Reflections on Working in the Weird World of the Energy Industry

For the first half of my life I never dreamed I would spend my career working in the energy industry. I would have considered the idea laughable.  Liberal tree-huggers like me don't work in businesses that support the mustache-twirling, money-grubbing, planet-killing oil companies of the world. I was supposed to work in some kind of hippie cooperative or non-profit.

My fate was sealed twenty-two years ago when I was working the front desk in a job I hated.  A headhunter called and asked to speak to our legal team.  When nobody was answering in that department, the woman came back to me and asked if I knew of anyone looking for a job.  I said I was unhappy in my position and was seeking employment elsewhere.  What kinds of positions was she looking to fill (other than legal ones)?  She mentioned a consulting firm to the oil and gas industry that had a couple of entry-level positions open.  She said they were a great company to work for and offered to set me up with interviews.  

If you know me, you know what happened next. I got a job in that company and loved it.  The headhunter was right about it being a good company to work for.  It had an enjoyable company culture and good benefits.  I worked for that company for thirteen years until it was acquired by a larger corporation and my position was eliminated.  I left that company with a particular set of skills, and specific industry knowledge, which made it difficult to find work in other fields, so I applied for a job with a competitor and was hired there. Thus nine years later I am still working in the energy industry.

I put myself into a strange position in life.  I am a political liberal working in an industry liberals hate.  I know more about the industry than your average layman, but it's difficult to communicate my knowledge to the wider world.  My politics kill my credibility with conservatives, and sometimes cause suspicion among other liberals (I can't be one of them if I am working in this industry).  

The truth about people who work in the energy sector is there is more diversity of thought than anyone on the outside expects.  I have worked with people of every political stripe.  In my last job the outspoken liberals outnumbered the outspoken conservatives.  In my current job there are no outspoken liberals and many outspoken conservatives (but there are also a few mild dissenters who whisper their opinions when management isn't around).  The energy industry has the same cynical bottom line as anyone else.  As a keynote speaker at a company-sponsored conference said it best, "We're not here to solve the world's energy crisis.  We're here to make money."  

There is no denying that, like it or not, the world runs on the machinations of the energy industry.  We need power plants.  To differing degrees we need fossil fuels.  Power companies, oil companies, and the banks that finance them are always going to place making money over solving the world's energy crisis or saving the planet from destruction - even if they know these issues are important.  

But don't assume they don't know these issues are important.  Energy companies may claim the world is safe and fuel is abundant in public, but behind closed doors, they know we're all screwed.  They simply want to take a big piece of the pie while there is still pie to be had.  

During my early years at my first job, oil prices were low and I had a new perspective on the power of energy prices.  End use consumers see cheap gasoline and heating oil.  Oil industry executives see destruction.  I can remember one analyst writing a report with the dramatic title, Is That Red Ink or Blood Covering the Oil Patch? Low crude and natural gas prices mean companies don't have as much to reinvest in their projects.  That affects the industry at every level.  Service companies struggle to find work.  Pipelines and refineries reduce their throughput.  Workers are laid off.

On the other hand, when prices were high, my employers were on top of the world.  I worked with analysts who justified the prices any way they could.  My first employer had analysts who wrote reports showing how cheap oil was compared to other consumer products?  Do you think $80/bbl is expensive?  Did you know Evian water is $500 per barrel?  

Friends and acquaintances expect me to have some deep insider knowledge and hope I can provide some comfort about the state of the world. There is limited information I can provide.  I learned in the early years how oil companies and the government play their cards close to the chest when it comes to both corporate strategy and energy policy.   Those of us who track the movements of the industry don't always know what's coming.  When George W. Bush was first elected, I had many clients asking me if our analysts knew anything about the new administration's energy policy.  Our team was unable to learn anything substantial.  I have had ecologically-minded friends ask me if I could let them know about early plans for arctic drilling before the leases were granted, which I don't know.  When gas prices were $4 per gallon during the Bush years, I always had friends ask me if I knew if and when they would ever go down.  It became a joke for friends to ask me about gas prices going down because they knew how much it annoyed me.  

One misperception that drove me crazy, and still drives me crazy, it how Americans seem to think the president of the United States is personally responsible for the price of gas.  

When gasoline prices were soaring in the early 21st century, opponents of George W. Bush claimed it was a plot hatched between him and Dick Cheney and their industry ties to artificially inflate prices.  Bush's proponents claimed it was Democrats in Congress raising taxes or else fighting the development of new energy sources such as deepwater drilling, Arctic drilling, and hydraulic fracturing.  

When prices went up again at the beginning of Obama's second term, I remember how my Facebook feed was filled with angry conservatives claiming Obama was the reason for the high prices and that we needed a new president right away.  One of the main reasons why prices were high in the early 2010s was the Arab Spring.  In fact, globally its governments who own and control much of the world's oil supply, and no one leader can magically make oil prices rise or fall.  Global events of all kinds - from politics to weather - will affect prices for everyone around the world.  Americans like to think they are the only people paying higher energy prices when prices go up.  Most of the time we are not alone.

