Oil is one of the greatest necessities in the modern world. Few industries impact civilization so thoroughly as its production, which yields fuel, medicine, detergent, plastic, and other daily particulars. Yet oil mining operations encounter complexities that affect each of these key markets. In addition, while a rig supervisor is easily among the most rewarding of careers, specialized chemical engineers could easily apply their talents elsewhere—and still find themselves in a sea of political and practical turmoil. So, what are these industries like? How do firms navigate their whirlpools? And what, to phrase the matter technically, might an engineering student take away from the resulting hodgepodge of information?
The key, says former Exxon-Mobil Senior Project Manager Gary Simmons, is terminology and communication. The traditional oil industry model is divided into “upstream” and “downstream” operations, which refer to the product’s position in the supply chain: An upstream process is closer to the time and place at which the oil was mined, while a downstream one deals with the oil as it is refined, piped, and even marketed.
In practice, oil is mined using a drilling rig in the ocean. It goes through multiple refineries into a pipeline. In other words, mining companies sell gas or oil to the pipeline company and then buy it back, after the substance has been processed. At that point, the oil or gas may be what was originally mined by the company, or it may be what someone else drew out. An additive is usually injected to show distinction and create a product unique to the brand—but for oil companies, this is not enough to make a profit. Additives leave the oil relatively unchanged, compared to how much a chemical is usually altered during processing. So most operations separate the oil into component parts—gas and heavier crude oil, also called petroleum, which is too heavy to sell as gas. However, little money is made through petroleum. The big bucks come almost exclusively from earlier in the process—from those projects which start with nothing but an ocean location and a plan and end with oil from the ground.
Whenever someone starts drilling, there is a risk. The hole might be dry, or some other anomaly might prevent the company’s well-earned seven-figure profits. Also, once oil is produced, the drilling rig, which has no use apart from mining, comes to the end of its lifespan. In its stead, production facilities are set up, and the oil goes “downstream” while the company plans its next expansion project.
On the other hand, all must be done according to federal guidelines. Oil spills are some of the most harmful and widely protested threats to the environment. Consequently, the government has groups in charge of environmental protection that give conditions to be met by drilling companies. Firms such as Exxon-Mobil have officers in charge of directory operation who negotiate with these environmental groups. Often, a regulation pushed by the government limits the firm without clearly helping the environment. Sometimes, after costs and benefits are discussed, the government branch adopts the company’s view on certain topics—resulting in regulations that produce a more efficient supply chain and more easily protected ecology.
Government branches are not the only groups with which one must learn to cooperate in the oil industry. Joint operations between businesses are common, since different companies often build wells near a single location. When this happens, unrefined oil, though it was mined in multiple places, is collected into one location for processing and refinement. Any gas or seawater must be removed from the oil, with the former yielding a profit of its own and the heavier remnant entering the petroleum market. But in all projects, parties must not only know their own strategy, but also those of others. As with all politics, parties will reliably say one thing and mean another, and some firms obtain a reputation for serving themselves regardless of previous agreements. In the oil industry, knowing what move another firm will make is a kind of self-protection.
In terms of engineering disciplines, the oil industry is also a place for generalists. A site supervisor may need to know mechanical engineering, which deals with machinery; chemical engineering, which involves transformative chemical processes; and even civil engineering, a branch concerned with bridges and similar structures. Historically, the demand for some of these engineers was so great that mechanical and civil engineering students were assigned to drilling groups immediately upon graduation. (Chemical engineers, however, were rarely dealt with in this fashion until the mid ‘70s, after a chemical engineering graduate proved successful in a drilling group.)
Similarly, some companies, like Kimberly-Clark, manage entire supply chains—from raw materials to delivery to manufacturing to shipping. The main concern here is always quality. Poor-quality materials not only negatively impact the firm’s profitability, but also affect customers’ experiences. Negotiation skills and no small measure of common sense are needed, because the goal is to “make friends.” Suppliers frequently try to sell everything on their hands, but companies usually cannot buy so much. It is important to look for good, favorable agreements while still protecting oneself.
What might young engineers take away from this? In the field, the problem-solving process is fluid and dynamic. (Many also happen to involve fluids and dynamics.) As Dwight D. Eisenhower said concerning one of the most fantastic problems known to man, World War Two: “Plans are useless, but planning is everything.” In fact, in the oil industry, plans themselves are often useful, too. For example, Kimberly-Clark uses statistical problem-solving methodologies which center around having the appropriate data. Such data is not handed out on a silver platter with a bell to ring for more, as in a textbook. The first problem to solve is the very nature of one’s problem. Things are not made any simpler by the fact that, if something is not in one’s field of operation, it is not their problem at all.
Organization, then, becomes critical. When someone narrows down the innumerable details of life into a set of problems, they should then work on those which have the greatest impact. If anything affects costs—and therefore profitability—it automatically becomes Number One. But the real Number One, as said by that chemical engineer who first succeeded in a drilling crew, is communication. As we learn to slice up our world properly, we should find ways to show our results—our thoughts, thoughts of thoughts, painstaking conclusions, and the rewards of our dream-fragments—in clean, concise, and legible fashion. Then, maybe, we can add to this success new plastics, fuels, and medicines. Yet even if we outlive the age of oil and petroleum, we will not outlive the need for basic human communication, for words on a page, and for the simple thoughts of life.
Sources:
Simmons, Gary. Personal interview. 28 August 2020.
quoteresearch. “Plans Are Worthless, but Planning Is Everything.” Quote Investigator, 4 May 2021, https://quoteinvestigator.com/2017/11/18/planning/.
Image Credits:
Durr, Grant. “Photo by Grant Durr on Unsplash.” Beautiful Free Images & Pictures, 14 July 2019, https://unsplash.com/photos/15mjdcU9RKI.