By Erin Ailworth
Walt Baker graduated from the Colorado School of Mines on Friday
with a bachelor's degree in petroleum engineering--but without an
oil-industry job.
His employment offers disappeared in December, following a
monthslong plunge in oil prices. That is a big disappointment for
Mr. Baker and his fellow students, who started their studies amid a
drilling boom that provided newly minted engineers with six-figure
salaries and signing bonuses.
"We all had the same expectation--we'll all truck through it and
then we're going to get the big payoff," said Mr. Baker, age 29,
who enrolled in his program in Golden, Colo., after seven years in
the U.S. Coast Guard. "Then the downturn happened."
The price of oil is down by more than 40% since June, closing
Friday at $59.39 a barrel. Employment at U.S. energy companies has
dropped by 6,800 jobs so far this year, according to federal data
released Friday, but jobs at energy-services companies have fallen
far more, by perhaps 30,000. Graves & Co., a Houston consulting
company, says energy employers have announced 120,000 layoffs
around the world.
So jobs are scarce for the nearly 1,800 students in the U.S.
expected to graduate this year with a bachelor's degree in
petroleum engineering.
This is the first major crude-price slump since hydraulic
fracturing helped revitalize the U.S. oil industry seven years ago,
allowing energy companies to pump oil from dense rock formations
cracked open with millions of gallons of water and tons of sand.
U.S. crude production jumped from 5 million barrels a day in 2008
to 9.2 million barrels a day in February.
Enrollment in undergraduate U.S. petroleum-engineering programs
followed, rocketing from 3,710 students in 2008 to almost 11,400
students this year, according to data collected by Lloyd Heinze, a
professor at Texas Tech University in Lubbock.
"There are too many students coming out looking for jobs," Mr.
Heinze said. More than three times as many students are graduating
with undergraduate petroleum-engineering degrees than in 2008, he
added.
Fears about having to replace retiring baby boomers have meant
that some companies are still recruiting, according to counselors
and professors at Texas A&M University, the University of
Oklahoma, and other schools.
But some seniors have had job offers rescinded, while
underclassmen are struggling to land internships.
At Texas A&M, senior Jennifer Wisler, a 21-year-old past
president of the student chapter of the Society of Petroleum
Engineers, said some nervous sophomores are looking to transfer
into mechanical engineering, while "I think the junior class is
freaking out."
Ms. Wisler, a fourth-generation petroleum engineer, is headed to
a job at Chevron Corp.
"Everyone is saying a silent prayer: If my job is still waiting
for me, I just have to get there and show them what I am worth,"
she said.
Those finding jobs are being offered lower salaries and taking
nonengineering positions to get a foot in the door, several
professors and counselors said.
"The concern, of course, is over the next year or so what the
job picture will be like," said Dan Hill, head of the
petroleum-engineering department at Texas A&M. "It's not
looking too optimistic."
But executives at independent oil producers like Pioneer Natural
Resources Co. and Carrizo Oil & Gas Inc. encouraged students to
stick it out--perhaps by working as a roughneck or getting a
master's degree in business.
"I'd like to see kids come out of school with some business
skills, project management," said Brad Fisher, chief operating
officer at Carrizo.
Mr. Baker, at the Colorado School of Mines, is taking that
advice. He has been accepted into the school's graduate petroleum
engineering program.
"I might as well double down," he said. "Who's the world to tell
me I can't go into oil and gas?"
Write to Erin Ailworth at Erin.Ailworth@wsj.com
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