When prices dropped dramatically in 2014, once again it was all about global machinations.  The United States benefitted from the fracking boom.  What seemed like a gift to the country (although not to the planet) turned out to be a disaster for the industry.  OPEC countries do not want the United States to become energy independent.  As we began to produce more natural gas domestically, Saudi Arabia began fixing crude prices absurdly low.  It became cheaper and more cost effective to buy foreign oil than it was to keep investing in hydraulic fracturing.  Ordinary Americans rejoiced at the low gas prices.  Unfortunately, the boom went bust, drilling in the major shale plays slowed down, and the regions surrounding the shale formations became ghost towns.  

Remember the election of 2008?  Sarah Palin, governor of a major oil-producing state, declared, "Drill Baby Drill."  Americans, dreaming of cheap gasoline, agreed with her.  Why not drill offshore?  I laughed at the magical thinking of anyone who thought offshore drilling would magically and automatically give this country an endless supply of cheap oil.  The government has to hold bidding rounds.  Licenses have to be granted.  Oil companies have to gather their seismic data and do their exploratory drilling.  Dry holes will happen.  Oil needs to be transported and refined.  Then it needs to be shipped again.  Once the leases are granted there might be some lower costs in the futures market, but it could be a couple of years before you saw any real savings at the pump.  Besides, there are offshore platforms that have their own storage facilities.  Oil companies can hold onto that oil they drill offshore until prices go up again.  They might even need to hold that oil offshore if the refineries on the Gulf Coast don't have the capacity to handle what is coming in from offshore platforms.

The Deepwater Horizon blowout managed to sour a few Americans on offshore drilling.  Nobody likes to see beach closures, human casualties, and dead wildlife due to massive oil spills.  It's a pity it took a disaster and not logic and industry knowledge to make Americans realize we need to seek better forms of energy.

When Trump took office many of the analysts I work with were excited.  This was going to be a new era for the oil industry.  Our sales team used Trump's election as a way to sell the product.  This was supposed to be an exciting time for oil companies.  Plus Trump was promising to jump start the coal industry.  This was supposed to be the best time to buy my company's products and take advantage of all the new opportunities as the money would come pouring in.

Did the Trump administration benefit the oil industry that much?  Average crude prices rose in 2017 and 2018, but then dropped again in 2019.  None of this was by huge amounts.  They dropped even more in 2020, but who knows what would have happened if there hadn't been a pandemic?  2021 brought a huge increase in prices over the winter.  There was a conservative knee-jerk response to blame it on the presidency of Joe Biden, but a better explanation was the winter storms and resulting power outages in Texas brought both production and refining operations to a halt.

The election of Joe Biden is causing more excitement in the industry than I expected.  There are many companies that want to invest in renewable technologies.  They know climate change and carbon emissions are an issue, even if they don't admit it to the general public.  I talk to executives at ExxonMobil (one of the biggest public climate change deniers and most resistant to alternative fuels) who are interested and excited in new investments.  Oil companies are using renewable energy to run their production and transportation operations (and that seems bizarre to me).  Foreign companies are itching to invest in the United States now that there are plans to expand into alternative energy sources.  Coal miners (who were already being replaced by automation) are more than willing to retrain to work in alternative energy jobs (it worked in Germany).  

The world is changing.  It's possible the United States could be changing along with it.  Can this momentum last?  Joe Biden isn't guaranteed more than four years.  If he isn't re-elected will everything revert, or will we continue to pursue sustainable energy?  

This is one thing I love about my job.  I talk to industry experts all the time.  I see what experts think outside of politics.  I talk to executives from some of the biggest oil companies and power companies in the world.  I see what they care about and what they are excited about.  I see the new developments on the horizon.  I don't get predictions on exactly when and where companies will drill, but I do see companies suffer the consequences of bad choices and learn their lessons.  I don't know what gas prices will be next week, but I do know more than your average layman about why they are what they are now so I can shut down the ignoramuses who want to make it about US politics.

The world relies on the energy industry and will continue to do so.  Having a job in this sector means my employment is far more secure than it would be in industries that fluctuate with the economy (such as luxury goods), or have become obsolete (such as photo labs).  It's true the industry is always changing.  New technologies disrupt the sector as much as they disrupt any sector.  Renewables are taking over fossil fuels (or so we hope) but I work for companies that track and measure these trends.  I may make only a tiny fraction of what major oil company or power company executives make, but they pay my company to help them stay in business, and my company pays me to help them use my company's services.  

Every once in a while I feel restless and start pursuing job listings in other industry.  I say I'm tired of the energy industry.  Writing this post made me feel more positive about it.  I am in an industry that drives the motor of the world.  It's a fascinating place to be.