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Oil & Gas - A Slap in the Face
creepycoug
Member Posts: 23,600
Chintresting article about diminishing employment opportunities in O&G.
@HoustonHusky and our other O&G OGs: too early to give up on a career looking for black gold, or not enough runway left to start a career now?
https://www.nytimes.com/2021/01/03/business/oil-industry-careers.html
@HoustonHusky and our other O&G OGs: too early to give up on a career looking for black gold, or not enough runway left to start a career now?
https://www.nytimes.com/2021/01/03/business/oil-industry-careers.html
Comments
Right now it is brutal on graduates...my nephew's fiance just graduated and got hired on at one of the big oil firms after college but almost all the folks hired on with her were delayed and then un-hired. At UT the Petroleum Engineers always had a bit more status than the Chemical Engineers but that has now switched...a bunch aren't going to get hired for what they were trained for. Add to that a bunch of the smaller oil guys are doing "mergers of equals" which is basically cost/people reductions and its not good out there for those folks.
But with oil it is always give it a year or two...all the banks are saying oil is going even higher this year, but the same analysts are also saying nobody will fund oil guys. Which is true right now if you talk to the banks, but if WTI goes over $60 and maybe even $55 you will see a flood of money go into the oil patch because interest rates are nothing.
Too old for that shit now.
I used to know a guy who butchered that and other colloquial phrases. Strangely, his version still kind of works.
Boom or bust is the story of oil
Tax code changes, oil goes bust taking Savings and Loans with them and McCain and the rest get the taint of scandal.
The next main tenant for the building was Asymetirix where I met the Paull Allen mob
Tech of course had its own boom and bust but Allen was a winner
Lot of VC went into edifices of nothingness
And Dallas is the best show ever
Also realize Oil and NG are very different...as EV cars push more into the mainstream that will dampen oil demand, but the electrical grid is a entirely different beast powered off of NG. With the variability of solar/wind until you have electrical storage in huge quantities to can't push much past 30-40% of your electrical generation to be based on those without making they system unstable (see California...).
And if the dollar craters both are going higher and you will see a new Dallas series popping up on Netflix...
Just kidding. Filth is good.
I also don't see oil going above $60-$65 in 2021 because too many producers (shale and OPEC+ cheats) will turn on the taps, thus keeping demand up rather than hurting it with higher prices.
Full Disclosure: I owned some XOM for a decade, sold last year to harvest the tax loss, and then rolled the cash plus some savings into CVX and TOT at their most recent bottoms. So I'm up nicely on the latter two but need more room to run to get into the black.
Also I would not recommend to a friend to start a career in oil now. Even with the chinevitable booms, overall the industry will continue to slim. The O&G workforce is saturated today and there will be very few careers in oil for kids born today.
A couple of years ago, I was on an interview team for bringing in new hires. Usually, I would favor younger people who could stick around a while and become useful. On that day, though, I actually found myself using family situation as a tiebreaker, favoring people with families, people a little closer to retirement. I don't expect to retire from my plant, let alone people hiring on now, so I figured we might as well give the job to those who could benefit from it the most while the gettin's still good. My coworkers used to call me Chicken Little when it came to that kind of attitude, but now they all see the writing on the wall and have joined in.
The major oil companies are no longer oil companies. They're "energy" companies, and oil isn't their best investment. Exxon, Shell, BP... they're all running away from oil fast. Even unsubsidized, the current lowest cost per installed kW of energy is terrestrial wind. Second is utility scale solar. Then offshore wind. Then natural gas.
I've seen my company's (well, "my company" at least for the next few months, as my understanding is that my refinery was just sold as part of a purge of downstream oil assets) future prospectus, and the plan is to ditch oil, with LNG (liquified natural gas, used a lot in Asian power plants) as the 50 year bridge fuel to going hydrocarbon free. They're investing heavily in wind.
There was a time when the EROEI (energy returned on energy invested) for oil extraction was a triple-digit number. Nowadays, many wells are single-digit. It's just not as profitable as extraction becomes more difficult.
On top of that, demand in the first world is dropping as vehicles become more efficient, and just about every meaningful market in the world has pledged to electrify their vehicle fleet to some degree (China being the most serious and most aggressive with the timeline) within the next decade or two. It's going to create some weird pricing structures for finished products. As it is, gasoline and diesel seem like a loss-leader for kerosene (jet fuel). Awfully hard to get a half-million pounds off the ground with anything less energy dense than a hydrocarbon fuel, and current batteries are certainly that: far less energy dense. I could see a situation where, just as electric cars are really taking off, the cost of gas drops back down to a buck per gallon. Refining isn't magic: you can't just make kerosene. There's going to be some amount of longer and shorter chain hydrocarbons that we'll have to find something to do with, and supply and demand could make said "waste" hydrocarbons awfully cheap. Or the cost to fly just gets prohibitively expensive.
Our refinery still makes money, so it's not going anywhere just yet. Others don't, like the Convent refinery in Louisiana that didn't sell and so was simply closed, leaving 700 jobless. Still, I give our plant maybe 10 years at most. We're already one refinery heavy in the region, from a supply/demand standpoint, which is depressing finished product pricing and therefore profit. Corners will be cut to maintain profitability, and that's dangerous.
That's what I got from the article. In some ways I think it will be a sad decline in that industry helps define culture, and O&G is its own culture and contributes to American culture. It's been an influencer.
And I'm telling you right now, I'm stealing your actual statement when this comes up:
Party Goer: "Look Creep, your friends on the Finance Board may like oil, but we've? got to stop releasing carbon emissions into the atmosphere, because global warming. Every mode of transportation needs to be battery."
Creep: "Listen asshole, it's awfully hard to get a half-million pounds off the ground with anything less energy dense than a hydrocarbon fuel, and current batteries are certainly that: far less energy dense. So fuck off until you have a better idea."
That's what I'm going to do. In real life.