The American Petroleum Institute survey that points to a fast-approaching shortage in key technical positions in the oilpatch has a lot of companies worried about the depths of the technical benches.

The work force is aging, and too few college graduates are coming into the market to meet the anticipated demand. This isn't a sudden revelation. Companies like El Paso Production Co. have seen it coming. They're worried, but they're not ready to panic.

The kind of work the oil and gas industry offers attracts many people. "I decided on a career in exploration and production (E&P) because every day presents new and interesting challenges," said Rachel Glaug, production engineer.

"I went into E&P because I enjoyed making maps of the subsurface from seismic and log data and because the challenge of finding oil and gas was like a high-stakes, high-risk treasure hunt," added Paul Hunt, senior staff geophysicist.

El Paso has tried to build qualities into the organization that make people want to enlist and stay. "First, we have a clear purpose. El Paso provides natural gas and related energy products in a safe, efficient and dependable manner," said Lisa Stewart, president of El Paso's Production and Non-Regulated Operations.

The company also has tried to create an entrepreneurial culture. "We've instituted a new program in the E&P group designed to encourage employees with good ideas to bring them forward. P.R.I.D.E (producing results in daily enhancements) encourages employees to look at their daily routines and ask, 'how can I do this better?' either resulting in additional production or a cost reduction or simply a smarter way of accomplishing the task. The program has been embraced by field employees and new ideas are bubbling to the top and being implemented as soon as practicable," Stewart added.

Employees like the entrepreneurial spirit. "There's never a dull moment in the oil field. There is always something new, whether it's developing a new prospect or finding new potential in old wells," said Kelly Duncan, reservoir engineer.

Noting the frustration many employees have faced trying to move an idea through a cumbersome, top-heavy organization, El Paso has flattened the organization to give everyone an opportunity to make a difference. Employees, including new employees, are encouraged to offer their opinions and decisions made on those opinions can reach the field in a few days.

Another key element in keeping people happy lies in recognition for work. El Paso's philosophy is straightforward. It rewards top contributors with awards and bonuses. The flat organization also assures that recognition gets to the top quickly and rewards reach the contributing employee quickly.

The kiss of death in some companies is the dead-end job. "We are implementing a robust training program. We give graduates an opportunity for excellent hands-on training coupled with opportunities to rotate to other divisions," said Stewart. That rotation might include coalbed methane, offshore E&P or onshore activity. Employees can seek jobs in the Rocky Mountains, onshore Texas and Louisiana, the Raton Basin of southwest Colorado and even offshore Brazil.

Security of employment has been an oilpatch problem in the past as massive layoffs and hiring sprees followed activity slumps and surges that tracked the prices of oil and gas. A company with a philosophy of building the business - through sags and peaks - regardless of commodity prices will have a better chance of getting and keeping people than the company that dances to the oil-price tune-of-the-month.

That kind of philosophy imposes requirements on the company. The company must enforce capital discipline. It must insist that available cash goes to the projects that offer the greatest returns, and it must accurately reflect the risk of those projects.

El Paso goes through the common recruiting channels for its new technical people, but it also has an employee referral system designed to help locate people that meet the company's needs.

With a shortage, the industry has gone to great lengths to hire and retain key people. El Paso benchmarks its practices against the market to stay competitive, and as market conditions change, the company changes.

Incentives include a total compensation package that can be any combination of base salary, equity in the company and bonus payments. The pay-for-performance aspect assures top performers get top compensation.

At El Paso, "We have definitely seen the market for good people become extremely tight. However, we feel that El Paso is extremely competitive in recruiting talented people," said Stewart.