Oil boom spurs a rush on extractive education programs

by Jeremy Miller

Last May, Russell Carr crammed his possessions into his 4Runner and drove 30 hours to North Dakota, seeking a new start.

The strapping 22-year-old had just earned a degree in civil engineering at the University of Nevada, in his hometown, Reno, but the local firm he'd been courting offered a starting wage of only $17 per hour. "They gave me a speech about the economy being difficult. I felt undervalued."

Carr wanted to stay, but jobs were scarce. He began working nights on a road crew, collecting heavy concrete samples under halogen lamps at the outskirts of town for later lab testing. On a whim, he submitted an application for a master's through University of North Dakota's geological engineering program.

Assistant UND professor Lance Yarbrough called him back. "He told me about all the opportunities," says Carr, the new high-paying jobs on the oil-soaked prairie. In a few weeks, Carr headed north.

In November, the International Energy Agency predicted that by 2020, the U.S. will become the world's largest producer of crude oil, thanks mostly to the Bakken shale in western North Dakota's Williston Basin, along with advances in drilling techniques that allow oil to be siphoned from hard-to-reach deposits.

This energy rush -- also in the Northeast's Marcellus shale and Colorado and Wyoming's Niobrara shale, among others -- has flooded classrooms with new students. According to the American Society for Engineering Education, between 2002 and 2011, undergraduate enrollment in petroleum engineering increased nearly 250 percent, from 1,491 to 5,102. The number of master's degrees conferred also more than doubled, from 181 to 382. (Though other engineering fields have many more students, none has seen so sharp a rise.) The influx comes at a critical time for industry: A recent survey from oil field services giant Schlumberger predicts that over 20,000 senior geoscientists and engineers will leave the industry by 2015. Meanwhile, a bachelor's in petroleum engineering brings an average starting salary of just over $80,000 per year -- the single most "profitable" U.S. undergraduate degree, according to Forbes.

So-called oil technology programs at state and community colleges and private technical schools -- offering associate degrees and certificates in rig operation, well servicing and other fields -- are filling up, too.

The stream of students has drawn a surge of industry and federal funding. In September, Schlumberger gave the South Dakota School of Mines geology department $49 million to integrate the company's oil exploration software into its curriculum. (A month earlier, Schlumberger awarded the University of Arizona a similar $12 million grant.) The University of Wyoming is constructing a sleek energy engineering building with $25 million in industry and public funds, while the Colorado School of Mines just opened a $25 million petroleum engineering building funded by a who's who of petrochemical companies, including ConocoPhillips, Chevron, Hess and Encana.

In Farmington, N.M., BP and the Merrion Oil and Gas Foundation gave San Juan College $5 million to build an oil-training facility. Last January, the Colorado Online Energy Training Consortium, a coalition of 15 community colleges and private companies, received a $2 million Department of Labor grant to expand gas and oil programs, bolstering the agency's 2011 $17 million investment in improving energy training. Utah's Uintah Basin Applied Technology College is now an "energy academy," and its Vernal and Roosevelt programs have largely replaced on-the-job training for companies  such as Halliburton and Newfield Exploration.

To understand the impacts of this infusion of students and cash, I set out to visit the University of North Dakota and Williston State College.

UND's Grand Forks campus hugs northeastern North Dakota's state line. I arrive just after Veterans Day, with temperatures in the single digits and a winter sky so pale the main quad's white water tower nearly vanishes into it. A triceratops skull squats in the Leonard Geology building's foyer, and flasks of oil samples line a long glass cabinet. "BAKKEN" reads one typewritten card beside a sample the color of strong English tea. Outside the administrative office, a flat-screen next to a fading geological timeline announces: WELCOME TO THE HAROLD HAMM SCHOOL OF GEOLOGY AND GEOLOGICAL ENGINEERING.

Hamm is the nation's 35th wealthiest man, according to Forbes. His company, Continental Resources Inc. -- widely credited with starting the Williston Basin rush -- has grand plans here. Continental's engineers believe the Bakken may hold more than 20 billion barrels of recoverable oil, nearly five times the standard estimate.

Hamm recently backed that vision with cash, donating $10 million to UND's geology department. The state's Industrial Commission Oil and Gas Program matched that with $4 million from oil taxes and royalties. Roughly 80 percent of Hamm's gift will be used for two endowed professorships, in petroleum geology and engineering. The rest will fund scholarships and the digitization of UND's vast collection of geological core samples.

Hamm believes in training local engineers and workers, explains UND's Yarbrough, a stocky man with a pencil goatee and a wisp of thinning hair. Behind him hangs a black-and-white portrait of North Dakota's first state geologist, famed paleontologist A.G. Leonard -- a reminder that fossils, rather than fossil fuels, were once the school's main focus. Yarbrough says that undergraduate enrollment in petroleum engineering at UND is up tenfold, from around 10 in 2011 to 105 in 2012, with roughly 70 percent from North Dakota and surrounding states.

Others have traveled farther. Iranian Ph.D. candidate Hadi Jabbari was accepted to prestigious programs at Texas A&M and Penn State, but chose UND in 2009 because research funding had not declined here as elsewhere. Only after arriving did he realize the importance of unconventional oil plays like the Bakken -- which often are deep underground and require hydraulic fracturing and horizontal drilling to exploit. "Conventional oil (deposits are) past peak production. I knew this was going to be the future of the industry."

Jabbari and fellow Iranian Ph.D. candidate Mehdi Ostadhassan are developing software to enhance hydraulic fracturing and seismic imaging. Neither plans to stay in the oil patch after graduation in May. (Jabbari saw enough of that, working Persian Gulf oil platforms.) They hope to sell their work to companies and possibly join UND's faculty.

