Monday, June 9, 2014

NACE: petroleum engineers making average $95,000 starting salaries

21 comments:

  1. Back in the late 70s and early 80s petroleum engineers were very hot. Then the price of oil collapsed and many were laid-off. New students could not find jobs. The number of new grads significantly dropped and programs were closed around the country. Same thing happened to a generation of aerospace engineers in the late 60's and early 70's at the end of the space race. However, you have to pay the rent and PE's are currently making the big bucks. My advice is to save your money, live below your means and prepare for that rainy day that will surely come when you job is tied to commodity prices or government/political contracts. You probably will not get a gold watch if your fate ends up aping that of the prior hot generation of PEs.

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  2. So can we hold @anonymous to the prediction that oil prices will collapse? Whoop yeah!

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    1. It's not prices, it is production. Natural gas production has been flat for over two years, and even the optimistic estimates of production of oil predict it will reach the top of its current shoulder peak (the main peak was in the 70s) within a decade.

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    2. One way to think about this is that in the late 60’s gasoline ran about 30 cents a gallon in LA unless there were gasoline wars, a long forgotten benefit to consumers, in which case gasoline could be had for as little as 19 cents a gallon. My grandfather paid me about 60 cents an hour, the then minimum wage, for the jobs I did for him in the summer. I could buy around two gallons of gasoline for an hour's work. If you do the inflation-adjusted calculation for the 2014 price of gasoline, it would be about two dollars per gallon in 2014. However in 2014, regular gasoline is around four dollars a gallon, a real 100% inflation-adjusted increase. If I were working for the minimum wage today in my area, I would be pulling in over eight dollars per hour before taxes or enough money to buy those same two gallons of gasoline at today’s price of a little more than four dollars per gallon of regular gasoline at my local gas station. I have made no adjustments for tax increases on gasoline over the decades, but I will say I really felt the cost of the introduction of sales tax on gasoline in California in the early 70s which was in addition to the typical excise taxes already on oil products in that era.

      Back in the 60s I would put those two hard-earned gallons of gasoline - one hour of work remember - in my dad’s 445 Bonneville and cruise around LA for about 20-25 miles. Today I can put those same two gallons of gasoline into my wife’s fancy over-priced imported 4-WD SUV – AKA, a modern yacht-on-the-highway and go cruising down the road about 45-50 miles. So even though gasoline is 100% more expensive than it was in the 60’s, it is actually cheaper to take a drive down the road in a yacht in 2014 than it was in 1968.

      I live in Greenland, I mean the Bay Area, and the funniest thing I see every day, is a carpet of very expensive imported gas guzzling yachts with a single person on board going to and from work in stop and go traffic, and of course, those $130,000 electric pet rocks. Nothing has changed in my lifetime and gasoline is as cheap as ever which is why the yachts bounced back with a vengeance. Where are those 100 mpg single passenger commuter vehicles that seemed possible in the 70s? My $6,000 Honda CRX was half way there.

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    3. Where are those 100 mpg single passenger commuter vehicles that seemed possible in the 70s?

      Sitting in a CIA warehouse in Budapest, of course.

      NB for the literal-minded: I am kidding. I am not a conspiracy theorist.

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  3. http://www.cnn.com/2013/03/04/opinion/frum-peak-oil/

    "For all practical purposes, the world's supply of oil is not finite. It is more like a supermarket's supply of canned tomatoes. At any given moment, there may be a dozen cases in the store, but that inventory is constantly being replenished with the money the customers pay for the cans they remove, and the more tomatoes that customers buy, the bigger an inventory the store will carry."

    Hilarious, it almost seems that the GOP is proud of their ignorance.

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  4. It's like magic! More and more dinosaurs will keep dying in the past to refill the underground reservoirs, and it's not like we needed any of those coastal cities, anyway. It all works out in the end. {/lobotomy}

    The only glimmer of truth is that when the price of oil is high, people look for more oil and supplies that couldn't be removed cheaply at low prices make more sense to remove at high prices, so if there's more demand, people will find more supply. If there are lots of reserves we haven't found or haven't tapped, then the supply is going to be larger than we need. As the supply goes down, of course, the prices go up further, and well, someone makes lots of money.

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  5. I presume that Frum is referring to the latter explanation (i.e. high prices will enable/encourage more technological innovation) as opposed to the abiotic hypothesis, regarding petroleum.

    For what it is worth, I'm not really a peak oil guy.

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  6. Speaking of which:

    www.amazon.com/Out-Gas-The-Norton-Paperback/dp/0393326470/

    Kind of interesting explanation of how peak oil was determined. Outside of that, he recounts the early history of thermodynamics. I think when I lose my job I want to try to build a steam engine.

