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Resurgent oil and gas industry keeps alums busy around the world

Oil rig at sunset

Illinois State alumni are riding the oil and gas boom.

Erin Roche and Drew Carlock can turn little rocks into big stories.

They’re geologists, trained to dig deep into the Earth’s physical past and turn heaps of data into a narrative about what’s below. These days, the stories they’re telling are heard by giant oil and gas companies—their employers. Both were hired by the booming industry right out of Illinois State.

In the four years since, the engaged couple’s work has taken them to some exotic locales, including Dubai, Australia, and Chile. The globe-trotting is among the nicest perks, but it’s the chance to study the Earth that really excites Roche ’07, M.S. ’09; and Carlock ’07, M.S. ’09. That opportunity might not exist were it not for some profound changes now reshaping the oil and gas landscape.

“We’re very aware of the fact that this industry does change with whatever global situation or energy revolution is going on at the time,” Carlock said. “We’re really aware of that, and also aware that it could go down again. We just try to position ourselves as best we can.”

Drew Carlock and Erin Roche

Drew Carlock and Erin Roche.

Roche and Carlock are among many Illinois State alumni whose careers have been bolstered by a resurgence of U.S. oil and gas production. It’s meant more digging for the geologists, more number-crunching for the financial analysts, and more lobbying for the policy experts.

But the same developments that led to that resurgence—namely the expanded use of controversial technologies such as horizontal drilling and hydraulic fracturing—have put their industry under increased scrutiny from environmentalists and, in states such as Illinois, lawmakers.

These concerns put the alumni interviewed for this story, at times, on the defensive about their life’s work. But it also gives them a unique perspective on the most complex energy issues facing policymakers, ones that are often unfairly distilled into black or white, right or wrong.

One thing is clear: The U.S. is producing significantly more oil today than it has in decades. Reversing a decline in production dating back to the early 1990s, domestic oil production hit 7.4 million barrels per day earlier this year. By around 2020, the U.S. is projected to become the largest global oil producer, according to an International Energy Agency report last year. Perhaps most surprisingly, U.S. dependence on foreign petroleum has actually declined since peaking in 2005, due in part to decreased demand and increased production, according to the U.S. Energy Information Administration.

The increase in U.S. production is largely tied to the unlocking of new reserves of oil and gas found in previously untapped shale rock through horizontal drilling and hydraulic fracturing. That latter process, known as “fracking,” uses a high-pressure mix of water, sand, and chemicals to crack open the rock. Both technologies have been used for decades on porous sandstone, but it wasn’t until creative scientists took a “conceptual leap of faith” that they tried it on the tougher shale source rock, Geology Professor David Malone said.

“When you’ve got $100 a barrel oil, companies can afford to pay scientists a lot of money to be creative,” Malone said. “Once you get a couple of breakthroughs, it’s contagious.”

These days, almost all of Malone’s master’s degree graduates go into oil and gas. It’s not uncommon for a new college grad with a master’s in geology to find a starting salary in the six-figures, Malone said.

When Roche and Carlock graduated in 2009, there weren’t a lot of jobs available in environmental consulting. So they both interviewed for oil and gas jobs in Houston, where they live today.

Roche was hired by ExxonMobil and has worked in exploration and production. Her first job brought her to East Texas, drilling 6,000-foot wells in shale using horizontal drilling and fracking. She’s now on a unique “special studies” team that tackles some of the trickier geologic problems facing her company. Carlock works for BHP Billiton’s oil and gas arm and is doing exploration work in Australia, mostly offshore.

“We do what we love every day. We apply everything we learned every day,” Roche said.

Surviving the lean years

Geologists haven’t always had it so good.

Chuck Wiles at a work station

Illinois State alum Chuck Wiles.

Chuck Wiles ’80 calls his generation of geologists the “survivors.” On a Friday back in 1986, during the oil glut when prices fell to less than $10 a barrel, he found out he was going to have a daughter. On Monday, he lost his job with the independent producer he worked for in southeastern Illinois.

Wiles has been an independent geologist ever since, helping companies with a well site they’ve already identified or by evaluating untapped acreage for its potential. Wiles’ area of expertise is the Illinois Basin, which covers 60,000 square miles across Illinois, Indiana, and Kentucky.

The odds of finding oil are stacked against you, Wiles says. But in 1997, Wiles helped a company win the prestigious “Wildcatter of the Year” award from the Illinois Oil and Gas Association for his role in finding several productive wells in an unproven field near Effingham.

