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In the midst of reports of new oil and gas discoveries, mergers or acquisitions, and changes in company leadership, it is not uncommon to hear grumblings from some in the industry about the perceived lack of cooperation with the current administration or concern about regulatory uncertainties.

By the nature of my work, I typically hear more from one side than the other. And it is understandable that the regulatory process can sometimes feel burdensome, although few can legitimately argue against its need, considering safety is of utmost importance to the industry.

But the words coming from a government official speaking at OTC 2013 were refreshing. Sally Jewell, the recently appointed secretary of the US Department of the Interior, said she met with some industry CEOs at the conference May 9. Her main message to the executives, she said, was that everyone needed to work together and not be at odds with each other.

“We want to listen to the needs of industry. We want to bring in the best available science. We want to work with academia. We don’t want to be in the way of development, but we have a job to do, which is to protect the assets of the American people,” Jewell said during a press conference. “I did poke them a little bit about not throwing the regulators under the bus or blaming us when there is actually shared responsibility, perhaps, when something doesn’t move forward.”

I couldn’t agree more with the fact that there is shared responsibility – responsibility on the part of the government not to make regulations burdensome but to understand the inner workings of the industry so it can provide the proper checks. Likewise, industry also has a job to do in complying with regulations and doing whatever it can to improve the process. Both sides can do so without losing sight of their overall missions or goals, which – of course – vary. Herein, the challenge lies.

As a former petroleum engineer who once worked for Mobil Oil, Jewell knows about life in the oil patch. She knows about working in permafrost and knows about the need for insulation when running hot oil through cold pipes. She knows her way around a rig. And, she can see that although the equipment has gotten bigger and more sophisticated, when it comes down to it, the “principles are still the same.”

Jewell could be just what the industry needs to continue strengthening the relationship between the government and industry. She wants agencies regulating the industry to “do the best job that we can so that we are staying up on the latest technology and not making regulations burdensome but making regulations align with what is expected of us as the overseer of these assets that are owned by the American people,” she said.

The importance of having a trusting relationship and having face-to-face contact, even going “off the record,” were part of the conversation, Jewell said, before turning to the response of executives in the meeting. “I have not sensed from any of the executives that I met with a reluctance to embrace regulation. What they want and what we are committed to providing is regulatory certainty, predictability, and consistency, recognizing that different circumstances warrant different ways of behaving.”

Since the Deepwater Horizon accident, I have seen increased communication and collaboration between the two. Others have, too, as associations like the American Petroleum Institute and the Center for Offshore Safety create best practices and safety policies that are picked up by agencies such as the US Bureau of Safety and Environmental Enforcement.

Randall Luthi, president of the National Ocean Industries Association, said, “I think the regulators have a much better understanding of what is expected, and industry has a much better understanding of what the federal regulators are looking for. This is being done through increased communication.”

“I cannot underline the importance of the ability for industry and the regulators to communicate,” Luthi said during a breakfast session at OTC 2013. “The federal agency can only regulate the industry well if it understands that industry well.”

It appears that the relationship has improved, despite occasional quips or complaints some may hear. Tragedy, as it does in many situations, has brought the industry and the government closer together – like it or not. And this, I believe, will make both stronger and better.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

Reliant Park has again been transformed into a haven showcasing the latest and greatest in the world of offshore technology as OTC 2013 returned to Houston.

As a first-timer to this massive conference, billed as the industry’s largest, I was warned to wear comfortable shoes and be prepared for a deluge of offerings as well as human traffic jams along the corridors of Reliant Center. The advice was well worth heeding as I learned that OTC 2013 is just as the picture painted by those who attended before.

More than 80,000 people from countries across the world flowed into Houston taking in knowledge and gaining insight into technology, drilling, E&P, and regulation among other areas. It’s a chance to see the equipment that you read or write about up close and to hear from the leaders and other professionals who keep the industry running.

Rigs, top drives, pipeline equipment, pressure pumpers, seismic equipment, and wellheads were just a few of the items featured in displays outside. Step inside on the exhibit floor, and participants found even more. Name a company with dealings in the industry, and chances are highly likely it has a booth at OTC.

