The oil and gas industry’s challenges aside, if you have a job as a petroleum engineer, chances are you are being paid well.
Indeed.com reports that petroleum engineer was the highest-paying engineering job in the U.S. in 2020, with an average annual salary of $94,271.
PayScale pegged the average petroleum engineer salary even higher, at $101,575 per year. Meanwhile, according to the U.S. Bureau of Labor Statistics, the median pay for petroleum engineers was $137,720 per year in May 2019.
Perhaps unsurprisingly, the majority of petroleum engineer jobs in the U.S. as of 2019—18,720—are located in Texas, according to the BLS. Salaries are on the higher end there, at an average of $172,890. California is a distant second with 2,440 petroleum engineer jobs, followed by Oklahoma, Colorado and Louisiana.
The top-paying states, on the other hand, may not be what you expected. Indiana was at the top, with an average annual wage of $198,170, followed by New Jersey, with $183,550. Texas, Colorado and Alaska round out the top five.
Chicago, not exactly thought of as an industry hotspot, was the highest-paying metropolitan area for petroleum engineers. Texas took the next three spots with Houston, Beaumont-Port Arthur and Wichita Falls, followed by Denver (just 15 minutes away from Colorado School of Mines, in Golden, Colorado).
Through 2019, petroleum engineer salaries were on an upward trend. The Society of Petroleum Engineers’ membership salary survey found that base pay increased an average of 29.1% in the U.S. from the previous year. Salaries in 2018 were also up from 2017.
Prior to the pandemic, the BLS had predicted a 3 percent increase in jobs from 2019 to 2029—about as fast as the average for all jobs. There were 33,400 petroleum engineer jobs in 2019.
While a bachelor’s degree is sufficient to enter the industry, an advanced degree does provide an earnings advantage.
In 2018-19, Mines students who graduated with a bachelor’s degree in petroleum engineering received an average salary offer of $87,853. Master’s graduates that year received an average offer of $128,333, a $40,480 premium.
Salaries will likely only increase when the industry recovers from the pandemic. According to OilPrice.com, “the current crisis and the tens of thousands of layoffs every month since March are setting the stage for a massive talent shortage in just a few short years.”
“When the industry enters the next boom cycle, it may not need all these jobs—some of them could be eliminated due to greater efficiency and automation. But while it might not need all those employees, it will need many,” the article continues.
This labor shortage means companies will compete for the best engineers available, and offer even more incentives for employees with the background to help the industry overcome its unique challenges.
Tom Blasingame, incoming 2021 president of the Society of Petroleum Engineers, said the industry will have plenty to offer current college students, in an interview with the Journal of Petroleum Technology published in September 2020.
“Enrollments are shifting and have been for a while, but my crystal ball says that in the 2022–2024 time frame we will face a significant workforce shortage,” he said. “It is reasonable to expect that, at present, enrollments will suffer, but ultimately we will be a (very) attractive destination for the rugged individualist who likes to get up early in the morning and change the world.”