US shale magnate Harold Hamm is leading attempts to lure an increasingly sceptical younger generation to the oil and gas industry as climate concerns and job insecurity dent the attractiveness of the industry for graduates and skilled tradespeople.
“We are going to be using oil for the next 50 years and ‘clean burning’ natural gas probably for the next 100 or 150 years . . . we want to get the next generation of gamechangers involved,” said the businessman, who recently donated $50mn to establish the Hamm Institute for American Energy at Oklahoma State University.
The 78-year-old pioneered a two decades-long shale revolution that has transformed the US into the world’s biggest oil and gas producer.
But, as the world reached an agreement to “transition away from fossil fuels” at the UN COP28 climate conference in December, he and other industry leaders have turned their attention to addressing a fall in applicants for petroleum engineering and related courses in the US and Europe.
The Hamm Institute is one of a growing number of initiatives aiming to dispel negative perceptions of the industry. In 2022, ExxonMobil donated $16.4mn to universities and colleges worldwide and Chevron has helped establish a jobs readiness programme in the US called SkillsReady to prepare and attract workers to the oil and gas sectors.
Oil majors Shell and BP offer scholarships and apprenticeship programmes to lure more young people to the sector. Shell has also led efforts on platforms popular among young people such as TikTok and Twitch to promote their traditional products.
But they face a formidable challenge. Undergraduate enrolment in a survey of mainly US petroleum engineering courses has fallen from 7,046 in 2019 to 3,911 last year, according to a study by Lloyd Heinze, emeritus professor at Texas Tech University. Some colleges in the US and Europe have dropped oil and gas focused courses from their curriculums while others are restructuring courses to include green energy.
Heightened public concerns about climate change are causing a backlash against the oil and gas industries on some campuses, particularly in Europe. In November, Swansea became the seventh UK university to ban fossil fuel companies from advertising to students at career fairs.
Worldwide membership of the Society of Petroleum Engineers, an industry group, fell from 168,125 in 2015 to 119,120 in 2022, while the average age of professional members has increased to 48 years, up from 45 years over the same period.
“[Students have] been told for a very long time that oil and gas is going away and they’re concerned about having long-term careers,” said Jennifer Miskimins, head of petroleum engineering at Colorado School of Mines.
She said the skills shortage was already having an impact and some companies have told the school that they were not hitting “hiring targets”.
Concerns about skills shortages are occurring against the backdrop of record production and a mergers and acquisitions boom in the US, where companies forecast robust fossil fuels demand for decades. Some experts predict businesses will need to overhaul recruitment models if they are to continue to pump oil and pursue new opportunities, such as carbon capture and storage.
High oil prices, such as those in 2022 when crude peaked at more than $130 per barrel, typically lead to a spurt of enrolment for US-based petroleum engineering courses, according to Heinze, who surveys petroleum engineering registrations at US schools. But there was a “decoupling” between oil prices and enrolment last year, he said.
“Up until the last five years, enrolment very closely lagged oil prices. Right now, [with] climate change, what’s going on with fossil fuels, that’s become a bigger and bigger influence,” he added.
Skilled trades people, such as welders, rig workers and heavy equipment operators that are essential to keeping oil and gas flowing, are also in short supply.
Mike Rowe, who runs a vocational education foundation, says for decades society has persistently downgraded non-graduate level education.
“You’ve got a whole generation of kids who don’t believe you can make six figures, working with your hands . . . but this isn’t true. My foundation has trained maybe 700 welders and most of them make six figures.”
The skills shortage is a global problem. In the UK, where Prime Minister Rishi Sunak recently announced that licensing rounds to exploit dwindling oil reserves in the North Sea would become annual, there are concerns over shortages in drilling and geoscience as well as for trades such as welders.
“You will not run out of oil, you’ll run out of people to run the assets to produce the oil,” said Ken Pereira, managing director of Hibiscus Petroleum, a…
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