Tuesday, November 19, 2013

Tech Talk - Employment Opportunities

In 1961 I started my career as a Student Apprentice in the National Coal Board in England, going on a year later, under a National Coal Board Scholarship, to the University of Leeds, where I studied for both my bachelor and doctoral degrees. As I recall the NCB had authorization for 100 scholarships a year, but rarely awarded more than a few (I was the only one at Leeds in my year). By the time that I received my second degree, in 1968, the writing was on the wall for the British Coal industry – folk I knew with 1st class degrees were finding work as face deputies, with continual reduction in pit numbers making promotion beyond that point hard to anticipate. When I mentioned an offer from America the folk in the Personnel Office suggested that I would be wise to take it.

When I came to the USA the coal industry was also in a bad way. Coal prices were low, and the market very competitive. As a consequence there was little interest in mining research, and student enrolment in Mining totaled around 40, for the four-to-five year course that we offered for undergraduates at the time. Numbers in fact were so low that I was asked to teach in another department, since we did not have the numbers to justify the classes in Mining. And then along came the first Oil Crisis.

Suddenly we did not have enough room, with individual classes rising to enrolments of up to 50 students. Colleagues were teaching three separate lab classes for the same subject to meet the demand. As an anecdote of the times I remember going to a Mining Conference in Pittsburg and, at the dinner, being asked what I wanted to drink, when I asked for Scotch I got a bottle – of a quite expensive brand. This continued through the beginning of the 1980’s and we were learning to accommodate the larger numbers and adjust to having some financial security in our funding. The only problem was that we were finding it hard to attract students for graduate school, since job offers were multiple and lucrative. The market was good both for coal mining and in the metals side of the house (gold, lead and other minerals). (It was in this interval that I was named the second Curators’ Professor of the campus, following, inter alia, our development of a novel mining machine).

And then Saudi Arabia re-opened the taps, and the price of oil fell, and suddenly there was a glut of coal on the market. Suddenly we were faced with highly qualified graduates calling back to see if they could get into graduate school, enrolment began to shrink rapidly as word got back to the high schools about the poor employment prospects. Those of us seeking research funding were driven to look beyond the discipline of Mining into other applications of the technology, if we were to be able to find funding. We got a new Dean early in that time, and I rather suspect that there was not a year over his decade or so of tenure that he was not faced with cutting the school budget. One year the Mining class was down to an enrolment of one student for his year, and talks of mergers and dissolution were in the air.

But then the price of oil began to rise again, coal markets began to grow, both nationally and abroad, and metals prices also began to rise. And we slowly grew back up to, and currently beyond our previous records for enrolment at the beginning of the 80’s. Salaries and opportunities have grown and, since we now recruit more actively abroad, even with a strong domestic demand for graduate students, our graduate program has also surged. Faculty work-loads have also grown, and with the odd retirement or move elsewhere there has been a shortage of qualified faculty, and only limited time available to develop new research programs, despite new levels of funding.

And yet, just as the schools become complacent with their new prosperity, there are signs that we have perhaps passed the current peak, and may well be heading into the next cycle of down and then up. The writing is now yet that deeply inscribed into the walls, but there are some worrisome trends that today’s Department Chairs are, no doubt, already well aware of.

In the United States the TVA has just announced that it is moving away from the use of coal in its power plants. The goal is to reduce the share that coal provides to electricity production from 38% to 20%, while raising the amount generated by renewables from 15.7% to 20%. It is intended, over time, that a third 20% will come from natural gas, and nuclear power will make up the total to 100%.

The impact of this, and similar decisions being made at power plants around the country, is already evident. The EIA, in their November Short-Term Energy Outlook, has noted that employment in the Kentucky coal industry has fallen 24% this year. And while the fall in production is, as yet, not that great, with exports currently failing to pick up the decline, the future is, yet again, not that promising.


Figure 1. Trends in US Coal Consumption (EIA)

At the same time there has been a little wobble in the gold market. Barrick Gold Corp. the largest gold mining company, has seen its stock stumble over the past year.


Figure 2. Price of Barrick Gold stock over the past year (Forbes )

Currently traders are anticipating that the price of gold will have to fall below $1,200 an ounce before demand will rekindle.

These are, perhaps as yet small straws in the wind, yet even as the global economy continues to struggle upwards I suspect that the lot of the Mining Engineer may soon be a little more complicated than it has been for a while. This last surge in employment and opportunities saw the end of my generation to a large extent, so that we have been replaced with a much younger crop, since the intervening management layer was not formed, since there was neither the demand nor the supply available in those lean years to create such a layer.

And yet it is unlikely that the future will be as bleak as we saw in the 60’s and 80’s. The predictions of vast resources from shale gas to help many countries meet their energy needs have not yet proved to be real. In the meanwhile, as the Polish experience indicates governments have to ensure that their constituents have adequate fuel supplies at a reasonable cost – and for many countries that means a coal future – even if, as in Poland’s case, they have to start importing it to keep up with demand.

7 comments:

  1. This may a bit outside your field, but I wonder if there is a real chance of altering coal into a cleaner or altered state to replace petroleum? Or is it that the means don't justify the ends.

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  2. It can be used to replace diesel, and GE have done all the work needed to clean up the post-combustion products.

    When will that happen? When the price of oil goes up a bit more.

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