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  7. While sitting in gasoline lines back in 1973, I heard all these same end-of-cheap oil-era arguments, within a decade gasoline was less expensive than it was prior to 1973. If the price goes too high, huge new pools of hydrocarbons are found in places like Siberia, electric cars become commonplace or mandated, coal to oil becomes available on a huge scale or any number of unexpected technological events occur in the next 20 years, the price of oil will again drop. When and by how much is the only question.

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    1. Huh? Oil prices have been running at 3x their inflation-adjusted eighties to early aughts prices for nearly the last ten years. Natural gas prices in inflation-adjusted terms are around double as well. You have it entirely backwards - it is precisely these high prices which are making the deeper/dirtier/diluted resources financially viable. Fracking and its variants buy us about 20-30 years worth of resources depending on whose numbers you use. Whatever follows after will be even more expensive due to even worse issues with the three "D's" above.

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    2. During the Iranian crisis in the late 70s oil jumped to about $50 a barrel. By the early 80s it fell back to $20 a barrel. The majors shuttered marginal fields and then consolidated big time. Ultimately DuPont dumped Conaco because there was no money in the oil business or at least the margins sucked. Then things got a whole lot better for the majors. A couple years ago gasoline went to $5 a gallon then fell to under $3. The problem in the 80's was that oil prices stayed low for an extended time which pinched R&D/exploration budgets for a decade and that generation of PEs paid a price for that cheap oil. At some time in this era product out of Alaska started rolling into the oil market.

      You are correct, the price for oil and gasoline inflation adjusted is up since I paid as little as 19 cents a gallon back in 1968 when we were all driving yachts on the freeways. By the 70s we were all driving small cars that got good mileage per gallon. In the 80s I drove a Honda CRX which got 51 m/g on the highway. Here we are in 2014, and I am surrounded by yachts on the highway again. Somehow $4.50 per gallon does not seem as onerous as 70 cents per gallon did in 1979 when the end of cheap oil was at hand.

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    3. I assume some of the oil price (from Chemistry and the Economy) is due to money from quantitative stimulus flowing into commodities. If that goes away (seems like a big but, since there are is lots of political push for it to continue), then oil probably will not stay high. I'm not holding my breath, but CO2 taxes would probably put a crimp in oil prices as well (though they won't matter as much, since a greater part of gas prices will be taxes); if they're high enough, and if alternatives exist or are developed, people will use something else.

      Land yachts aren't as big as old ones, but I still can't figure the desire for them out; buying a diminishing asset that's almost half as expensive as my house and which has to be paid off in five years seems ungood. I'm shouldn't be giving financial advice, though.

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    4. "Land yachts aren't as big as old ones, but I still can't figure the desire for them out"

      Maybe not as big, but http://www.mbusa.com/mercedes/vehicles/model/class-E/model-E63SP#!layout=/vehicles/model/features&class=E&model=E63SP&waypoint=model-features is certainly a fast car, and I think it gets almost 15 MPG. Unsure how that compares to a 1972 Coupe de ville, but I'm sure we've made progress.

      Seems a no brainer as far as why one would want a station wagon with 577 hp, gotta beat the soccer moms to drop the kids off at preschool!

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    5. I tried to convince my mother to dump her gas guzzling Lexus in the name of global warming and to minimize support of the Missle East, and she can't do it.

      She needs to feel "secure" *sigh*

      Yup. My mother's emotional for a safe car needs trump the indirect support of Al-Qaeda.

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    6. If you've got a lot of money, it might make sense to get a big car, and they are better than they were, but they're still expensive, and expensive to fix as well. If I've got a couple of hundred K a year, then I guess $60K for a station wagon with oomph might be tolerable. Of course, it depends on the preschool; the dance class parking lot was filled with Honda Odysseys, which aren't the most efficient cars on the planet.

      Lexus has hybrids; they keep pushing them instead of diesel here (badly - almost every gas station where I live has diesel, and right now diesel is not much different than regular, so there's not much pain in having one, if you have a garage), and she could use one. If the extra money's not worth it to her, though, it won't help. (I am dismissing the "hybrid manufacture eats more CO2/oil than a big car uses in its lifetime" argument out of hand, but I could be wrong.)

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    7. "then I guess $60K for a station wagon with oomph"....60K ain't gonna get much of an E63---this is the AMG version.....

      At least better than coal powered cars.

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    8. Our latest car has lots of horsepower...stables not included.

      It's more reliable than a Dodge. though.

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  8. I don't imagine there's enough biotic production of oil to assume there won't be a peak oil moment; we just haven't gotten there yet. Of course, we also haven't figured out anything to replace oil and its derivatives as a liquid fuel, so there is a significant amount of demand that probably won't go away unless prices go up significantly more than they have.

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