The event truly has something for everyone, including a chance to check out a Grand Prix race car or dine at The Waffle Bus. Need a guide to help sort through the lengthy schedule of events? OTC has an app for that.

The four-day event ends May 9, when those in attendance have a chance to learn more about:

• Oil and gas opportunities in Myanmar’s Bay of Bengal. Myanmar government officials and representatives from the offshore industry are set to discuss E&P challenges and opportunities in Myanmar and the country’s role as a regional gas exporter;
• The latest on the Bureau of Safety and Environmental Enforcement (BESE) policies and Safety and Environmental Management Systems (SEMS) from James Watson, director of BSEE;
• More on SEMS when Charlie Williams, executive director for the Center for Offshore Safety, speaks during a breakfast added to the day’s lineup; and
• Lessons learned from the Deepwater Horizon incident. Christopher Smith of the US Department of Fossil Energy is scheduled to give an update, according to the OTC website.

The conference also will offer technical sessions on topics that include advances in riser technology and offshore mooring systems, subsea systems technology, offshore heavy lifting operations, HP/HT, and innovations in ROV/AUV technology.

OTC provides a wealth of information, and it is well worth attending for anyone looking to gain insight into the offshore industry.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

The move to open the US Atlantic Outer Continental Shelf (OCS) to oil and gas drilling is gaining momentum.

The latest action comes from Scott Rigall (R-Virginia), who on April 26 filed a bill that would require the federal government to hold a lease sale offshore Virginia and include the area in the five-year oil and gas leasing program.

After the US government receives its share of new leasing revenue, the bill would allocate 37.5% of revenue – derived from not only from oil and gas exploration, development, and production but also wind, tidal, and other forms of energy – to effected Mid-Atlantic states within 322 km (200 miles) of the leased tract. These states include Delaware, North Carolina, Maryland, and Virginia.

The bill also contains a section that would prohibit activity that conflicts with any military operation. There have been some concerns from the US Department of Defense in this regard.

Rigall’s bill comes after other efforts, including a similar one by South Carolina Congressman Jeff Duncan, who introduced a bill in February that would add South Carolina to the five-year offshore E&P plan, and a Feb. 14, 2013, letter written jointly by governors Pat McCrory (North Carolina), Nikki Haley (South Carolina), and Robert F. McDonnell (Virginia) urging US Interior Secretary Sally Jewell to support Atlantic OCS energy production.

“Safely developing our natural resources not only creates jobs, but is also a step toward reaching the goal of North American energy independence,” Duncan said in a news release. “Developing our resources along the coast can help make South Carolina a model for an all-the-above approach to energy.”

He referenced a 2009 study commissioned by the American Petroleum Institute that revealed there could be an estimated 3.5 Tcf of gas offshore South Carolina.

Operators should be given a chance to responsibly tap these resources. It would be another step toward helping the US become less dependent on others for energy. It also would add to bountiful shale gas supplies, possibly boosting the nation’s chances of becoming a future major energy supplier for foreign markets.

In addition, opening the Atlantic to drilling could create thousands of jobs.

It appears that the current administration may be open to considering the possibility. The Department of the Interior is already updating outdated information on the Atlantic, hoping to gain insight to make better informed decisions about the area’s future.

But the effort is facing some opposition.

In a blog post April 20, the three-year anniversary of the Deepwater Horizon accident, Southern Alliance for Clean Energy’s Chris Carnevale called drilling off the southeast Atlantic coast a bad idea. His reasons included that the use of seismic airgun testing would result in the death or injury of up to 138,500 marine mammals by 2020, offshore drilling would not lower gasoline prices, and jobs created “would represent a direct threat to our bread-and-butter industries of tourism and fishing.”

Both sides can argue the pros and cons of the issue. However, coexistence remains necessary. As long as drilling is done responsibly and safely with needed regulatory checks and public scrutiny in place, it is possible to continue exploring for and producing the hydrocarbons that everyone presently relies on without severely harming industries and the environment.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

Too often we hear about the need for more people to enter the energy industry as older workers retire, taking experience and talent with them.

