Chapter 7: Dead in the Water
Students seeking internships and permanent employment are being challenged like no other time in the history of our industry. Along with guidance, SPE President Tom Blasingame shares his outlook on the future of the oil and gas industry and the opportunities it offers.
Prosperity tries the fortunate, adversity the great.
If There’s No Wind, Then Row, Swim, or Build an Engine
Be courteous to all, but intimate with few, and let those few be well tried before you give them your confidence.
Warning to readers: Direct guidance ahead.
In the past month, I have spoken formally to more than 10 groups as SPE President, and probably another five groups informally, as just Tom. In each instance, the current situation for students seeking employment is, well, dead in the water. This is typically a tough time of year as companies make their commitments in the September–November time frame and tend to reengage in the March–May time frame for positions that were not filled or perhaps for new positions that were recently created. Typically is the operative word here. Late 2020 and early 2021 are anything but typical, and students seeking internships and permanent employment are being challenged like no other time in the history of our industry.
So what does one do? I have broken this down as follows:
Row. “Rowing” is a metaphor for knowing what works and enduring the monotonous and back-breaking effort to create and maintain momentum in the job-seeking process; make getting a job your job. Leave no stone unturned and go to where the jobs are. Don’t wait for the jobs to come to you. I am sure that some reading this will say, “This is the old lecture about exercise making you stronger.” While that is true, it is also about the raw discipline of knowing what must be done and doing it. Rowing is slow and tedious. But rowing works.
Swim. “Swimming” is a metaphor for survival. If all else fails, take whatever job you can find: pumper, roughneck, roustabout, pipeline engineer, water resources engineer, environmental engineer, etc. Being willing and able to take a job no one else will take sets you apart. It creates an innate sense of survival and gives a person the discipline to succeed no matter the challenge. Many successful petroleum engineers started in something else, while many people who wanted to be petroleum engineers found success in fields they would never have considered such as municipal utilities, food service, and even the medical field. Success is survival; in the end, all of us can learn to swim.
Build an Engine. This is where YOU build the engine to power YOUR vision. For some, this could be more education or an alternate career pathway (e.g., teaching or governmental service/employment). For others, driven by their vision of a technical or process “gap,” they might create a software firm or other service firm. Although extremely risky for those with little or no experience, students/recent graduates and young professionals (YPs) can also create their own oil and gas firms. In fact, I have had former students do all of these. Building your own engine is extremely difficult, and it absolutely must be driven by a passion for innovating and creating. One must also be acutely aware of the risks. In simple terms, this is an extreme risk/reward scenario, but those who have a vision can and will succeed.
Pursuant to my warning at the beginning of this section, I must also state the following:
- Good grades will open doors and average or poor grades close doors.
- Show some (any) work experience; employers need to know that you know how to function in an actual work environment. I would also add that the more challenging the job, the better. Delivering pizza or driving an Uber is still better than sitting at home.
For students and YPs
- In the present and foreseeable future, being average is not, nor will be, good enough.
- No one is going to give you employment; you must compete to be employed.
- You must commit to arriving earlier, staying later, and working harder than everyone else.
- Technical skills matter. These skills add value; make sure you get sharp and stay sharp technically.
Have no doubt, the pandemic will pass, and the oil and gas industry will recover. However, employers will expect you to deliver at least two major disciplines (e.g., reservoir and production) and have a third discipline of competence (e.g., machine learning/optimization, project management, geoscience, high-performance computing, etc.). Siloed skills will not be particularly useful, and this will be a severe limitation for some people.
To close this section, I remind the reader that they have three options: rowing (brute-force career management); swimming (doing whatever it takes to survive); and building an engine (creating your own means of propulsion). I don’t have a Magic 8 Ball or Ouija board that will tell you which path to take. Only you know what you are capable of and what is best for you.
Future of the Oil and Gas Industry
Only the guy who isn’t rowing has time to rock the boat.
In February 2021, I was asked to prepare an op-ed article for the London SPE section, and I would like to share some of this material with you (abridged for space limitations) so that you know where I have put a stake in the ground concerning my perspectives of the future of the oil and gas industry. To be sure, these are my opinions, based on observations, intuition, and likely paths. Any/all can be disputed, but I have done my best to be objective.
