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Oil and Gas

The engineer’s role in troubled times

Survey results indicate concern, contingency planning

By Kevin Parker April 4, 2020
Courtesy of: CFE Media

The most general definition of “engineer” in Webster’s dictionary is “a person who carries through an enterprise through skillful or artful contrivance.” It has been suggested that engineers have an important role to play in defeating the coronavirus pandemic.  

Think about it. If this were Gilligan’s Island, it would be to the professor and not the skipper that we would turn to for guidance.  

For a better, and less facetious, model of what must happen we can look at World War II. The historian Paul Kennedy’s book, “Engineers of Victory,” examines five case studies that illuminate how skillful, artful contrivance was used to solve specific challenges related to defeating the Axis powers 

“The book’s potential transferability to large nonmilitary organizations will seem obvious,” says Kennedy. 

Instead, on our Google News pages, we read stories about the Chinese building hospitals in days and the south Koreans use 3-D printing to crank out respirators. Closer to home, the story is about pinpointing where in the supply chain that shipment of personal protective equipment is stranded. 

The takeaway must be that manufacturing must come back to the United States, which can’t remain captive to global supply chains.  

Oil & gas specific 

For the oil & gas industry, the coronavirus is a double whammy. Not only are steep demand drops anticipated, but the demand loss is being manipulated to attack the viability of shale-based oil & gas production. Events are moving fast, but include the following. 

The White House promised to bolster oil prices by filling up the Strategic Petroleum Preserve. Doing so would cost $2.6 billion.  

The International Energy Agency (IEA) on March 16 said that decline in transport, industrial and commercial activity points to a drop in global oil demand of as much as 2.5 million barrels a day for the first quarter, compared to the same quarter last year. 

On the morning of March 17, Brent crude oil was trading at $29.91 a barrel. U.S. shale producers need a price of at least $45 a barrel to remain viable.  

Russia and Saudi Arabia refuse to cut production. Russia says it can maintain operations at $30 per barrel for a decade. The IEA says developing countries dependent on oil production will see a 50% to 85% fall in petroleum revenues. 

In the last industry bust, Texas lost more than 103,000 jobs and only 36,000 came back in the period from 2016 to 2019. So far, at least seven U.S. independent producers have announced spending cuts. 

What engineers think 

Oil & Gas Engineering is published by CFE Media & Technology, which also publishes Plant Engineering and Control Engineering. CFE is an acronym for content for engineers. CFE Media is surveying its readership to gauge the more immediate impacts of the new environment. 

Top actions being taken by the respondents’ companies because of coronavirus include the following 

  • Eliminating travel 
  • Delaying or eliminating hiring 
  • Adding supply chain contingencies, including secondary sources  
  • Delaying or eliminating investments 
  • Mandating work from home  
  • Adding new manufacturing capabilities to fill supply chain gaps 
  • Increasing production of relevant products to meet increased demand. 

About half of respondents said their company is having supply chain problems. Eight percent said they were having severe problems and 40% minor problems. 

Finally, respondents were asked, what strategies should the U.S. government review to help address this type of situation in the future? Top responses included incentivizing re-shoring of key manufacturing segments back to the U.S. and doing more to promote manufacturing automation where production can be completed with minimum operator involvement.  


Kevin Parker
Author Bio: Senior contributing editor, CFE Media