The newly discovered abundance of domestic oil and gas is creating a shortage of something else… the petroleum engineers who REGULATE drilling activities. They approve drilling plans and inspect wells after they’re completed to make sure they’re not at risk of contaminating water or blowing out… but as Wyoming Public Radio’s Stephanie Joyce reports for Inside Energy, these days there just aren’t enough regulators to go around.
Wyoming’s Oil and Gas Commission has a serious staffing problem. The Commission is down to just two petroleum engineers -- Mark Watson, the Oil and Gas Supervisor, and one with less than a year of experience. Watson is in the process of trying to hire three more.
“And I just interviewed a girl who just graduated from the University of Wyoming, and she was offered a job with a major company for $105,000. And I thought, ‘ooof.’ You’re making $25,000 more than me and I have 30 years experience.”
You heard that right. The state’s top oil and gas regulator makes less than a recent college graduate working in industry. And that’s pretty standard. Nationwide, petroleum engineers working in industry make 70% more than those working for governments, according to data from the Bureau of Labor Statistics. Watson says he’s lobbying for increased starting salaries, but it’s a long bureaucratic process and he has people to hire in the meantime.
That’s where the problems arise. Domestic oil and gas production is skyrocketing - in one Wyoming county alone, over a hundred new drilling applications have been filed SO FAR in the month of May. But Petroleum Engineers who want to be regulators - the people who process those drilling applications, among other things - are few and far between. The industry is busy and….
“When they’re busy, we’re busy, and we’re competing for a limited source of skills and knowledge.”
That’s Michael Madrid. He’s fluid minerals chief for the Bureau of Land Management in Wyoming, and oversees hiring of petroleum engineers who regulate drilling on federal land. He says being short-staffed on the regulatory side is bad for everyone -- including industry --
“The work will eventually get done, but there’s long, significant delays if we’re short-handed.”
Right now, the BLM in Wyoming is actually mostly staffed. But there’s concern about the future, and not just in Wyoming. A recent report by the Government Accountability Office says nationwide BLM offices are ALL facing staff shortages. Madrid says hanging on to people is a challenge when they can walk across the street and get a job that pays twice as much.
“Don’t have a good track record of retaining them. And it hurts when you've got someone who’s finally got four or five years of experience... who finally gets, if you will. And then they leave.”
Pay is one issue. The other is a wave of looming retirements ….More than half of the BLM’s petroleum engineers across the country will be eligible for retirement in 2017, according to that same report. It’s a similar situation at the state level. And finding replacements for those retirees will be a challenge.
Take Evan Lowry. He’s a young petroleum engineering student at the University of Wyoming, and was recently visiting the hot springs in nearby Saratoga. He struck up a conversation with a stranger, who happened to be a petroleum engineer for the Department of Interior. A recruiting effort ensued.
Lowry: He was getting close to retirement and he was talking about how they were looking for younger engineers.”
Joyce: And what were some of his selling points?
Lowry: Mainly benefits, was the main thing he emphasized as being the nice thing about working for the government.”
Unfortunately, that’s not a huge selling point for 20-somethings like Lowry.
“The money is more motivating at this point. And he did mention that the industry does pay better.”
Local universities are graduating more petroleum engineers these days. After the bust of the 1980s, many programs shut down and for decades, universities graduated very few. Then, fracking happened.
“We started with 40 undergrads in 2006. Now we have more than 300.”
Vladimir Alvarado is the associate department head for petroleum engineering at the University of Wyoming. He says the problem is no one is steering all those newly-minted engineers towards regulatory jobs. The university doesn’t even have a course geared towards would-be regulators.
“We do tell them that permitting is one of the big deals in industry. But we always think that somebody else is going to do it, not themselves.”
And until those somebody elses are offered salaries closer to that of industry, there’s not a lot of incentive. But there needs to be if there are going to BE enough regulators to keep the boom booming...