Filling the pipeline with future workers will call for attracting younger generations. And steering them into the desired direction will take a hands-on approach. By exposing students to the industry, serving as role models and teaching business and leadership skills among others, the industry may be able to win the hearts and minds of young people. This can be accomplished by establishing programs that connect students with energy employees.

BP is among the companies that appear to have mastered this concept. The company’s Schools Link program brings BP staff into schools where they meet with students, lead activities, and become mentors. Employees armed with educational resources target students between the ages of 5 and 19. Their focus is on science, technology, engineering, and math (STEM) as well as business, leadership, and employability skills, according to BP’s website.

The program, which is one of several that aims to inspire young people, isn’t new. It’s been around since 1968, according to the company’s website. But the program’s content is kept fresh. It’ll take years, or decades in some instances, to determine whether the efforts successfully develop talent.

A video featuring the program highlighted one employee’s involvement with the program. Brian McLeon, operations manager for North Sea operations, returned to his alma mater in Aberdeen to work with students there. Based on the video, which is on BP’s website, students appear well receptive to the field and at least one student is sold on the idea of a career in energy. “I’d like to do his job,” a teen said in the video, referring to McLeon’s work overseeing three fields.

Others doing their part to encourage young people include ExxonMobil, the founding sponsor of the National Math and Science Initiative that strives to better prepare not only students but also teachers in STEM areas. Educational resources on Anadarko’s website feature the adventures of Energenie, an animated character who teaches kids about oil and gas and offers science experiments, and a resource guide to energy education and careers.

These are just two examples. Many companies are working to educate young people, especially in the STEM areas. For those that don’t have such programs, it’s time – actually past time – to jump aboard.

For smaller companies with smaller budgets, efforts don’t have to be massive with hundreds of employees volunteering time with multiple school districts. The task could involve a handful, or so, of employees, more if there is interest, volunteering at the school nearest to their workplace, participating in a school’s career day, or taking part in a national organization that focuses on workforce readiness.

If everyone took this approach, there would be no doubt about whether industry is reaching younger generations. That stated, it still will be up to them to take what is being offered and use that knowledge when choosing a career.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

The US has been moving oil out of the Arctic region since the Trans-Alaska Pipeline System was completed in 1977. Both the US and Canada have done extensive offshore drilling in the Arctic. Even with that experience, there is wisdom in having the willpower to show restraint.

Recent actions by the US government and major companies seeking oil and gas pay in the Alaskan Arctic showed that voyages are proving to be more of a marathon instead of a sprint with plenty of breaks in between.

So far, Shell, Statoil, and ConocoPhillips have temporarily halted plans to drill in the Alaskan Arctic. Their actions come amid regulations from government officials, who have identified principles and prerequisites for safe offshore drilling in an effort to avoid any accidents and negative impacts on the area’s fragile ecosystem.

The Exxon Valdez oil spill showed how much damage can be done when something goes wrong in an ice-free environment. That spill occurred in Prince Rupert Sound, which is a long way from where the new drilling projects will be operating in ice-filled waters. The federal government is being extremely cautious as it enforces rules and encourages companies to work together to create an Arctic-specific model for offshore exploration, covering drilling and maritime safety as well as emergency response equipment.

The industry, in turn, has responded positively as they stop plans to make sure operations are up to par or pause “given the uncertainties of evolving federal regulatory requirements and operational permitting standards.”

ConocoPhillips has agreed to work with others in the industry and the government to develop the Arctic-specific model for offshore oil and gas operations. And some companies, including Shell, are learning from past mistakes and improving plans. In response to the Kulluk drilling ship running aground, Shell Upstream Americas Director Marvin Odum said in the company’s sustainability report that “Certainly we will identify and understand the ‘how’ and ‘why’ of all aspects of the incident, and use the lessons learned to improve our operations in the future.”

