Amid Boom, Regulators Struggle With Staffing

May 16, 2014

The newly discovered abundance of domestic oil and gas is creating a shortage of something else: the petroleum engineers who regulate drilling activities. Government petroleum engineers approve companies’ drilling plans and inspect wells after they’re completed to make sure they’re not at risk of contaminating water or blowing out, but as Wyoming Public Radio’s Stephanie Joyce reports, there just aren’t enough petroleum engineers to go around.  

STEPHANIE JOYCE: Mark Watson is Wyoming’s Oil and Gas Supervisor. He has a serious staffing problem on his hands.  The Oil and Gas Commission is down to just two petroleum engineers -- Watson and one with less than a year of experience. He’s in the process of trying to hire three more.

MARK WATSON: And I just interviewed a girl who just graduated from the University of Wyoming, and she was offered a job with a major company for $105,000. And I thought, ‘Ooof. You’re making $25,000 more than me and I have 30 years experience.'

JOYCE: You heard that right. The state’s top oil and gas regulator makes less than a recent college graduate working in industry. Watson says he’s lobbying for increased starting salaries, but it’s a long, bureaucratic process and he has people to hire in the meantime. That’s where problems arise. Domestic oil and gas production is skyrocketing but government regulators are increasingly hard to come by.

MICHAEL MADRID: When [the industry is] busy, we’re busy, and we’re competing for a limited source of skills and knowledge.

JOYCE: That’s Michael Madrid. He’s fluid minerals chief for the Bureau of Land Management in Wyoming, and oversees hiring of the petroleum engineers who regulate drilling on federal land in the state.  He says being short-staffed on the regulatory side is bad for everyone, including industry,since one of the engineers’ responsibilities is processing new drilling applications.

MADRID: The work will eventually get done, but there’s long, significant delays if we’re short-handed.

JOYCE: Right now, the BLM in Wyoming is actually mostly staffed. But there’s concern about the future, and not just in Wyoming.  A recent report by the Government Accountability Office says nationwide, BLM offices are facing staff shortages. Madrid says hanging on to people is a challenge when they can walk across the street and get a job that pays twice as much.

MADRID: Don’t have a good track record of retaining them, and it hurts when you've got someone who’s finally got four or five years of experience, who finally gets, if you will, and then they leave.”

JOYCE: Pay is one issue. The other is a wave of looming retirements. More than half of the BLM’s petroleum engineers across the country will be eligible for retirement in 2017. It’s a similar situation at the state level. And finding replacements for those retirees will be a challenge.

Take Evan Lowry. He's a young, clean-cut petroleum engineering student at the University of Wyoming. He was recently relaxing at the hot springs in nearby Saratoga and not thinking about his career when a stranger tried to recruit him. The man was a petroleum engineer for the Department of the Interior.

EVAN LOWRY: And he was getting close to retirement and he was talking about how they were looking for younger engineers.

JOYCE: And what were some of his selling points?

LOWRY: Mainly benefits, I think was the main thing that he emphasized about being the nice thing about working for the government.

JOYCE: Unfortunately, not a huge selling point for 20-somethings like Lowry.

LOWRY: The money is more motivating at this point. And he did mention that the industry does pay better.

JOYCE: That said, Lowry is just one of many petroleum engineers graduating today. Like many universities, the University of Wyoming shut down its petroleum engineering program after the bust of the 1980s. But then, fracking happened.

VLADIMIR ALVARDO: We started with 40 undergrads in 2006. Now we have more than 300.

JOYCE: That’s Vladimir Alvarado, the associate department head for petroleum engineering at the University of Wyoming. He says the problem is, no one is steering all those newly-minted engineers towards regulatory jobs.

ALVARDO: We do tell them that permitting is one of the big deals in industry. But we always think that somebody else is going to do it, not themselves [sic].

JOYCE: Without more incentives, that's not likely to change.