Few industries are as complex and involve as many overlapping disciplines as does the oil and natural gas industry. That realization has prompted universities and the industry to adapt how they educate tomorrow's energy managers.

Increasingly, students are being required to combine technical skills, such as geology and petroleum engineering, with coursework in economics, accounting, finance and law.

There are currently six energy-management undergraduate programs in North America accredited by the American Association of Professional Landmen (AAPL). They are at Oklahoma University (OU), Tulsa University (TU), Texas Tech University, University of Louisiana at Lafayette, Western State College of Colorado, and University of Calgary. Southern Methodist University (SMU) offers a master's in energy. The University of Texas-Austin offers energy programs in its finance and geological sciences department. Texas Christian University (TCU) offers a minor in energy for any major.

In the 1980s, 10 universities had AAPL-accredited petroleum land management (PLM) programs. The transition has been from PLM programs to energy management, and today only Western State College and the University of Calgary maintain a PLM program.

AAPL is creating an accreditation committee, which will act as the governing body to establish the processes, selection criteria, and on-going monitoring and evaluation for universities interested in having their energy management, energy commerce, and/or PLM programs accredited by the association, says Christopher Halaszynski, director of education.

"Energy companies are not called just oil and gas companies anymore; it is not just petroleum," says Ted Jacobs, director of energy management at TU's Collins College of Business. "It's about all sources of energy. Students will graduate with a well-rounded understanding of the industry."

Better Prepared

Historically, oil and gas upper-management executives came almost exclusively from technical backgrounds. Many of them, after stints in the industry, returned to school to learn business and advance their careers, Jacobs says. Now, energy-management graduates, with a diversified business and technical education, are prepared to see the "big picture" and can better communicate with their technical counterparts.

Students are embracing the concept. Entry-level energy-management graduates typically earn about $70,000 a year, about twice that of their counterparts with other business degrees, and far more than the average for college graduates across the board. Even more impressively, while many college graduates can't find jobs, energy-management graduates are in high demand. Jobs and high salaries are serving as strong recruiting tools for the energy program.

The turning point in energy education is frequently traced to the federal government's energy policies that decontrolled the price of natural gas at the wellhead and restructured the interstate pipeline industry in the early 1990s.

"Energy companies are not just called oil and gas companies anymore; it is not just petroleum," says Ted Jacobs, director of energy management at the University of Tulsa's Collins College of Business.

The sale of natural gas, which had been highly regulated and supplied almost exclusively in long-term contracts, had become a commodity with an active spot market. Buying and selling natural gas was a separate business, requiring different skills than its production and transportation. Electricity was poised to follow suit as a commodity, separate from its transmission. Commercial and financial skills were needed, the energy job market was shifting, and higher education adapted.

OU, the first university to have a PLM program, established in 1958, modified and changed the name of its program in 1999, creating the first energy-management program. OU's PLM program enrollment peaked in 1981 at 800 students. But by the fall of 1997, the program had just four students.

OU's alumni were opposed to ending the program, and convinced the university to restructure it. They advised hiring an OU graduate who was successful and respected in the oil and gas industry to run the program, and to solicit input about how it needed to adapt.

The consensus was that the graduates needed much stronger training in all business disciplines. OU hired Jacobs, who had graduated from the OU PLM program in 1978 and brought 20 years of experience as a landman.

Jacobs headed OU's energy-management program until 2006, when he left to launch a similar program at the University at Tulsa, started in the fall of 2007. In his 13 years directing such programs, first at OU and then at TU, Jacobs has placed 100% of his graduates.

The energy industry has embraced the program at TU, providing about $825,000 in scholarships through 2010, according to Jacobs. In its first two full years at TU (2007-2009), the energy-management program has produced nine graduates, all of whom have been placed in employment. Slots in TU's program are highly competitive; it now has 106 students, with plans to graduate 25 to 30 students annually.

TU is in the process of hiring a director for its master's of energy business program, an online effort it plans to launch in the fall of 2011, aimed at the industry professional (i.e. engineers) who need business acumen and would have pursued a traditional MBA, Jacobs says.

"At TU, we pride ourselves on a student to faculty ratio of 10 to 1. This allows me, and each student's professors, to develop a mentor-type relationship while working with them in identifying their strengths and areas of interest.

"Also, as both their program director and academic advisor, I encourage every student to pursue industry internships and scholarships, to participate in local mentoring programs, and to take advantage of opportunities through the Tulsa Energy Management Student Association," he says.

Students appreciate the vital role that energy plays in the world's economy, Jacobs says. They recognize that energy demand will continue to rise, requiring new sources. They are interested in renewable energy, but realize that all energy sources are important and appreciate the role that petroleum—particularly natural gas—can play as a bridge fuel.

University of Tulsa students visit a drilling rig.

At OU, Steve Long succeeded Jacobs. He has 30 years of diverse experience in the energy industry. Long says OU's curriculum "is tailor-made for today's multi-task generation in that students take energy classes, not only in the Business College, but also in engineering, geology, geophysics, law, meteorology, and GIS (geographic information system) computer mapping." Core courses in accounting management, marketing, economics, and management-information systems are now combined with upper-division-level finance and legal courses in areas such as energy risk management and oil, gas and environmental law.