As those involved and others know, the stakes are high in the Arctic. The payoff can be high, considering about 22% of the world’s undiscovered conventional oil and gas could be in the Arctic. But the risks also are high.

The Arctic’s harsh conditions, including shifting sea ice and icepacks, can impede E&P or shipping operations. Moreover, the fact that drilling locations are long distances away from the coast also could hamper response and restoration efforts. Companies’ drilling plans must take these, among a slew of other challenges and obstacles, into consideration.

Shell calls its plans, which have been approved by US federal government agencies, “unprecedented.”

Plans include use of BOPs to seal off wells, with capping stacks modeled after the one that stopped the blowout of the Macondo well in the Gulf of Mexico. Shell also has buried pipelines several meters below the seabed to avoid potential damage from floating ice. Detection systems also monitor any drop in pressure, activating valve systems to halt oil flow, according to the company’s website.

The company also will have an onsite, a near-shore, and an onshore oilfield response system that is Arctic built.

After learning that Statoil and ConocoPhillips decided to shelve their Arctic drilling plans, Greenpeace International Arctic campaigner Ben Ayliffe called the decisions “an admission that the oil industry is still not capable of meeting the enormous challenges posed by operating in the world’s most extreme environment.”

On the contrary, the industry has shown that it is capable of operating in the Arctic. Shell has been operating offshore Alaska for decades, having safely drilled many wells in the Beaufort and Chukchi seas during the 1980s. Statoil also has extensive operations with decades of experience in Arctic areas.

So history has shown that drilling can be done safely in the Arctic region.

But the increased scrutiny by the government and groups like Greenpeace is a good thing. Odum had a good response when he addressed the attention by environmental groups, saying, “Close scrutiny of our industry helps raise broader public awareness of the energy and environmental dilemmas the world faces. It can help shape government policies for the better, and it can help raise operational standards across the board.”

I agree with those words, and so far, it has proven to be true in the Gulf of Mexico, and hopefully, will do the same in the Arctic.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

Oil and gas companies operating in Texas might want to put more thought into ways to reduce water usage in their operations.

Lawmakers are pondering a bill that would charge a per-barrel fee for wastewater disposed of in commercial injection wells. If approved, the bill – proposed by Rep. Lon Burnam (D-Fort Worth) – would become effective Sept. 1, 2013.

There were about 290 MMbbl of waste injected per month into all commercial disposal wells statewide in fiscal year 2010, the most recent year for which data were complete, according to the Texas Railroad Commission. If the bill becomes law, fees collected could generate about US $34.8 million in revenue, which would go to the state’s Oil and Gas Regulation and Cleanup account. However, a limit on the account’s fund balance would impact exactly how much goes into the account.

“This penny-a-gallon fee is not enough to cover the difference between recycling and not recycling from [fracturing], but it does put a thumb slightly on the scale,” Conor Kenny, chief of staff for Burnam, told Houston Chronicle’s FuelFix. “Every time someone writes this check, it forces them to think about how they could have used a less-water-intensive method of [fracturing] or how they could have recycled it and used it again.”

Although this bill would add regulation and bring in money, the effort appears well-intentioned if the primary goal is to promote water recycling. The proposal puts emphasis on the need to conserve water and highlights the importance of water management.

Even though it does not cost operators in Texas as much as it does in other states to dispose of wastewater using injection wells, recycling fracture water reduces the need to purchase more water. It also lowers costs associated with hauling wastewater. These were among the points mentioned by OriginOil executives who recently stopped in the Houston area to showcase the company’s oil and gas fracture water-cleaning system.

Water recycling is good news for companies like OriginOil, Resirkulere, and Halliburton, all of which have various systems and processes that clean fracture flowback water enabling it to be recycled. These water management efforts should be commended. Now, it is up to oil and gas companies to weigh the benefits of such offerings to their operations.

As of April 8, 2013, the bill was pending in the House Energy Resources Committee.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

The good news keeps coming in the Eagle Ford. The latest headline says the shale development generated more than US $61 billion in revenue for South Texas in 2012.

