UNIVERSITY PARK, Pa. — Executives of the fictitious midstream natural gas company Blue Vector Gas were huddling up to prepare for a board meeting when the bad news hit: a pipeline explosion had just claimed three of their workers, setting fire to nearby homes, potentially polluting the town’s water supply and threatening the lives of a Girl Scout troop reportedly camping in the area.
Worse, it was the fictional company’s third incident in as many years.
Through a series of emails delivered during several hours to four teams, that was the scene that played out for students competing in Penn State’s first Energy Crisis Leadership Challenge, held remotely via Zoom due to COVID-19 restrictions.
The challenge bookended a course held spring semester in the John and Willie Leone Family Department of Energy and Mineral Engineering (EME) in which undergraduate seniors spent the semester learning about crisis management in the energy sector from leading energy firms such as BP, Exxon and Enron.
The energy challenge was designed by Peter Rigby, a 1979 Penn State graduate in petroleum and natural gas engineering and energy expert, who modeled it after a similar challenge he has taken part in that was developed for undergraduate and MBA students at the University of Michigan. Rigby, who has handled crises without formal training during his career, wanted to equip students with these tools while strengthening their teamworking skills.
“In this era — when so much information is available — it’s changing education in so many ways,” Rigby said. “But one thing simple access to great information doesn’t do is teach students is how to collaborate and cooperate and think about unstructured problems in a creative way. That’s what is going to make or break someone when they get out into the real world.”
For the students, here’s how the competition unfolded:
For four hours on a Friday night, student teams were bombarded with emails detailing the aftermath of the explosion. They were tasked with deciphering conflicting accounts from various players within the company, responding to emails, and answering requests from angry board members for updates on the situation.
The next day, the teams presented the situation and recommendations to members of the board, released a video to the public from Blue Vector Gas’ CEO and held a press conference facing members of the media. Board members were played by Penn State alumni, many themselves executives at energy companies. Experts in media relations and crisis management — all with extensive experience on both sides of the podium — filled the role of the media. One group even received a virtual visit from Penn State President Eric Barron.
Students were judged on their knowledge of the company and their roles in grappling with the disaster, response plan, communications skills and compassion for their workers and the community.
Liam Cummings, who is graduating with a degree in energy engineering and a minor in energy business and finance, said the class was a great chance for engineers like him to step out of their comfort zone and approach problems of a more abstract sense. Throughout the exercise, his team relied on case studies — real-life lessons of what and what not to do — taught during the semester in course. That effort paid off for his team, which won the overall challenge. Cummings also earned the award for best individual performance.
“I don’t know that I ever would have had a chance to do something this interesting or this fun in another class,” Cummings said. “This experience is something I could see myself using in my career down the road, and I appreciate that experience.”
His team’s efforts to rectify the crisis included trucking in water for residents, sheltering displaced families, implementing updates to the pipeline and launching an independent safety review for the company.
About the course
The course is designed to help students solve open ended and complex problems that they might face in energy and extractive industries. Students learn how to manage tensions and competing claims while gaining an appreciation for how leadership and interpersonal relationship styles can influence the effectiveness and outcome of the team.
Course goals include working under pressure, operating outside one’s comfort zone, developing a strategy for making judgments in the face of competing constituencies and demands and learning how to critically think through response formulation while exercising integrity and strength of conviction when judgments are questioned.
Lasting lessons
One takeaway, students said, was crisis response means dealing with many stakeholders. Members of the media will be focused on issues that impact the public, while other stakeholders — such as investors, customers, regulators and employees — will want to know long-term economic costs, disruptions in supply and damages to the company’s reputation.
“I think that over the past 15 weeks we already made great strides in our public speaking skills and added a lot in our tool belt of what to take into the workforce,” said Austin Campbell, majoring in energy business and finance.
Professor of Energy and Environmental Economics Andrew Kleit, who co-taught the course with David Callahan, vice president at JLM Energy and Rigby, said he was initially skeptical that an approach designed for MBA students could work in a field of undergraduate engineers. But he soon found students were up for the challenge.
“We’ve covered catastrophes like nobody’s business. We’ve covered Enron and Exxon and mine disasters and train wrecks. And we had a smooth transition from in-person to Zoom,” Kleit said. “We showed that this class can work in all kinds of conditions. And I think the students have been so impressive. They truly are the masters of disaster.”
Rigby said the students’ strong showing in the challenge revealed they were up for the task and came away with the essential takeaways faculty members hoped for, all while dealing with a mid-semester shift to remote learning. That’s a testament, he said, to both the strength of the students and the faculty.
“Across the board, these students really exceeded my expectations,” Rigby said. “They had great board presentations. The video addresses were outstanding, and they carried themselves well during the press conference against a hard group of seasoned professionals. That’s a real testament to how well Andy and David did in teaching this class. From that, these students could really shine and do well in the face of these challenges.”