U.S. Students Lose Enthusiasm for Petroleum Degrees

students

By Reuters 2015-10-04 19:08:50

Enrollment in U.S. petroleum engineering degree programs fell for the first time in 13 years this fall, as an oil industry slump makes college students wary of entering the boom and bust world of oil and gas.

The drop, revealed this week in annual data provided by the country's 21 petroleum engineering departments, is modest - the number of enrollments dipped just one percent from a record high of 11,332 hit last year when oil was around $100 a barrel.

With oil now at around $45, the 21 departments estimated that enrollments would fall by a further seven percent next year.

Coming after years of steep gains, that could mark the start of a long slide similar to one that followed a price slump in the 1980s and continues to leave a hole in the industry's workforce, some department heads and industry experts said.

"The students who haven't made a long term commitment yet are making a change based on what they are seeing," said Lloyd Heinze, professor of petroleum engineering at Texas Tech University, who compiled the data.

Penn State University will graduate its largest petroleum engineering class ever next year, according to Turgay Ertekin, the head of the university's department of energy and mineral engineering. But enrollment this year dropped to 782 from 860, and the university estimates it will drop further to 565 in 2016.

"Petroleum engineering degrees will lose attractiveness in the years to come," Ertekin said. "Last time it lasted for 20 years," he said.

Past data shows it takes about two years for a dive in oil prices and a subsequent slowdown to discourage students in meaningful numbers. A quick rebound in prices could temper the enrollment drop.

Still, it is a worrying prospect for oil companies that have struggled with a graying workforce and skill shortages for much of the previous decade; many workers that joined in the early 1980s are now retiring.

In 1983, with U.S. oil fields gushing, 11,014 students enrolled in petroleum engineering programs, according to the Texas Tech data, but by 1990 the industry was in a slump and that number had dropped to 1,387.

Enrollments remained below 2,000 until 2005 when oil and gas companies began finding ways to extract significant amounts of oil and gas from shale rock deposits, paving the way to a drilling boom that had lasted well into last year.

Now there are signs of that cycle repeating itself.

The number of oil companies at job fairs fell this year, according to professors and students who attended such events.

Major oil companies, such as Chevron and ConocoPhillips have also cut the number of internships they offer and it has become harder to land interviews with prospective employers in the sector, students said.

ConocoPhillips acknowledged that it was being forced to adapt to the downturn, and that it was "actively evaluating" its various programs, but did not elaborate.

Chevron confirmed that it had cut the number of internships but said it continued hiring, including through campus outreach programs, and supporting engineering departments.

"While we will decrease our overall hiring numbers, this program is integral to our long-term success," Chevron spokeswoman Melissa Ritchie said via email.

"We have learned from previous experience that we need to maintain a certain threshold...to ensure we have the right skills to execute our long-term strategy."

Joseph Triepke, managing director of Oilpro.com, a job and networking website for oil professionals, said maintaining hiring was crucial. Lower recruitment now could hurt productivity in the future by causing labor constraints, talent shortages and project delays.

"The real concern is that when we recover, will we be able to grow to meet demand?" he said.

David Kong, 29, who enrolled in a graduate geology program at California State University in Bakersfield three years ago and completed an internship at Chevron this summer, is already considering other options.

Kong is thinking of using his undergraduate major in mechanical engineering to pursue a career in environmental regulation.

"I would advise joining students to be aware," Kong said. "These booms and busts happen often. You always have to watch out and have a plan B when oil prices drop."