The figure comes from a study released March 26 by the University of Texas at San Antonio’s Center for Community and Business Research. The study, which examined the 14 oil and natural gas-producing counties in the Eagle Ford as well as six surrounding counties, also predicted the development will generate $89 billion and 127,000 jobs for the 20-county region by 2022.

This is something in which the oil and gas industry can take pride. The number of jobs in Bexar County alone skyrocketed from less than 5,000 in 2011 to more than 20,000 today, according to the study.

During a time when the US economy continues to rebound, this shale play has done more than its share to breathe life into what once was a relatively sleepy part of Texas. But nowadays there is lots of action. Horizontal drilling and hydraulic fracturing paved the way for abundant supplies of energy resources, creating a ripple effect.

More resources meant more support services; more logistics infrastructure; and more people in need of housing, food, and recreational activities.

And the ability of operators in the Eagle Ford to increase shale oil production when commodity prices worked against gas producers showcased the shale play’s versatility, making it even more attractive.

A few highlights from the study show the shale development:
• Generated 116,508 full-time jobs across the 20-county region in 2012;
• Added more than $1 billion in total local revenue in 2012;
• Provided $1.2 billion in estimated state revenue in 2012; and
• Created roughly $3.3 billion in salaries and benefits paid to workers.

“In 2008, we saw very little activity in the Eagle Ford shale. Today, it has become one of the most significant oil and gas plays in the country and has generated a tremendous amount of wealth for Texas,” Thomas Tunstall, director of the UTSA Center for Business and Community Research, and the study’s principal investigator, said in a news release about the study. “Over the next 10 years, the annual revenue generated and jobs created will continue the steady progress upward, helping to ensure environmental and economic goals can be realized together. The goal is to create sustainable growth for the region.”

The study predicted revenues will continue to increase. “Based on a moderate scenario, the total output for the 14-county area is $61.1 billion with a gross regional product of $32.9 billion. 89,803 jobs will be supported with a total payroll of over $4.6 billion. In 2022, government revenues will be increased to an estimated $1.8 million locally and over $1.9 billion at the state level, including severance taxes close to $971 million.”

While this is indeed something to be grateful for, the development also has brought some growing pains. These have included, among other things, tattered roads and the need for more public involvement, including environmental regulation officers and emergency response workers.

Those directly and indirectly involved in the shale play should use this study to facilitate better planning in response to the anticipated continued growth.

“The research conducted at UTSA provides us with valuable information, findings and recommendations related to the Eagle Ford shale and its impact on Texas’ economy,” said Senator Judith Zaffirini, D-Laredo. “This research is a wonderful resource not only for state policymakers and business leaders, but also for all stakeholders who are working to create sustainable communities throughout the shale region.”

Contact the author, Velda Addison, at vaddison@hartenergy.com.

The deep waters of the US Gulf of Mexico (GoM) have been good to oil and gas companies lately.
 
Anadarko Petroleum Corp. hit 305 m (1,000 ft) net of oil pay in the GoM earlier this month in what some believe could be a multibillion find and double the Shenandoah basin’s resource potential.
 
Chevron Corp. announced March 25 that it discovered oil at the Coronado prospect in deepwater GoM. The Walker Ridge Block 98 No. 1 well encountered more than 122 m (400 ft) of net pay.
 
The discoveries came the same month that more than 50 companies submitted just more than 400 bids on 320 tracts offshore Louisiana, Mississippi, and Alabama. The central GoM lease sale drew US $1.6 billion in bids.
 
The news is further proof that activity in the GoM has been resurrected as companies – including foreign companies like Statoil – step up interest in what remains a bountiful energy haven for North America. The GoM is indeed one of the country’s “crown jewels” as Secretary of the Interior Ken Salazar described it.
 
The GoM’s federal offshore oil production makes up 23% of the total US crude oil production and accounts for 7% of the country’s natural gas dry production, according to data published in 2012 by the US Energy Information Administration.
 