Perspectives of the Future
- Our best years are ahead of us; we are an essential industry.
- The industry will continue consolidation due to financial and competitive pressures.
- In the next 5–10 years, investments in equipment-related technologies will lag.
- In the next 5–10 years, investments in automation and artificial/augmented intelligence will surge.
- A pinch point in supply will occur in 18–36 months due to lack of exploration/development.
- Natural gas will emerge as the transition fuel, surpassing oil demand by 2060 (if not sooner).
Evolution of the Energy Industry (my thoughts are in random order)
- Whether a source or a carrier, energy density matters; ultimately, hydrogen wins.
- Oil and gas are the essential fuels for energy transition.
- Wind and solar will win the renewables race; tidal could (and should) be competitive.
- The cost of geothermal (wells, completions, facilities) must come down by 50–75%.
- In 30 years, the energy market will diversify, but hydrocarbons will still dominate by two- to threefold.
- Oil and gas “energy companies” should lead the energy transition, but will they?
While I am often asked to talk about the future of the discipline and the industry, I also want to remind everyone reading this article that we must focus on the tasks at hand as well in 2021 (data below sourced from the International Energy Agency, 2021).
- We will need to produce approximately 97 million B/D.
- We will need to produce approximately 4,370 Bcm/year of natural gas (or 0.42 Tcf/D).
- We will need to transport more than 500 Bcm/year (or 0.0484 Tcf/D) as LNG.
Also, the US DOE Energy Information Administration (EIA) 2021 Annual Energy Outlook predicts “that petroleum and other (petroleum-based) liquid fuels will remain the most consumed fuel in the US before 2050.” And yes, I realize that such predictions are “regional” (in this case, the US) and replete with uncertain factors and assumptions. Still, the reality is that oil and natural gas will remain an essential resource for a very, very long time, especially in regions where conventional and unconventional oil and gas are both abundant and secure.
SPE’s Commitment To Deliver
The more I practice, the luckier I get.
SPE is evolving behind the scenes to meet the challenges of today and tomorrow. In-person and virtual programming are the priorities in terms of events as well as the continued evolution of our technical resources (JPT, OnePetro, PetroWiki, and SPEConnect). As we evolve, I would also like to mention that we need more volunteer contributions in terms of program and service committees and ideas for how we fulfill our mission of technical dissemination and engagement.
One of these volunteer work groups took on the challenge of making real data available with the objective of supporting innovation and advancing the science. Their initial focus is production data sets for unconventional oil and gas wells. After working quietly on the project for more than a year, they landed a single “angel donor” who provided 53 separate well cases (all in the US). This is only the first phase, and we hope that more members (and their organizations) will contribute. The group also plans to gather and post public data where available, as well as cases from SPE literature. The website for this project is located at https://www.spe.org/en/industry/berg/. I encourage you to make use of these data for your own work. An SPE member login is required to access and download these data.
If you have specific ideas that SPE could/should consider, please speak up. The SPE Board of Directors, the SPE senior staff, and I all welcome progressive and innovative ideas, concepts, and programs to further SPE’s mission. My personal perspective is that we need more open-access data and source-code share sites, while acknowledging that these are very challenging to build. Still, I will also note that we have excellent volunteer engagement on these sorts of initiatives.
As I close, I would like to mention that in one of the many (virtual) meetings I have attended recently, I was asked, “How can SPE membership benefit you (the member)?” In that question, I was taken back to 2017 when I was first nominated to serve as SPE President. I approached my career-long mentor with the question “How do I get our members to do more for SPE?” My mentor’s answer was fantastic. In his simplicity, he just calmly replied, “Ask not what SPE can do for you, but what you can do for SPE.” I know my mentor is a bit of a history buff, so I expected something interesting, perhaps even Kennedy-esque. Still, his message was a simple reminder that we all could and should give more time and effort to SPE. I hope you feel the same, and I thank you for your commitment and service to SPE.
As always, please feel free to contact me at firstname.lastname@example.org for any feedback.
2021 oil production: https://www.iea.org/reports/oil-market-report-january-2021
2021 gas production: https://www.iea.org/reports/gas-2020/2021-2025-rebound-and-beyond
2021 Annual Energy Outlook—US DOE EIA: https://www.eia.gov/outlooks/aeo/