economy isn't that bad for chemical engineers, if you're flexible. seeing as you said you were originally petroleum, you should have no problem getting a job. the only chemEs that have problems getting jobs are the ones only willing to take a job in semiconductors or pharmaceuticals and in specific locations.
while the market is tougher than normal, if you're willing to move, work you way up (not with a fortune 500 company), earn less initially, you can find a job no matter what field. of course don't expect to get a 2.5 gpa and find work very easily, get a 3.0 or higher and you should be set. also try and do internships with various sectors every summer and different types of research during the school year. it broadens your view and opens your horizons.
i wouldn't do petroleum engineering, since it's not very flexible. a cheme degree can provide gateways to more industries: petroleum, chemicals, semiconductors, biotech, food, utilities, defense. basically any job which involves processing most likely with liquids and gases. solids are probably meche, but that's just parts which aren't made in the US anyway.
petroleum will be around for the next 50 years, unless some physicists finds a new ore to extract. and that will need chemes too, since you have to convert stuff. while refineries don't hire too many, they are pretty constant. once you're in the business, you will always have a job. when the economy improves, they will be begging for students, since most like "innovative" industries like semis and biotech. however, you better plan on moving outside california if you want to work in oil/refineries. think the south. texas, louisiana for gasoline possibly northeast and midwest. overseas if you like oil.
i wouldn't do chemicals, because those are having tons of trouble competing with the rest of the world. if you do like chemicals and plastics get a phd and do research.