But the US could add more crown jewels to its treasure chest by opening more land offshore to responsible oil and drilling efforts. The federal government appears to have interest in taking such steps, considering its efforts to learn more about the potential in the Atlantic Ocean.
 
Currently, the government is gathering geological information that Salazar said will allow the agency to update stale information on the Atlantic. Although the area is not included in the 2012-17 oil and gas leasing plan, he said “it is our view, the president’s view, and my view, that we ought to go ahead and develop additional information so we can make informed decisions about the future.”
 
Data on the Atlantic is about 30 years old, according to Acting Assistant Secretary for Land and Minerals Management and Bureau of Ocean Energy Management Director Tommy Beaudreau. During opening remarks for the March 20 lease sale, he spoke briefly about having a strategy for the Atlantic. The first step is to develop information about the resource potential, which is under way, keeping in mind other existing uses for the area, specifically military use.
 
Nonetheless, the administration’s effort is a step in the right direction for the industry. Central and western GoM and southern California have extensive production histories. But more opportunity could lie in other areas of the US Outer Continental Shelf.
 
Getting updated geological information will be beneficial in assessing the Atlantic’s resource potential. Adding another crown jewel to US oil and gas coffers would be a good thing.
 
Contact the author, Velda Addison, at vaddison@hartenergy.com.

Five hours and about 7,400 km (4,598 miles) separate Houston from Aberdeen, Scotland, UK, but that didn’t stop the two cities with established oil and gas sectors from coming together to expand their knowledge and develop business relationships.
 
As part of the inaugural Aberdeen-Houston Gateway on March 19, two venues – one in Houston and the other in Aberdeen – were linked via videoconferencing, allowing business professionals to communicate during breakfast in Houston and lunch in Aberdeen. The transatlantic event provided a platform for a range of speakers to tout the offerings of both cities, while highlighting some of the challenges and opportunities in the energy field as well as how the two areas could work together to create or improve operations.
 
“One of the key components of change in the North American market that I think brings a high degree of opportunity for the relationship with Aberdeen and for the broader market into Europe is the advent of unconventional drilling here in the United States,” said Varel CEO Jim Nixon. “Those shales have been exploited to dramatically increase the volume of energy being produced here in the United States. It’s not uncommon here in the United States to drill 15,000 ft (4,572 m) measured depth wells with 4,000-ft (1,219-m) laterals or horizontal segments and to do that in between 12 and 15 days.”
 
Calling the feat a “stunning achievement,” Nixon said a relationship with Houston could help establish Aberdeen as the UK entry point to unconventional drilling. However, any action would be dependent on government and environmental concerns.
 
Ian Kirk, managing director of Downhole Products in Aberdeen, pointed out that the UK probably won’t get that opportunity anytime soon, considering Cuadrilla Resources – the only company in the UK known to be exploring shale – announced last week it was delaying drilling until 2014 at the earliest due to environmental impact issues.

However, he said that technology is the most important thing to help Europe stay in the energy game.
 
For Rod Christie, CEO and vice president of subsea systems for GE Oil & Gas, keeping the pipeline filled with qualified workers will be a challenge. “Over the next 10 years, there is a substantial talent gap that is going to occur,” adding that it will be a challenge to sustain business without new people entering the industry.
 
Growth in the industry today has driven more demand into the company, its supply base, and its partnerships with universities for R&D, he said. The industry should think about what is needed to help sustain business. “Bringing more people into the industry is going to be critical for us in the future.”
 
Attracting people not only to the industry, but also to the cities in which energy companies operate was also a focus of the event. The quality of life offerings of both Aberdeen and Houston were showcased in two videos, and government officials spoke about energy.
 
“Houston and Aberdeen together are two of the world’s leading centers for energy. For some, the world of energy brings to mind quite simply oil and gas. But as those in the audience know well, it really encompasses far more,” said Houston City Councilman Stephen Costello. “Energy certainly includes oil and gas communities. But it is also methods used to locate resources, advanced engineering and construction to access those resources, the know-how and strategy to move it, trade it and sell it, the legal expertise to defend it, the sense of obligation and responsibility to mitigate environmental cause, and the passion to reinvest it in society.”
 
