Barnett Shale Drillers Work Overtime to Recruit College Graduates

By Jim Fuquay, Fort Worth Star-Telegram, Texas

Jun. 23–Isaac Hayes was still in high school the first time he met a production supervisor for Devon Energy, who suggested that the youngster’s interest in math and science could find a match in the oil and gas business.

Now just a year away from his petroleum engineering degree at Texas A&M University, Hayes, of Justin, is in his third internship with Oklahoma City-based Devon, the biggest producer in the Barnett Shale and, not surprisingly, Hayes’ first choice as a future employer.

That kind of recruiting is about what it takes to snag a new petroleum engineer or geologist in the booming energy business these days. As demand for workers in the energy industry grows, companies are going to new lengths to attract workers into training programs and internships. Schools, too, are stepping up to link students to jobs.

Hayes was one of 125 interns that Devon took on a two-day field trip of its Barnett Shale activities this month — a tour that included lengthy presentations by company President John Richels.

“It used to be that your junior year is when you got an internship. Now they’re in place before Christmas your freshman year,” said Rodney Waller, director of corporate development at Fort Worth-based Range Resources. “They’ll have three internships before they graduate.”

Field personnel, needed to operate wells once they’re drilled, are likewise in demand.

The need for trained workers led Devon and two of its contractors to make a $40,250 grant to Tarrant County College’s new roustabout program, which aims to produce entry-level workers capable of setting up and operating equipment at a producing gas site.

Suffice it to say that energy companies are hiring up a storm.

Chesapeake Energy, for example, has been so active in recent years that 40 percent of the work force at its Oklahoma City headquarters is younger than 30, said Cathy Curtis, senior employment adviser at the company.

Energy Transfer Partners, one of the biggest pipeline operators in the Barnett Shale, no longer waits for new graduates of Oklahoma State University’s pipeline instrumentation and mechanics program.

“We pay their tuition and give students a summer job,” said Mike Howard, chief operating office of Energy Transfer’s pipeline operations. “We can’t get enough of those guys.”

Likewise, the 14 students in TCC’s three-week roustabout program have their tuition paid by the companies, which get first crack at hiring the graduates. The school worked with Devon production supervisor George Jackson to design the program, which began last week, and the grant is enough to train 11 more workers in the next class.

Vincent Perry, 20, said the skills he’s learning are new to him. They include pipe fitting, connecting instruments and installing production equipment at a well site. He called the program “the start of a new and better career.”

“The gas should be around a long time, so I should have a place to work for a long time,” he said.

Elsewhere, Texas State Technical College reports that it can place with employers — in the Oil Patch and elsewhere — all the welders it can move through its programs.

“We have 100 percent placement” of certified welders coming out of the school’s program, said Jeff Gillum, vice president of Waco-based TSTC’s corporate college. “There’s a lot of push to get that oil and gas out of the ground right now,” he said. “It’s a supply-and-demand issue.”

Salaries reflect the surge. Take new welders.

“It would not be unusual to start at $65,000 or $70,000 a year, and that’s just the base wage,” Gillum said.

Graduates of the TCC program should draw annual pay of $40,000 to $50,000, said Curtis Wells, a project manager in TCC’s corporate services division, which provides customized training for employers.

Asked whether that would be a step up from his previous work in auto detailing, roustabout student Freddy Thomas replied, “That’s a leap, not a step.” Thomas, 35, is moving from East Texas to Fort Worth to participate in the program.

Moving up the food chain, geologists and geophysicists with less than two years of experience averaged $82,800, up 27 percent from five years earlier, according to a 2008 salary survey by the American Association of Petroleum Geologists. Overall, geoscientists reported a 9.5 percent pay raise for the past year and a 35 percent increase the past three years, the group said.

Among U.S. petroleum engineers, the average salary for all experience levels rose about 8 percent last year to $133,900, according to the latest survey by the Society of Petroleum Engineers. Additional compensation from bonuses, vehicle allowances and other perks pushed the overall average to nearly $188,000.

At Texas A&M, petroleum engineering graduates with bachelor’s degrees received starting salaries averaging $78,000, the school reported.

“Virtually all our graduates are getting jobs,” said Stephen Holditch, head of A&M’s department of petroleum engineering. That included just over 100 graduates of all degree types, a figure that Holditch expects to grow to about 150 next year.

This year the school had 455 undergraduates in the petroleum engineering program, the most since 1985-86.

But 1986 was the year oil prices collapsed from about $40 a barrel in November 1985 to $10 by spring 1986. Enrollment in A&M’s undergraduate program had dropped to 162 by 1990. As recently as 2001, the program had fewer than 200 undergraduates.

“Ten or 15 years ago, a lot of parents in the industry were discouraging their children” from going into the energy business, Holditch said. “That’s totally reversed today.”

That period of low enrollments, however, has left the industry with a giant hole in its work force. There is a pronounced lack of workers in their 30s and 40s, while many in their 50s are near retirement.

“By 2010 there will be a 38 percent shortage of engineers and geoscientists and a 28 percent shortage of instrumentation and field workers,” said Jill McMillan of Crosstex Energy Services, a Dallas-based natural gas pipeline and processing company. The industry’s cycles of boom and bust since the 1980s led to the loss of more than 1 million jobs, she said.

“Now you’re looking for those midlevel managers,” McMillan said.

There’s little the industry can do to create experience where none exists, but companies are cutting turnover with improved pay and benefits. Crosstex has a mentoring program, McMillan said, to help bridge the gap between older hands and new hires.

TCC also wants to continue to develop its oil-field training beyond roustabouts. “The big plan is for a comprehensive program” that includes offerings for oil-field mechanics, electricians and other skills, Wells said.

Rosa Navajar, president of the Fort Worth Hispanic Chamber of Commerce, which is administering the program, said the roustabout program “is only the beginning.”

The organization intends to visit the larger players in the Barnett Shale, she said, “find out what they’re looking for” and continue to add programs to fill those needs.

About the program Tarrant County College’s roustabout program is administered by the Hispanic Chamber of Commerce. To apply, contact Victor Garcia at 817-625-5411.

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