The energy and environment mess that we are in contains vast opportunities for attorneys. Exciting, meaningful and rewarding careers can be had as participants in the transition to a sustainable world. This Future Interests blog is the first in a series analyzing legal employment opportunities in practice areas and industries affected by this inevitable transition. Each Future Interests blog in this series will focus on a single piece of the sustainable transition matrix and the legal career opportunities that each generates, beginning with "traditional" fossil fuels, then proceeding to examine alternative energy sources and technologies.

Drill Baby, Drill

Clean energy alternatives to oil may be the wave of the future, but in the meantime, we have to live in the present.  That means continuing to explore for, develop, refine, transport and consume oil in massive quantities.

While exploiting new oil deposits and burning oil in automobile engines, airplanes, boilers and in industrial activities is a messy business, we cannot just go off the oil addiction wagon, cold turkey. The transition has to be gradual, our enormous dependence on oil being a harsh fact of life. Currently, there is tremendous pressure on oil companies to find and exploit new oil reserves. Reserves are shrinking and China and India\s booming economies feed a huge and growing demand for these diminishing supplies, competing directly for them with the U.S. economic recovery will add to these stresses.

Drilling for oil will benefit us a little bit in the medium term. A carbon-based, supply-side strategy will only result in finding a smidgen more oil here and there. That's not a long-term policy, just a finger in the dike. Nevertheless, it is a useful finger.

Offshore drilling has been going on for 125 years, more than 60 years in the Gulf of Mexico, without appreciable damage to the environment. Look for it to expand to other coastal and oceanic regions, both domestic and abroad. The new Governor of Virginia, Bob McDonnell, says he is committed to offshore drilling off the Virginia coast, and other governors and state legislatures are coming to the same conclusion, prompted by both our energy crisis and the need to bolster their economies.

Onshore, there have been some promising developments outside of the traditional "oil patch" (Texas, Oklahoma, Arkansas and Louisiana), California, New Mexico and Alaska (forget about the Alaskan Arctic National Wildlife Refuge, lost in the political chatter). The Bakken Formation in the Dakotas and Montana has seen a substantial uptick in drilling activity in recent years. Oil shale deposits in Wyoming, Colorado and Utah are poised for development, assuming that the Obama Administration permits it (soon it will have no choice). There is still drilling activity going on in Pennsylvania, the original epicenter of U.S. oil production.

U.S. oil companies are multinationals that explore for and develop oil reserves all over the world and have operations on every continent except Antarctica (the 50-year moratorium on exploiting Antarctic natural resources does not expire until 2041).

What Do Oil Lawyers Do?

The oil industry legal market demands teams of attorneys to help bring new oil sources on-stream, such as real estate lawyers and "landmen" to negotiate oil leases with private land and mineral rights owners; environmental attorneys to handle the numerous issues that arise around oil drilling, refining, development, and "downstream" operations; transactional lawyers to draw up contracts for government-run onshore and outer continental shelf lease sales; negotiators to effect agreements with drilling equipment vendors, pipeline owners, and service station franchisees and independent owners, and others; regulatory attorneys to monitor, explain and comply with government regulations; international law specialists to negotiate and help administer rights agreements with nation states and joint ventures and strategic alliances with other companies; antitrust specialists to manage federal investigations and analyses surrounding major acquisitions; and tax specialists to deal with the complexities of the Oil Depletion Allowances and occasional windfall profits taxes, to name just a few of the practice areas in demand.

Major Employers

Large oil companies, oil service companies, and pipeline companies not only have many attorneys on their in-house staffs; they also farm out significant portions of their legal work – principally litigation – to outside law firms, generally large ones based in Houston, Dallas, New Orleans, Los Angeles, Tulsa, Oklahoma City, Anchorage, and other places where there is a high oil industry concentration. There are also a growing number of boutique law firms that specialize in either energy or oil and gas practices.

Public sector practice is heavily regulatory-driven. The U.S. Department of Energy has multiple law offices that have an oil law practice. Such practices can also be found in the Justice and Interior Departments, the Federal Trade Commission, the Defense Logistics Agency, and several congressional committees and subcommittees.

Every state government has at least one regulatory agency overseeing aspects of the energy industry. Oil patch states have several such agencies. For example, Texas has the following: Railroad Commission, Attorney General Natural Resources Division, Coastal Coordination Council, General Land Office, Board of Professional Geoscientists, Lower Colorado River Authority, Public Utility Commission, and Office of Public Utility Counsel. State agencies work on a wide range of oil and related issues, including: energy efficiency; transportation and heating fuel supplies, pricing, and distribution: oil production and distribution; oil conservation measures; and energy security and emergency preparedness

A large number of trade associations and advocacy and public interest organizations, many with law departments, deal with oil issues, including: the American Petroleum Institute (the largest trade association in Washington, DC), Edison Electric Institute, National Association of Royalty Owners, National Association of State Energy Officials, National Petrochemical & Refiners Association, Association of Oil Pipe Lines, Association of Oil Well Servicing Contractors, and the Independent Oil & Gas Association, to name just a few.

As I indicated above, oil law is of necessity an international practice, too. Many major law firms have both a domestic and international oil (and gas) practice, as do multinational energy companies. There are also a number of international agencies with such a practice, including: the International Energy Agency, World Energy Council, World Trade Organization, International Centre for Settlement of Investment Disputes, and the European Bank for Reconstruction and Development.

Positioning Yourself

Because oil and gas law is heavily transaction and regulation-oriented, any attorney at any career stage should be able to function and succeed as an energy lawyer. The demand for oil and gas lawyers depended for most of its history on the price of a barrel of Saudi Arabian or East Texas Light Crude oil. The rise in prices of the past several years spurred increasing demand. Law firm oil and gas practices are, for the most part, thriving.

While credential enhancements are not as essential in order to practice oil and gas law as they are for some other practices, they can be valuable additions to your resume and make you both a more attractive candidate and also one deserving of higher compensation. Selected credentialing programs include:

• University of Denver Sturm College of Law
  
  • LLM in Environmental and Natural Resources Law and Policy
  • Certificate of Studies in Natural Resources Law and Policy
• Tulane University Law School—LLM in Energy & Environment
• University of Houston Law Center—LLM Program in Energy, Environment & Natural Resources Law
• American Association of Professional Landmen
  • Certified Professional Landman
  • Registered Professional Landman Designation
• Centenary College—Graduate Certificate in Oil & Gas Management

Trends

The future of oil is the subject of nonstop debate. Today, oil is the driver of the global economy, providing 40+ percent of the energy in industrial nations.  Food production, the chemical industry and transportation are especially dependent on oil. There is a slowly developing consensus that we have passed "peak oil," the moment when the discovery of new oil reserves replenished depleted reserves at a 1:1 ratio. If peak oil is now a thing of the past, then the world is consuming more oil each year than it is replacing by new discoveries.

The trend line for oil substitutes is a long one, dependent on two very important variables – price and technology. There is a tremendous amount of oil trapped in the tar sands of Alberta and the shale deposits in Wyoming. However, extracting it is uneconomical at the current price of oil. That may change in the near future, as the global economy recovers and demand picks up, causing prices to rise.

Regardless, the outlook for oil and gas attorneys is positive and will likely remain so for years to come. Oil is not going to go away, supplanted by renewable energy alternatives, for a long time.

For More Information

• Energy Information Administration
• Institute for Energy Law
• Organization of Petroleum Exporting Countries (OPEC)
• Energy Bar Association
• American Petroleum Institute
• Oil and Gas Journal

 Next: Careers in the Sustainable World II – Natural Gas: The Sleeping Giant