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How energy transition is changing skills demand

Energy transition
Energy transition; Source: ESI Africa
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The energy transition from high-carbon fossil fuels to a lower-carbon future is changing the demand for oil discovery skills as international oil companies that were big employers of petroleum engineers and ancillary professions are shifting focus to cleaner energy sources.

In early 2021, Shell, one of the international oil companies, acquired 100 per cent of ubitricity, a leading European provider of on-street charging for electric vehicles (EVs). In the UK, ubitricity provides customers with access to over 5,000 charge points. By 2025, the company aims to install 50,000 on-street ubitricity charge points up and down the UK.

ExxonMobil plans to invest more than $15 billion in the next five years, in lower greenhouse gas emission initiatives. This significant increase in spending will further accelerate efforts to reduce greenhouse gas emissions from their operated facilities. Biofuels will also play an important role in a lower-carbon future, especially in reducing greenhouse gas emissions from commercial transportation.

Universities and colleges are responding to this energy transition and the jobs market in various ways. Imperial College London suspended its Masters of Science in Petroleum Geoscience at the end of the academic year 2020-21. Stanford University has modified and renamed its petroleum engineering programme. It is now called Energy Resources Engineering and offered by the Department of Energy Resource Engineering in the School of Earth, Energy, and Environmental Sciences.

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In Saudi Arabia, King Abdullah University has also modified and renamed what used to be its petroleum engineering programme. It is now called the Physical and Geological department. The University of Lagos in Nigeria has announced it will not admit students into its Petroleum and Gas Engineering programme for the 2023-24 academic sessions.

These universities are suspending, expanding, modifying and upgrading these courses in order to reassess the skillset needed in today’s broader earth energy industry to be able to come up with new fit-for-purpose courses.

“Universities are established to meet societal needs. They keep or shut down programmes mostly due to demand. The energy transition may have discouraged many people from pursuing degrees in geoscience and petroleum engineering resulting in low demand levels, hence the decision to stop those programmes,” Joe Nwakwue of the Society for Petroleum Engineers Nigeria said.

Since 2015, the number of undergraduates in petroleum engineering (PE) programmes has been decreasing. According to data provided to SAFE from Texas Tech University, in 2019 the United States 22 petroleum engineering programmes enrolled nearly 2,000 seniors. This was roughly 1,800 fewer than in 2016. In total, more than 4,500 US undergraduates were perusing petroleum engineering degrees in 2019, down 60 per cent from three years before.

The demand for oil accelerated with the invention of the motor car in the 19th Century. As car ownership grew so did the demand for oil to make petrol (gasoline) use as fuel. This is changing rapidly.

Nwakwue has also been quick to point out that in Nigeria he is aware that a lot of curriculum adjustments are afoot to reflect these realities. But argues that based on Nigeria’s reserve/production ratio for oil and gas of 56 and 72 years, respectively, the country will still need a constant supply of talent to optimally recover and deploy these resources for economic growth and development.

“It will be self-defeating not to do so. I suspect a lot of these departments will be renamed to Energy Engineering or studies or such other names that reflect our present realities.”

Nevertheless, Nigerian universities have a reputation for teaching from old notes. Although the country is still an oil economy – the sad thing is that the people graduating are not finding jobs.

There are about 12 petroleum engineering departments in Nigeria with an average class size of 50 students. This means they graduate with about 400 students annually.

“The industry can only support 100 new graduates yearly because it is not labour intensive,” Nwakwe explained.

The good news though is that petroleum engineering and geoscience are based on the analytical subjects of mathematics, physics, chemistry and geography. These analytical skills will remain in demand,” Lateef Akinkpelu, a petroleum engineer and energy consultant at the Centre for Petroleum, Energy Economics and Law at the University of Ibadan, said.

“If the universities don’t listen, the best thing is for students and parents to be aware and not enrol their wards for petroleum,” Elizabeth Obode, a research assistant at Texas A&M University Qatar said.

The fossil fuel industry is challenged and would remain so in the near to medium term, experts say. However, it still provides the world’s dominant energy supplying above 90 million barrels of oil per day. It has been forecasted that it will take a long time before any other energy source will replace those volumes. The best estimate is that it is still some 50 years away before that will happen.

“It is also important to recognise that training in petroleum disciplines prepares students for a career in related fields,” Nwakwue states.

The International Energy Agency (IEA) has projected that by 2025, renewables will become the largest source of electricity generation worldwide. “By that time, renewables are expected to supply one-third of the world’s electricity – and their total capacity will be twice the size of the entire power capacity of China today,” Fatih Birol, the IEA executive director, notes.

Renewable fuels are not limited to solar, wind and hydro. Green hydrogen, another renewable energy source is rising. China is focusing on building a fuel-cell supply chain and developing hydrogen-powered trucks and buses as part of a 15-year plan for new-energy vehicles.

The world’s most populous nation is targeting to have 1 million fuel-cell vehicles in operation by 2030, according to an energy savings vehicle development plan drafted by authorities, despite 2,700 such cars selling in the country last year.

This means renewable energy-related skills will grow in demand as oil discovery skills decrease in both demand and supply.

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