like A&M and UT, to about 70:1 at several schools with high enrollment figures.

In talking with Dr. Hill and others at A&M, hiring and retaining top-notch faculty is a continuous challenge. Technology in the classroom is helping to manage the balancing act. Drillinginfo and others work closely with universities and consortium to help train up the next generation. But, how can we expect colleges with 70:1 student/faculty ratios to produce the level of engineers we need today?

Assuming we can maintain consistent hiring through economic cycles and that we can continue to produce high-quality engineers, what can universities do to help engineers provide real value to their companies faster? There are several ways, but two of the most prominent needs I see in working with Drillinginfo’s clients are:

  • Unconventionals Specialists: Unconventional plays require intense technical knowledge that changes on a dime. This means the industry needs creative minds who can find new methods to further unlock the potential of these plays. With such changes, it is imperative universities teach and develop students who can understand these trends.
  • Statistical Perspective & Understanding of Big Data: At DrillingInfo, our analytics team assists our clients to better understand the immense data derived from unconventional operations. We see the need for a better marriage between “pure” engineering and analytics/statistics. There are hundreds of experiments occurring with every well drilled. To understand what really works, we first have to determine the geological drivers and then perform multi-variant analysis. Engineers take many years of calculus, but get little-to-no real analytical/statistical training. If we are going to continue along the path of energy independence, we need universities to help students understand the full-scope of Oil & Gas analytics.

Since the 80’s we’ve often said, “Lord – just give us one more boom. We promise not to screw it up this time!” Hopefully, our industry will use the lessons learned over the past few decades to ensure we maintain quality graduates who can remain employed in this great industry for a lifetime because, in the words of George Santayana, “Those who cannot remember the past are condemned to repeat it.”

Note: University statistics provided by Dr. Lloyd R. Heinze, Professor of PetE at Texas Tech University. His efforts to gather data from US PetE department heads across the county provide our industry with much-needed perspective.

What do you think? What else can universities and industry do to ensure we continue to educate and hire the world’s best engineers? Please, leave your comments below.

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