Though UND has not yet broken ground on its own high-tech energy facility, evidence of industry money permeates the old brick buildings. Yarbrough shows me a new "wired" classroom paid for by a local engineering firm. Denver-based Whiting Petroleum's logo hangs beside the door of another digital classroom. "Oil companies are eager to set us up with their software," says Yarbrough. "They really want our students to learn their systems."

We descend a staircase to a cluttered storage room. Rock fragments, dusty scales, goggles and cardboard boxes fill steel shelves. There, we find Carr, now comfortably settled after his first three months as a geological engineering master's student. From a foam-lined case, he carefully extracts what looks like a handheld retail barcode scanner. This X-ray fluorescence scanner –– purchased with UND's windfall –– can "read" a rock's elemental composition in seconds.

It's key to Carr's prospective master's project: the arduous task of digitizing the university's vast core-sample collection. Once that's done, industry engineers will no longer have to wrestle heavy lengths of rock from the shelves.

Still, research projects here face corporate obstacles rare in academia. Both Ostadhassan and Jabbari, who work at UND's quasi-public Energy and Environmental Research Center, were forced to sign confidentiality agreements. The center has a trove of industry data that would benefit Jabbari's fracking research, but much of it has been withheld, deemed proprietary. "It's been a big hurdle."

Unlike UND's Grand Forks campus, which is in the oil boom's orbit but out of its chaos, Williston State College sits squarely at its heart. On the frigid November morning I visit, gas flares flicker like bright banners from the snowy prairie. In Williston, a town of 15,000 turned petro-barony, oil tankers back up at stoplights. A digital sign above a spartan-looking motel flashes: LIVE HERE FOR LESS! $699 A WEEK. The college's Petroleum Safety and Technology Center is located in a prefab warehouse amid a vast industrial complex operated by Halliburton and other energy companies.

It's commonly said here that oil companies are so desperate for workers they'll hire anyone capable of completing an application. But the six students in Williston State's lease operator program -- which is teaching them to "monitor, troubleshoot, and operate oil and natural gas wells" in exchange for around $10,000 in tuition, books and room and board -- hint that technical training is now essential to employment. Today, they pore over electrical schematics, then use an array of circuits and switches on an oil-pump simulator to balance the level of fluid pouring into a small tank.

Nicholas Attigah, clad in safety glasses, is Senegalese; he came here from Atlanta in 2007. Unable to find work with an oil company, he took a staff job at one of the dozens of man camps, complexes of prefab huts and trailers built to handle the influx of workers. Attigah sees this program as the first step towards becoming a petroleum engineer. "I'm not going to leave North Dakota. I'm going to go all the way through, right here."

"Oil and gas is probably the fastest-growing industry in the U.S. right now," says Ed Spencer, who left a paralegal job in Boston to come here. "The opportunity is there." Spencer says he has already been offered a job but is committed to finishing the program.  Meanwhile, to get by, he works nights at the local Walmart.

Austin Nielsen, 18, agrees. He grew up in nearby Tioga, where his father supervises a natural gas plant. "I'm going to start here and hopefully work my way up, the way he did."

In large part, industry is pushing prospective hires into the classroom. The North Dakota boom has been hampered by a tremendous attrition rate, says lease operator program director Billy Giles. He saw the same thing in Texas, where oil companies tapped him to design similar courses. "(They) went to the colleges and said, 'Look. We're hiring a hundred people off the street. We're investing tens of thousands of dollars in each, and after a year we have 20 left.' "

According to executive search company Boyden, hiring, attrition and coping with poorly trained, inexperienced personnel costs oil companies worldwide between $32 billion and $45 billion a year.  In response, they've begun to subcontract training to places like Williston State. Prospective employees also benefit, insists Giles. Although his students now pay for training they'd once have been paid to receive, it eases the way to high-paying jobs. "We became a boot camp. If somebody could survive our two-year program, they were on the fast track to a supervisory or administrative position with an oil or gas company." In Texas, he adds, it was common for students to have multiple offers before their sophomore year.

After the school announced the Williston program in early 2012, it received over 200 applications, staggering for a first-year program. But that's hard to reconcile with the mere handful of students in class. Giles says the extreme climate and cost of living -- the college has limited dorm space and rent in town can exceed $2,000 per month for a studio -- explain the scant enrollment.

Those factors also discourage some qualified teachers. "We'll pay an adjunct $1,600 for a semester course. They can make that in a day of consulting," Giles says. In November, Williston State and four other North Dakota colleges will share a $14.6 million Labor Department grant to expand energy programs. Williston plans to hire additional staff and support more students. Bismarck State College wants to streamline certification through its online petroleum production curriculum -- sidestepping some costs of running a physical school.

The immediate future appears promising for soon-to-be-grads, especially in the Bakken. But though the number of oil and gas jobs has climbed steadily since 2004 -- topping out at 195,500 last August -- it's still a far cry from the early 1980s, when there were over 265,000 positions nationwide, until an oil glut crashed prices and caused massive job losses. "I see this as a good investment. We're trying to set ourselves up for jobs that can last for decades, depending on how long this plays out," says Spencer. "We'll see."

Back at UND, I ask Russell Carr if he thinks the U.S. oil boom will last long enough for students pursuing advanced degrees to be rewarded for their educational investment. "It's the Wild West out there. I think you'll be able to make a lot of money for quite a while," he replies.

But even though Carr has enjoyed his first few months at UND, he's keeping his own options open -- including where he might go after graduation. The Bakken, he says, is a "rat race." But geological engineers are needed in fields far from the oil patch, he points out, smiling. "Alternative energy is also necessary."

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