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Energy Industries

A mixture of painful contraction and wide-open opportunity awaits energy engineers

By Nicholas Basta

Charles Dickens' line about "the best of times, the worst of times" could easily be used to describe energy engineering in 1998. The breadth of the field, running from oil and coal companies to high-tech manufacturers of photovoltaics and fuel cells, is experiencing a period of change and transition that savvy technical students can leverage. Remember, change creates opportunity.

Energy engineering is not so much a profession or even an industry as it is a combination of interests and technologies, all pointed at supplying fuel, heat and power, or making the best use of it. Dominating industries include the oil companies (primarily in oil production, refining and distribution), public and private utilities (electricity and gas) and those parts of the building industries that include heating, cooling, ventilating and power-distribution systems. The field also includes the specialists involved in energy conservation, the special environmental issues pertaining to power production and consumption, and the many governmental or quasi-governmental organizations involved in energy policy.

The energy field encompasses more types of engineers than it excludes: Petroleum and mining engineers get energy out of the ground. Chemical and mechanical engineers refine oil and process coal or gas. An entire subdivision of the electrical engineering profession (the largest discipline, both in number of students and number of working engineers) is devoted to power systems, and to the distribution and metering of power. Specialist engineers from a wide range of backgrounds manage conservation, pollution control and governmental regulation.

Employment opportunities in the energy field are driven by a shortage of experienced personnel in petroleum geology, petroleum and chemical engineers, which is raising costs for oil exploration projects worldwide and slowing down the pace of future development. The major oil companies have a budget of $16 billion for offshore projects alone; billions more will be spent for land-based exploration and production. In the U.S., rig counts—the measure of how many drilling crews are in the field—have gone up in the past year and a tightened supply of drilling personnel and equipment elevated prices during the latter half of 1997.

Oil company executives are positively bullish on the long-term prospects of their industry. "We have every reason to believe we stand on the threshold of a great expansion," said Ken Derr, CEO of Chevron Corp., during the World Petroleum Congress last fall. He cited statistics indicating that oil demand worldwide would grow from the current 70 million barrels/day to nearly 100 million by 2012.

Today's graduates might also expect that the recently concluded Kyoto negotiations regarding the regulation of global-warming gases will now set a new international order for energy technology. Most career counselors advise caution in this area. Even the strongest proponents of curbing greenhouse gas emissions (and the U.S. is not one of them) concede that reducing emissions will take years to accomplish. Still, global warming will remain on the energy agenda for the foreseeable future, and will put a special emphasis on new types of emissions controls, alternative and renewable fuels and conservation. Researchers (primarily doctoral-level engineers and scientists) are the immediate beneficiaries.


More imminent forces are at work in the utility industry. Deregulation, begun by the Reagan Administration and accelerated by technological developments that make the production and distribution of electricity easier and cheaper, is revolutionizing the industry. In the past, local utilities essentially had a monopoly on power supply and distribution. Now, utilities can sell power throughout regional and even national grids, allowing them to distribute power from where it is cheap or plentiful to where it is expensive or scarce.

This epochal development, in turn, is creating a need for a new type of utility manager: the marketer. Utilities are now scrambling to develop ways to sell their power and services to what had previously been a captive market. Moreover, a host of new independent power producers and others are now entering the competitive fray. An engineer with the technical background who also possesses management and marketing skills is in demand.

However, deregulation is also causing some unexpected fallout for thousands of utility plant managers, technical support and operations engineers. Consolidation is taking place among the utilities, as local companies join up to create regional powerhouses. Consolidation is also taking place among the utility suppliers, most notably Westinghouse Power Systems (a company that helped create today's power system). It was purchased by Siemens, a huge European conglomerate in power and electronics, for $1.5 billion this fall.

The consolidations are in turn leading to a slimming of utility payrolls. The Los Angeles Department of Water and Power (DWP) announced last October that it would be cutting 2,000 jobs from its work force and restructuring. "DWP cannot survive with a labor force of administrators, managers, engineers and consultants that far exceeds what is necessary to operate competitively and effectively," says David Freeman, general manager of the utility. "While this is a difficult message, layoffs are a critical component of the plan to make DWP competitive."

At the same time as such moves are taking place, however, new technology is creating new opportunities. Many are within utilities, but more are emerging from within new types of suppliers. A notable trend is the use of remote monitoring equipment to allow a small business or homeowner to collect energy usage data. The data can be used by the utility company to better match supply and demand, or to run equipment during the low-power-consumption periods (for instance, at night), while selling that power at a cheaper rate than during the high-consumption daytime or early evening. Technical professionals are needed to design and install such systems, as well as to perform analyses of collected data.


Besides the traditional skills that recruiters look for in engineering candidates—technical expertise, creativity, leadership—today's energy industry is more international than ever. The oil industry has had a tradition for years of sending its people abroad; most of the U.S. oil companies spend more of their exploration and production dollars overseas than domestically. Utilities, formerly entrenched as local enterprises, are seeing a new wave of internationalism. The North American Free Trade Agreement (NAFTA) is opening the doors for cross-border energy transfers. Much of the Northeast now gets power from Canada, and pipeline projects routinely snake across national borders. A familiarity with international customs and ways of doing business is a career plus.

Starting salaries in the energy industry reflect the range of professions and specializations that companies are seeking. Petroleum engineers occupy a spot at the top of the salary range, with average offers above $43,000, according to the National Association of Colleges and Employers, Bethlehem, Pa. They were followed closely by chemical engineers, whose offers average $42,800. Electrical and mechanical engineers range from the mid- to high $30,000s.

Nicholas Basta is Editorial Director at VerticalNet, Inc., an online business-to-business service. He has a lengthy background in technology writing and career development.

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