TULSA — The petroleum engineering field has been hit with a double whammy - the pandemic and the natural fluctuation of the oil and gas industry.
Petroleum engineering students hope to have the most lucrative occupation in America outside of the medical field in the biggest industry in the world. On March 1, the U.S. was the world’s leading producer of oil, outputting 13 million barrels a day. But everything changed when the COVID-19 pandemic hit.
Tom Seng, Director of the School of Energy Economics, Policy and Commerce at the University of Tulsa said, “I don’t think we’re ever going to return to where we were March 1.”
That directly results in a sharp decline in college enrollment into these programs. Dr. Mohan Kelkar, chairperson of the School of Petroleum Engineering at TU estimates the school had about 538 students in 2015. Now, the school has about 120 students. That’s a nearly 78 percent decrease in enrollment in just five years.
The problem is not unique to the University of Tulsa. Petroleum engineering programs across the country have had ups and downs over the years, according to a study from Texas Tech. However, right now, enrollment is heading down.
Dr. Lloyd Heinze, who graduated from TU but now works Texas Tech University, conducted that study. He said. “(The programs) all dropped approximately half what their bachelor’s degree output was going back three or four years.”
He found that enrollment trends follow oil prices by two years. Dr. Heinze explained, “The two years is back to the fact that if I’m a junior or senior in my engineering program, it’s too late for me to change my mind and switch majors. but if I’m a freshman or sophomore, I’m going to switch my major when I see what’s going on.”
What happened to the oil and gas industry?
We know oil and gas prices naturally fluctuate over time, but that’s only part of the problem.
Seng said, “There’s going to be a percentage of people working from home who will continue to work from home . . . there’s going to be reduced amount of commuter miles, so that’s going to impact gasoline and diesel.”
A situation where supply is greater than the demand. There is also a surge in efficiency.
Kelkar explained, “To produce the same barrel of oil, we don’t need as many engineers. Essentially, one engineer could operate maybe 20 wells 20 years ago. Now, an engineer can operate 700 or 800 wells because everything is electronic.”
For comparison, Kelkar said, “In the 1940s and 1950s, 50 percent of Americans works in the farmlands. Today, only about five percent work in the farmlands. Are we out of jobs? No. We find new industries.”
So, the need to graduate more students is going down. But there are still students who find themselves in the middle of programs.
Seng said, “I think students who have an interest in energy are still going to go into these programs and they’re going to get their degrees and hope for the bets from a job perspective. But also, there are a lot of transferable skills that these students pick up.”
Why would a student stay in the oil and gas industry?
Kelkar said, “Industrial infrastructure is such that there is no way we can eliminate fossil fuel usage. We have to use fossil fuel. The question is: how do we contribute to climate change as a fossil fuel industry by developing better technologies to to minimize the CO-2 emission?”
It takes petroleum engineers working with environmentalists to figure that out. Fossil fuels are used for transportation, electricity, making steel, plastic, cement, and more. Those are all things that are not going away even with a push for electric cars, wind power, and solar power.
Dr. Kelkar said fossil fuels are not going away even with initiatives like the Green New Deal, especially the need for fossil fuels outside of the U.S. “You simply cannot deny developing countries the use of fossil fuels, which Europeans and Americans have used in the past, because now we are worried about climate change.”
How will the oil and gas industry survive?
Exports.
The demand for oil in other countries is increasing and will continue to do so.
Kelkar said the average American consumes 21 barrels of oil every year, while the average Indian consumes about 1.5 barrels of oil a year. “If they want to improve their standard of living, they need more energy.”
Unfortunately for petroleum engineering students, all of this isn’t going to happen overnight, as is reflected on the job boards and the number of oil and gas companies throwing in the towel. Seng lamented, “For students right now who are majoring in disciplines like petroleum engineering and geology, the prospects of a full-time job come June right after graduation are fairly dim.”
Kelkar seems a bit more optimistic, saying, “As far as the job market is concerned, I am absolutely certain that we will see an improvement in the job market. I just hope that we can conquer this COVID-19 because that has really adversely impacted us.”
So when the dust settles, these professors seem optimistic about the petroleum engineering industry. It just may look a little different than what we’re used to.
Kelkar said, “We want to accept what is going on around us, and we want to embrace it.” Seng added, "We understand there are shifting dynamics, and we are going to evolve as the energy picture in the United States evolves.”
Although there are strong energy companies like ONEOK and Williams, Tulsans can see the shift within the city of Tulsa, formerly known as the “Oil Capital of the World,” with companies like WPX moving away.
Tom Seng stated, “I just don’t see oil and gas production as a big part of Tulsa’s economy moving forward . . . It’s not the end of the oil and gas industry in Tulsa, by any means. But I think it’s kind of the end of looking at Tulsa as an oil and gas town, which it’s been for 100 years."
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