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Energy

The changing face of the oil industry in Alaska

  • Author: Craig Medred
  • Updated: September 28, 2016
  • Published May 2, 2015

On some things, the Alaska leaders of the oil giants BP, ExxonMobil and Royal Dutch Shell agree: The 49th state's oil future remains solid despite today's global oil glut. Any natural gas development will require cooperation among a large circle of interests both in and out of government. And it probably shouldn't be news that the far north operations of three of the world's biggest privately held hydrocarbon businesses are now spearheaded by women.

Almost as quickly, too, Janet Weiss, the regional president for BP Alaska; Karen Hagedorn, the Alaska production manager for Exxon; and Laurie Schmidt, the vice president for Shell Alaska, concede that they can understand why others might think differently.

It's the history.

For almost a century after John D. Rockefeller established the Standard Oil Company in 1870, the "oil bidness,'' as it is sometimes called, was almost solely a man's world.

And as late as two years ago, Rigzone, a website that covers the oil and gas industry, was reporting that an industry-wide poll it did in conjunction with BP found that about three-quarters of the people in the business believe "oil and gas remains a male-dominated industry, and there was still a lot of progress to be made. The majority of energy professionals said it was quite or very important for the oil and gas industry to ensure it is attractive to women. This finding is particularly relevant given nearly nine out of ten survey respondents were male."

The most telling statement there might be the last. The responses were weighted nine to one in favor of males because there are so few women in the oil industry. The U.S. Bureau of Labor Statistics in 2014 reported fewer than one in five people in the industry was female.

Stir in the demographics of the most male-dominated state in the nation and it's hard to avoid wondering how the planets aligned to put women in charge of three of the four major oil companies operating in Alaska.

The uniqueness of the situation cannot be ignored, but, as Hagedorn observed, "it's kind of sad it's a story in a way. Someday no one will notice, (but) perceptions take a while to change.''

Then and now

On the surface, gender might be the most obvious difference between the leaders of Big Oil in Alaska today and the oil leaders here during the industry's infancy in the 1960s and '70s, but dig down a bit and even bigger differences emerge.

When Marvin Mangus and other geologists for Atlantic Richfield roamed the North Slope in a hunt for hydrocarbons 50 years ago, Alaska was a new and primitive state.

Men trekked across the wilderness on foot or floated down rivers in collapsible boats. They spent months living in canvas tents with no means of communicating with the outside world. They worried about being attacked by bears. They depended on previously cached 55-gallon drums of food. And they looked for easy oil.

Prudhoe Bay State No. 1, drilled by Atlantic Richfield in 1968, hit oil at about 10,000 feet. A confirmation well drilled the next year revealed a massive oil reservoir below ground in the Arctic.

Building a pipeline to get that oil to tidewater in the 1970s was a massive undertaking, but getting the oil out of the ground was "Beverly Hillbillies" easy. Production was almost as simple as punching a hole in the Earth and watching the crude flow.

By the late 1970s, crude was gushing out of the Prudhoe reservoir at a peak of 1.5 million barrels -- 63 million gallons -- per day.

The good times lasted for about a decade. Production peaked in 1988. It has been all downhill since, and that changed everything about how the oil companies function in Alaska. With the easy oil gone, the business of squeezing the maximum out of old oil fields and finding new, smaller deposits has become an increasingly sophisticated business.

Enter the technocrats.

"The bizarre truth,'' Weiss said, "is that I wanted to be a biochemist.''

That was when she was in elementary school in Oklahoma. She became intrigued by spider bites and how to treat them. She wanted to find a cure.

"I was definitely odd,'' she said. "I was really interested in science. I dreamed of going to MIT.''

She never made it there. She ended up at Oklahoma State University, where her father was a professor, and she gravitated away from biochemistry into pure chemistry and then chemical engineering. After graduation, she got married and came north to Alaska for the first time in 1986 with her husband, Troy, another engineer.

"Alaska, in this business, was a great place to grow up,'' she said. Weiss was working in the Alaska oil patch in the 1980s when world oil prices slumped, as they are doing now. Falling prices forced innovation, she said. Engineers began focusing on the most cost-effective ways of getting oil out of the ground. They gravitated to the cutting edge of technology to try to do more with less. It was, in some ways, a heady time.

Weiss became a reservoir management team leader. She never expected to journey along the management track into the position she holds today. In that, the path of her career is similar to the way Schmidt and Hagedorn ascended to corporate leadership.

That Hagedorn, Weiss and Schmidt ended up managing Alaska's largest and most important businesses might appear almost accidental if one was foolish enough to believe anything happens by accident in the world of corporate oil. It doesn't.

Oil is a Darwinian business. Companies compete or they die. And the companies Americans think of as "Big Oil'' are really bit players fighting for survival against state-run entities many times their size.

ExxonMobil, the biggest private player and arguably the most powerful, is the fourth largest oil company in the world, but the 5.3 million barrels per day it pumped last year is less than half of what Saudi Aramaco produced and significantly less than that of Russia's state-owned Gazprom.

BP and Royal Dutch Shell are sixth and seventh, respectively, behind PetroChina and the National Iranian Oil Co. The Iranians aren't actively recruiting women in the oil fields. The private, Western companies are for the simple reason that it is good business.

Doubling the pool of applicants for tech jobs increases the odds of finding better-qualified candidates. The Oil and Gas Financial Journal calls it "a war for talent.''