“That’s kind of fulfilling, when you do put something together like that,” Wiles said. “I’ve also been on the other side of the fence, where it’s taken some time, and you get a dry hole. It’s just part of the business. …I’m self-employed, so if you don’t bring it in, you don’t make anything.”

When oil and gas companies are doing well, like they are now, they drive up capital spending on exploration and production, said Jackie Ferree ’83, Global Upstream finance manager for Chevron.

Jackie Ferree

Business alumna Jackie Ferree.

“We front a lot of money just to get the rights to explore, and then we have to pay a lot to explore, so you better hope the research is accurate,” said Ferree, an accounting and business administration alumna who previously served on Illinois State’s College of Business advisory council.

Ferree has spent her entire career at Chevron, mostly in California. She recently began an assignment in Lagos, Nigeria, as Chevron’s manager of internal controls and compliance, the first woman to hold that post. Back in 1991, Ferree also became the first woman to join Chevron’s San Francisco-based international auditing staff.

She’s gotten to see the world, and the chance to switch jobs within the same company is a good fit for someone who gets “antsy” after a couple years in one place. Ferree spent a year working on a team to record Chevron’s $4.5 billion acquisition of Atlas Energy, a major player in shale gas, in 2010-11.

“I lived and breathed that one,” she said.

US oil production graphic

U.S. field production of crude oil is on the rise after bottoming out in 2008.

Changing the conversation

But as any motorist who’s seen gas prices jump 30 cents overnight knows, things can change in a hurry.

When economics grad Emily Hickey ’08, M.S. ’10, first started working in the natural gas industry, there were concerns about meeting demand and the need to import gas. But the production of natural gas from shale has changed everything, as many have seen on their heating bills. Natural gas prices have plunged from highs above $10 per million BTUs in 2005 to around $4 per million BTUs today.

In just a few years, the conversation has shifted to exporting natural gas and other innovative uses, said Hickey, who was hired by Nicor Gas as a rate design analyst after graduating. She now works for Atlanta-based AGL Resources, which acquired Nicor in 2011, handling regulatory and policy issues.

“It’s really exciting because we’re having discussions about energy independence and natural gas vehicles,” she said. “It’s really interesting to be involved in that. It’s really relevant to our country.”

Critics say that a rejuvenated U.S. oil and gas industry comes at a steep environmental cost, particularly fracking, arguments laid out most publicly in such films as Gasland and Promised Land.

In Illinois this year, lawmakers passed some of the strictest fracking regulations in the country, crafted with the help of industry and some environmental groups. They require operators to submit chemical disclosures to the state both before and after fracking, as well as require the companies to conduct water testing before the fracking process and then again after it is completed.

For those working in oil and gas every day, these concerns can seep into family gatherings or their inboxes when a friend emails an article about fracking, said Roche, the geologist. If you’re being responsible, drilling like you should be, and following the rules, there shouldn’t be any issues, she said.

“It’s a little frustrating,” Roche said. “You can’t help but argue with it and try to clear up opinions.”

That was David Sykuta’s job for more than 37 years. The 1972 political science grad was the chief lobbyist for the state’s largest oil producers and refiners and head of the Illinois Petroleum Council.

David Malone

Geology Professor David Malone.

He got into government work as a legislative intern at the urging of some professors. He found the inside of government fascinating and thought his knack for public speaking might make him a good lobbyist.

“It’s not a career for someone with thin skin, or a low boiling point,” said Sykuta, who retired from full-time lobbying work last year. “But it took me places I never dreamed I’d be, and I interacted with people I never thought I’d meet, and it all started on the third floor of Schroeder Hall.”

His industry’s environmental record is not perfect, but it confronts problems and fixes them, Sykuta said. But the industry’s story is hard to tell, he says, “because almost everything we do is out in the middle of nowhere, or underwater, or underground,” with little direct interaction with consumers.

“Nobody anywhere would be living the lives that they live, with the abundance they have, were it not for reasonably priced energy, particularly oil and natural gas,” Sykuta said.

As a scientist, Malone understands the concern about the environmental impact of modern oil and gas production practices.

“There’s always a competition between quality of life and quality of environment,” Malone said.

Editor’s note: This article is part two of an ongoing series on the role Illinois State students and alumni play in the business of energy. Read part one about wind energy.

 

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