Energy-industry recruiting and hiring are at levels not seen since the early 1980s, as the industry seeks to replace its aging workforce and the opportunities associated with the emergence of global shale plays beckon. Traditional E&P players are recruiting energy-management students, as are financial institutions and marketing and trading firms.

Enrollment has doubled in the past few years to 300 students in OU's program. In addition, the university has created a new energy specialization option in the MBA program due to the industry's request for postgraduate work in energy finance and economics.

Technology is revolutionizing how oil and gas companies conduct business, says Long. "The students embrace technology. The university is responding to the wants of the students and the needs of the industry by continually reviewing the program and introducing new cutting-edge offerings and practical initiatives."

Bruce Bullock, director, Maguire Energy Institute, SMU Cox School of Business, says: "No other industry is as much at the center of modern life as the energy industry. No other industry involves as many geopolitical, economic, and technological issues.

"The 21st century is shaping up to be the century of energy involving fast-paced developments from traditional oil and gas to hydrogen fuel cells. It's a great industry to study."

Bullock, who had a 25-year career in the E&P and oilfield service industry before coming to SMU in 2007, says, "The Cox School of Business at SMU has a rich history of oil and gas education. Traditionally, it has been in the area of executive education for managers already in the industry.

"These programs cover financial skills and leadership skills. These programs are still very active today and are offered in conjunction with the American Petroleum Institute. Recently, we have begun the process of offering energy programs in traditional degree programs."

Bullock notes that SMU is in the second year of offering an energy specialization in the finance area of its MBA program. "Students are able to take electives in the area of oil and gas law in our law school, petroleum geology and other petroleum-related courses, in addition to their strategy and finance-related courses.

"While this is similar to some of the energy-management programs, this is an MBA-level curriculum and is much more rigorous in terms of the energy-finance courses specifically. It prepares students for careers in energy investment banking, corporate finance within energy companies, energy private-equity funds, and general manager roles within global oil and gas companies. Enrollment in this program has gone from zero to over 50 students."

SMU believes its critical competencies are in finance, strategy, business economics and other core business areas, developing undergraduate coursework for the various aspects of the energy industry. Thus, a Cox student with an interest in energy can major in a traditional area, such as finance, accounting or marketing, but take elective coursework to prepare for careers in the energy industry.

Industry recruiting and hiring still seem to be proceeding at a deliberate, measured pace, Bullock says. "We don't see large numbers of hires from any one company. Most companies tend to interview for at most two or three slots in a given year at the MBA level.

"I believe energy-management education is ripe for cooperation, rather than competition among the various universities. We all face similar challenges and we each have slightly different core competencies. It's far more economical to share those competencies for the benefit of our students through cross-credit, etc., than it is to duplicate them."

Dr. Ken Morgan, director of the TCU Energy Institute and the School of Geology, Energy, and the Environment, says the energy-management program has expanded considerably over the past three years. The university now has a minor in energy technology and management for any major on campus.

"Over 260 students, from 12 different majors, now minor in energy. We offer an industry certificate program in petroleum land management and we now offer a MBA with an energy emphasis, and have a new undergraduate degree track in resource management. Enrollment is soaring. Two years ago, the Energy Institute had 75 students. Now, 260 students are studying with a minor in energy. Geology majors have doubled in three years, as have resource-management majors.

"There is a general excitement about energy. It is all driven by jobs, jobs, jobs."

New domestic discoveries of natural gas, particularly shale plays, have resulted in a very positive attitude in the industry and in the Fort Worth area, says Morgan, who has taught at TCU since 1978.

"Almost all (graduates) who want, and are prepared, have found employment somewhere in the industry….business, science, advertising, marketing, communications, etc. We are focusing more and more on domestic energy sources, all of them."

The University of Texas-Austin, which founded a PLM program in 1959, ended the program in 1995. However, UT now offers a unique master's program that provides graduates with skills in business, law, economics, and policy to complement their training in technical fields, says Dr. Sharon Mosher, dean of the Jackson School of Geosciences. The objective is to prepare them for management positions in energy and natural resources vocations.

Based in the Jackson School of Geosciences, and in collaboration with the department of petroleum and geosystems engineering, the energy and earth resources graduate program has reached capacity at 48 students. It is a 30-credit-hour program that includes a thesis. Some students come directly from bachelor degree programs, but the majority are early career people seeking to improve their qualifications for upward mobility in major energy companies, consulting firms, government agencies, and alternative-energy specialty fields, says Chip Groat, program director.

The McCombs School of Business has an energy certificate program in its executive education program that offers an in-depth look at economics, strategy, business valuation and finance specific to the energy industry.

"At the University of Texas at Austin, we primarily have concentrated on providing energy education focusing on the scientific and technical side through the Jackson School of Geosciences and the petroleum and geosystems engineering department," Mosher says. "Ener­gy education has an increasing emphasis on understanding processes, not just describing what is observed. Therefore students need more basic science—math, physics, chemistry, biology—than ever before.

"At the Jackson School we emphasize a strong undergraduate degree with an emphasis on basic skills, and at the graduate level we provide a multidisciplinary research environment that takes a multifaceted approach to energy-related problems."