The business and cultural links between the two cities are long served, and still have potential, said Granite PR managing director Brett Jackson, who conceptualized and organized the event. With growing opportunities brought on by renewable and the unconventional oil and gas sector, he said there has never been a better time to revisit potential business between Aberdeen and Houston.
 
Contact the author, Velda Addison, at vaddison@hartenergy.com.

As the energy business continues to boom worldwide, the industry continues to face the challenge of finding qualified workers.

From the surge of shale-fueled activity in the US to the LNG-sparked construction boon in Australia, the need for skilled labor is great and the competition for workers remains fierce with companies poaching from one another as the pickings get slimmer.

The issue was discussed March 6 by a group of panelists during IHS CERAWeek in Houston. The talk came as the industry braced for the anticipated loss of experienced workers as Baby Boomers move into retirement, leaving a huge gap that has been dubbed the Great Crew Change. Surya Rajan, director of upstream and global gas for IHS and panel chair, pointed out the reason for the fear: a large population of workers who are eligible for retirement, a new population that has little experience, and little in the middle.

Antonio Rostand, global managing director for Schlumberger Business Consulting, said there are about 8,900 open positions today. The figure includes a need for 2,200 geologists and 1,900 reservoir engineers. And the need is expected to be the greatest for the NOCs, which Rostand said have a 15% shortage, compared to 7% for independents, and 1% for the majors.

Rostand noted how some are comparing the situation to the Y2K phenomenon. Is it really just hype? Is everyone crying wolf? Could the problem fix itself?

Companies and associations have stepped up with plans for training and recruitment, including attracting younger generations to the fields of math and science. IHS is doing its part with the Haskayne/IHS global energy executive MBA program.

While it appears the industry is in agreement on the issue, current initiatives might not be sufficient.

The push shouldn’t start or stop at the college level. It should begin in elementary schools, as some of the panelists also pointed out. If steps aren’t taken, it’s a missed opportunity for the industry, which could lose potential employees to industries that are more attractive to children. The energy industry isn’t exactly eye candy for many kiddos when it comes to picking careers. Those accolades generally go to the medical, legal, sports, or entertainment industries. Idols nowadays are more likely to be Leonardo DiCaprio instead of Leonardo da Vinci.

Catch children at age 11 to study subjects such as math, physics and science, said Samir Brikho, chief executive of AMEC, who noted the falling numbers of engineering graduates in the UK. To attract talent today, companies should look in areas where the most desired academic degrees are coming from, not areas with the high populations.

Governments should also do their part to help attract talent. For example, in Australia, where there is $160 billion committed to construction through 2016, four-year visas are available for skilled labor, said Gary Cochrane, managing director of Resource Management International.

Rostand added local content should be looked as an opportunity, not a constraint, to create jobs, supply chains, and wealth in countries.

This challenge is not unique to the energy industry. Other industries are facing the same challenge. And that could mean more competition.

Sitting back and doing nothing to grow, attract, and retain qualified employees is akin to shooting yourself in the foot. The risk is great – delayed projects, abandoned projects, and possibly more accidents because of inexperienced or overworked employees.

A report released March 11 by OilCareers.com and Air Energi revealed “the shortage of skilled labor in the industry is a major consideration with far-reaching consequences for safety and security within the industry.” Of those surveyed in the report, Global Oil & Gas Workforce Survey: Expectations for hires and pay rates in the oil and gas industry (H1) 2013, about a third said the skills shortage is the biggest threat to the sector and the lack of skilled trainers was cited as a major training issue by more than 20%.

“The skills shortage is a major challenge the industry must overcome to continue to thrive,” Ian Langley, group executive chairman of Air Energi, said in the news release. “The shortage of subsea and LNG personnel is being felt throughout the industry with significant effect in terms of project costs and delays. It’s clear that without the right people on the ground we won’t get the reserves out of the ground.”

Now is the time for energy companies to become more proactive.

Contact the author, Velda Addison, vaddison@hartenergy.com.