In this war, the oil industry has become not only a business that heavily recruits for talent; it has become a business that cultivates and develops it.

Puzzle-piecers and problem-solvers

None of the women of power in today's Alaska oil industry set out to become managers. There is not a master's degree in business administration among them. Hagedorn trained to be a petroleum engineer, Schmidt a mechanical engineer and environmental lawyer, and Weiss, a chemical engineer.

They were boosted into management when others recognized they were naturally gifted with the ability to organize, motivate and lead.

Hagedorn started with Exxon as a production engineer in the 1990s, then shifted into Exxon's research division. The increasingly complex and technical problems of getting hard-to-recover gas and oil out of the ground intrigued her.

"My goal was to be the technical guru,'' she said. "I like the challenge of putting a lot of pieces of a puzzle together.''

This is a view echoed by Weiss and Schmidt, who, like Hagedorn, seem to find their greatest pleasure in problem-solving. And people management, at least when done well, might be the biggest problem-solving challenge of all.

"I love working with people,'' Schmidt said. "I've always been pretty social. I recognize that I'm good at relationships.''

Schmidt was the first of the trio to recognize the value of those skills. Weiss, on the other hand, spent 13 years in the oil business before taking on her first management assignment, and then admits she struggled to decide if she wanted to manage people.

"It's been a road of lessons,'' she said. "(But) I love the problem-solving aspect. I like working with people, and I like getting people together.''

From New Jersey to Nigeria

Ask around at Shell, BP or Exxon about the bosses and you'll find people who describe Hagedorn, Schmidt and Weiss as likable brainiacs who gravitated into management positions not because they wanted to tell people what to do but because they were good at organizing people into teams that could get things done.

Schmidt spent four years in Russia developing local contractors to support Shell developments. She left Russia for Nigeria, a notorious global trouble spot, to do the same thing.

"My job was to develop the community economies,'' she said. "It was a pleasure to be there. The people were so kind, so warm, and there was a lot of good work to do.''

Not that there weren't problems. Nigeria is an oil-rich province beset with huge social problems where Shell has struggled to maintain production in the face of corruption, theft and pipeline sabotage. An estimated 100,000 barrels of oil are stolen each day by thieves who punch holes in Nigerian pipelines. Some of that crude is home-brewed into diesel, kerosene and gas.

Asked about the danger of working in an African trouble spot, Schmidt joked, "I'm from New Jersey.''

But she went on to explain that Shell employees lived in camps surrounded by security.

"You go to work in a convoy,'' she said. "I always felt safe. It wasn't stressful. One day we had a bullet come into my office,'' but she didn't think it was anyone shooting at her.

Collectively, Schmidt, Weiss and Hagedorn came of age in such male-dominated environments that they say they never really thought about gender much. Things just were what they were.

In high school, Hagedorn said, "I was probably the only girl in the (physics) class.'' She remembers being advised to take home economics, but drew support from her father, an engineer, and her high school physics teacher, a woman with a doctorate in her profession who couldn't get a college teaching job at the time.

"It was great for me,'' Hagedorn said, "not for her. But she said, 'You can do this.' She loved her students. We still exchange Christmas cards.''

In graduate school at Stanford University, where Hagedorn earned her doctorate in petroleum engineering, she remembered there were "probably 300 people in the program, and you could count the women on one hand.''

Weiss remembers her first assignment to the North Slope for the Atlantic Richfield Co. in the mid-'80s as a bit of an eye-opener. It was baptism by fire. "It was a lot like 'can you hack it?''' she said.

Schmidt, for her part, simply grew up in a man's world.

"My father's an engineer,'' she said. "My grandfather was an engineer. My father was the kind of guy who would drive a car until you couldn't drive it anymore.''

He did his own car maintenance and repairs. Schmidt started out wrenching on cars with him as a kid and never stopped.

"It wasn't that normal,'' she admitted. "I was very outdoorsy, too.''

She was what would have once been called a tomboy. When Schmidt left home to study engineering at Virginia Tech, she joined a class of mainly men, but "for me it was natural,'' she said.

But now there's been a flip-flop in the top echelon of Alaska's major petroleum companies. Joe Marushack, president of ConocoPhillips Alaska, is the lone male. "It is encouraging to see women leading major companies in Alaska," Marushack said. "These are tough jobs -- Janet, Laurie and Karen are leading by example and I look forward to working with them."

Behind every woman ...

In interviews with Schmidt, Hagedorn and Weiss, all three track back to the influence their fathers played in their lives. It's clear fathers played pivotal roles in the lives of all these women.

"My father brought home all these rock samples,'' Hagedorn said. She was intrigued by them. They fueled her early interest in science and math. Her father, Al Hagedorn, studied wellbore flows and pressures. Weiss, interestingly enough, studied his work in college.

Weiss' father, Franklin Leach, was a professor of biochemistry at Oklahoma State University in Stillwater. Weiss grew up hanging around his office in a college community where educated people were the norm. She remembers it as a very nurturing environment.

"I was voted most likely to succeed in high school,'' she said. "I was a nerd.''

In some ways, they all were, but no one would describe any of these women that way today. "It's a lot about confidence,'' Weiss said. Well, that and drive and intelligence.

It's no accident Weiss and Hagedorn and Schmidt found success. They all in their own ways wanted it, and they were obviously well equipped to go and get it.

Contact Craig Medred at craig(at)alaskadispatch.com

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