A lack of skilled manpower, fewer educational opportunities and the increasingly poor image of the oil and gas industry continue to discourage potential job seekers, and it is past time for the producers, educators, associations and state governments to step forward to help build a better image, energy professionals told the Texas Railroad Commission on Wednesday.

At its annual day-long State of the Oil and Gas Industry session in Austin, the commissioners listened to producers, association spokespeople and educational experts discuss how to solve one of the biggest problems facing not only Texas, but the rest of the oil and gas producing regions as well — lack of personnel.

“Our reluctance to accept responsibility in recruiting new talent is socially irresponsible, morally unacceptable and contradictory to what I know we all stand for, which is to be a major leader in American industry,” testified Mark Baxter, director of the Maguire Energy Institute at Southern Methodist University (SMU) in Dallas.

“If Texas is to achieve the economic growth that you and all of us hope for, it is essential that we achieve a higher level of awareness on the shortage of resources we are presently having and will further experience in the future,” said Baxter. “I’m not only referring to our natural resources located thousands of feet below the surface, but also the ones standing before us who are preparing to go to our universities, yearning to learn, but are uninspired to be a part of this industry.”

Baxter said there are many who are “in fear of our industry, the fear of an industry that asks for commitments but not loyalty, the fear that long-term job security is probably not in their future if they select this industry, the fear of co-workers who may be going to jail, the fear of becoming a part of that which gets associated with monopolies, environmental pollution, explosions, price fixing and draining life-long pension funds.” He added that young people’s lack of “pursuing a career in the energy sector is a testament that perception has become reality.”

The SMU director does not believe the industry’s manpower shortage is the future, “I say a tight market is here today, and our actions are nurturing a further breach of the talent pool for the future. We are our own worst enemies, and the test of time will not stand our failure to act on these major shortcomings.”

Tod Bryant, communications manager of the Interstate Oil and Gas Compact Commission based in Oklahoma City, presented preliminary recommendations by the commission’s blue ribbon task force of petroleum professionals.

“First, investment in new infrastructure, refineries and other critical facilities for delivery of energy to the global economy has dropped significantly,” said Bryant. “This dramatic slowdown in investment has caused a large reduction in the excess delivery capacity that the industry traditionally had maintained.”

The IOGCC official added that “proprietary research and development (R&D) by the major operating companies was reduced dramatically as part of the austerity mind set that major producers were forced to adopt” following the “oil shocks” of the 1970s and 1980s.

“Third, dramatic changes in employment demographics of the energy industry” then emerged. After hiring “aggressively” from 1974 to 1983, there were huge layoffs in the mid-1980s, and “those who stayed…have witnessed a seemingly unending process of layoffs, reorganizations, mergers and consolidation. The ‘survivors’ who are a large part of the current employment base…are now approaching retirement.”

The petroleum task force, said Bryant, is recommending that the solution to the “challenges” “requires a national effort” in three areas:

A final report, said Bryant, will be completed by May 2003. Before then, the IOGCC plans to promote a conference to discuss the problem and solutions from the “perspective of key exploration, production and service companies and leaders from the trade organizations.” It also plans to establish an electronic career resource center.

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