The newly discovered abundance of domestic oil and gas is creating a shortage of something else: the petroleum engineers who regulate drilling activities. Those engineers 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 these days there just aren’t enough regulators to go around.
That’s true at the Wyoming’s Oil and Gas Conservation Commission. As of the beginning of May, the Commission was down to just two petroleum engineers — Mark Watson, the Oil and Gas Supervisor, and one with less than a year of experience. The search for another three is not going well.
“I just interviewed a girl who just graduated from the University of Wyoming,” Watson says. “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.”
That’s right: the state’s top oil and gas regulator makes less than a recent college graduate working in industry. 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 meanwhile, 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. Petroleum engineers who want to be regulators though are few and far between.
“When [industry is] busy, we’re busy, and we’re competing for a limited source of skills and knowledge,” explains Michael Madrid, fluid minerals chief for the Bureau of Land Management in Wyoming.
He oversees hiring of the petroleum engineers who regulate drilling on federal land and he says being short-staffed on the regulatory side is bad for everyone. “The work will eventually get done,” Madrid says, “but there’s long, significant delays if we’re short-handed.”
The BLM in Wyoming is actually mostly staffed at the moment, but there’s concern about the future, and not just in Wyoming. A recent report by the Government Accountability Office says BLM offices nationwide are facing staff shortages and hanging on to people is a challenge when they can walk across the street and get a job that pays twice as much.
“[We] don’t have a good track record of retaining them,” Madrid says. “And it hurts when you’ve got someone who’s finally got four or five years of experience — who finally gets it, if you will — and then they leave.”
Pay is just part of the problem. The other part is a looming wave of retirements. More than half of BLM petroleum engineers in the country will be eligible for retirement in 2017, and it’s a similar situation at the state level. 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 when he struck up a conversation with a stranger, who happened to be a imminently-retiring petroleum engineer for the Department of Interior. A recruiting effort ensued, with a key selling point: benefits. Unfortunately, that’s not a huge draw for 20-somethings like Lowry.
“The money is more motivating at this point,” Lowry says. “And he did mention that the industry does pay better..”
Still, 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.
Vladimir Alvarado, associate department head for petroleum engineering at the University of Wyoming says his department started with 40 undergrads in 2006, which has grown to more than 300 today. But 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,” Alvarado says. “But we always think that somebody else is going to do it, not themselves.”
Of course, until those would-be regulators 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.