For years, all you hear is that the energy industry is looking for good men and women. The need is dire; the industry is on fire, and a lot of older workers are about to ride off into the sunset. So, you do the work necessary to get the degree and the knowledge necessary for a high-paying job in the oil and gas industry … and then what happens? Just as graduation looms, and that first lucrative O&G job draws ever so near, the bloom is off the proverbial rose. What gives?
It’s understandable if the slide in crude oil prices seen in recent months has not only shaken up those in the oil and gas industry, but also you future energy industry workers currently ensconced within the ivy towers of academic institutions. You’ve been longing for a chance to make a difference … while also pocketing some long green. And just when it’s your chance to step up to the plate, the market begins to misfire. But are your concerns about your career choice warranted, or are you getting bent out of shape over nothing?
Admittedly, the slump in crude oil prices seemingly caught a number of energy companies off-guard, prompting some layoffs scheduled for the new year as many, if not most, exploration and production companies cut back on capital expenses. That’s not surprising, given what happened to crude oil prices in the second-half of 2014. To put things into perspective, when the U.S. benchmark price for crude oil settled at $53.61 a barrel on December 29, the settlement was 2 cents a barrel less than one-half the 2014 peak settlement price of $107.26 a barrel set back on June 20. So, it’s not just that prices have fallen, it’s that they have fallen so far and so fast, and no one knows where the bottom of the market is.
As for those of you who were hoping for jobs in positions where hiring has slowed, remember that it’s not forever. It was unreasonable to thank that crude oil prices would always remain over $100/barrel. That is particularly true given the prodigious rate at which production levels have been rising, even as global demand has slowed amid lower-than-expected growth in China and the slow pace of economic recovery in Europe. According to the Energy Information Administration (EIA), proved reserves of U.S. crude oil and lease condensate increased for the fifth year in a row in 2013, surpassing 36 billion barrels, making it the first time since 1975 that crude oil reserves have been that high.
In the meantime, perhaps there is a local community college, junior college or university offering courses that could enhance your chances of getting hired when the market picks up. The number of courses available has increased substantially, and some classes even use actual rigs for training purposes. There are also classes available on interviewing for a job, classes on writing a resume, and even a class that deals with, among other things, how to manage all that money you are going to earn.
Again, the oil and gas market is cyclical, and downturns have historically been followed by strong rebounds. Eventually, demand will catch up with supply, or production will be cut and supply will tighten. Before you know it, prices will be back up again. And that room in the man camp in some shale formation will still be there.
By: Gene Lockard