Guest Editorial: Industry Must Showcase Its Strengths, Support Universities
- Ali Daneshy (U. of Houston and Tecton Energy LLC)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- March 2006
- Document Type
- Journal Paper
- 28 - 29
- 2006. Copyright is retained by the author. This document is distributed by SPE with the permission of the author. Contact the author for permission to use material from this document.
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Even old-timers like me who, with age and experience, have become cynical about the predictability and stability of the oil and gas market are grudgingly admitting that the present price regime is likely to be around for quite some time. The drivers of this market are economic progress in countries that have huge growth capacity and the financial means to pay for the energy that will fuel it, as well as the global awareness of the need for cleaner energy. While higher prices have stimulated investment in the industry, they also have created a new set of market dynamics that have upset the equilibrium that existed just a few years ago. The manifestations of this imbalance are shortages; higher prices and long waiting times for materials, equipment, and services; shortages in refining capacity; public discomfort with rapid price changes; and stiff competition for the limited available trained human resources and skills. This article addresses the longer-term issues of skills availability, in terms of both technologies that will enable the extraction of more oil and gas from available conventional and unconventional sources and the people who will execute these technologies.
Over the last 2 years, the shortage of technical skills has become a concern of many in the industry. High starting salaries and sign-up bonuses are used as enticements for attracting talent. But these do not increase the pool of available people; they only cause a shift in employment. The longer-term approach has been to hire nonpetroleum engineers and give them in-house training. In fact, the combined number of mechanical and chemical engineers hired by our industry is higher than petroleum engineers. But the shortage of engineering talent is not limited to our industry; it persists in many other industries as well. There is a dire need for a long-term solution to this problem.
The Demographic Challenge
This issue should be addressed in light of the following:
- The need for trained technical people in the oil and gas industry is expected to grow by around 30% over the next 10–20 years.
- At the end of 2005, the average age of an SPE member was 48. That suggests that within the next 10–20 years, more than 50% of the present workforce will be exiting the industry.
- Within the younger and more idealistic age group, the industry’s image needs great improvement. This has limited our ability to attract the best and the brightest who are needed to face and overcome the enormous challenges of the future.
- The capacity of universities to train petroleum engineers has decreased over the last 2 decades. In the U.S., enrollment in petroleum engineering programs is now less than 20% of its peak 2 decades ago. Either directly or indirectly, the training of many technical people working in the oil and gas industry is U.S.-based. The limited enrollment in the U.S. will have adverse global effects in the future.
- The U.S. has severely limited the granting of student visas to Middle Eastern applicants. As citizens of these countries seek education opportunities outside of the U.S., there will be a gradual shift in the culture of our industry.
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