There’s a question that we get a lot here at Inside Energy. It boils down to this: “Is a petroleum engineering degree a good idea?”
It’s a fair question. On one hand, as oil prices fall, people lose their jobs. We continue to cover the fallout from falling oil prices. On the other hand, we’ve also shown that there’s a shortage of petroleum engineers to fill some jobs – like regulators and professors. What’s really going on?
First, we can look at the recent history of oil prices and jobs in the oil industry. Oil prices reached a major peak in 1981, a trough in 1998 and another peak in 2008.
Average Monthly Imported Crude Oil Price
Speaking loosely, employment in oil and gas tracks with this. However, employment changes are more gradual and lag behind changes in oil prices. That’s because hiring and firing people takes a while, and companies don’t make personnel decisions with the instantaneousness of oil price changes.
Total Employment in the Oil & Gas Industry in the U.S. (Thousands of Jobs)
Next, we can look at some forecasts from the Bureau of Labor Statistics. In its profile of petroleum engineering, the BLS says it expects the number of employed petroleum engineers to grow by 10 percent by 2024, from its level in 2014. That’s faster than the average predicted growth for all employment – 7 percent – and even faster than the average predicted growth for all engineering jobs – just 4 percent growth by 2024.
BLS data also shows that petroleum engineers are making better money than many of their counterparts. For the most recent data, May 2015, petroleum engineers made more than all other kinds of engineers working in oil and gas.
And what about those shortages in government and education? It turns out that for petroleum engineers, working in the oil and gas industry is much more lucrative than working in as a regulator or a teacher.
The oil and gas industry also has its own predictions of how many petroleum engineers it will need in the future. The American Petroleum Institute expects that by 2035, the industry will employ almost double the number of petroleum engineers in the workforce as of 2015. That amounts to about 30,000 new jobs.
Plus, the industry also expects many current petroleum engineers will retire in the next decade. That means that in addition to the baseline job growth, there could be more than 7,000 additional jobs the industry will need to fill.
Professor Mohan Kelkar, chair of petroleum engineering at the University of Tulsa, says that fluctuations in the oil market will cause pain during times of low oil prices. But he says that rising energy demands in countries like China and India mean that the industry will need petroleum engineers for a long time to come.
He says students considering a career in petroleum engineering should imagine their degree as similar to a high-risk stock.
“Think of petroleum engineering as a career where you’re taking a risk,” he says, “but the rewards are greater.”