With demand rising dramatically, oil companies are finding it hard to fill positions to get to the supply.
Oil companies are so desperate for workers that one producer in Oklahoma is recruiting released inmates at the prison gates. Producers in Alaska, meanwhile, are banding together to get workers trained; in Texas, they are calling former hands and asking them to come back.
With crude oil prices having recovered, some oil companies looking to drill are finding themselves helpless in the face of a shortage of experienced hands.
"There's nobody to work," said Dewey Bartlett Jr., president of the Oklahoma Independent Petroleum Association. "After the last industry downturn, many people said, "That's it. No more. I'm going to learn a new trade.' They are gone.
"One operator told me that he had become so desperate for experienced employees that he knows when the prison releases the parolees. He stands outside the gate and asks anyone if they want a job," Bartlett said.
There were 25,381 oil and gas workers in Oklahoma in the third quarter of 1999, the most recent available, compared with 30,931 for the same period two years earlier, the Oklahoma Employment Security Commission reported. Similar declines have been reported in New Mexico and Texas.
But with oil prices having nearly tripled from early last year _ trading Monday at around $29 a barrel on the New York Mercantile Exchange _ more and more rigs are coming online. And they need workers.
According to Baker Hughes Inc. of Houston, last week the number of rigs actively exploring for oil and natural gas in the United States was 849. A year ago, with oil prices hovering in the mid-teens, only 518 rigs were drilling.
The biggest increases have occurred in Texas, which jumped from 177 to 308, and in New Mexico, up to 80 from 34.
Ray Peterson of UTI Drilling in Midland, Texas, said his company has been calling former workers and asking them to come back.
"It's the same old story whenever you lay them off, hire them back, lay them off and hire them back _ you can expect people will leave," said Peterson, a senior vice president. "We're just doing the best we can to get the word out to those who left our industry that there is business again."
About 3,000 Oklahomans were laid off because of declining oil prices in 1997 and 1998, while Texas lost 14,600 jobs and Louisiana 3,400 positions. In total, 29,300 people lost their jobs in the major oil producing states, according to the Interstate Oil and Gas Compact Commission.
Although the oil industry is still recovering from the two-year bust, the rest of the economy soared. The unemployment rate, meanwhile, has fallen to a 30-year-low, making it harder for oil producers to fill shaky positions.
"There's equipment out here, but there's not people to do it," said John Bell, an independent producer and consultant based in Kermit, Texas.
In Alaska, companies that haven't had to do serious recruiting in 20 years have banded together to train workers for the estimated 500 jobs expected to open over the next decade.
The average worker on the North Slope is 50, said Kitty Farnham, director of Alaska hiring and training for BP Amoco. "We are suffering from really more of an aging issue and the fact careers have not been marketed," she said. "The jobs are excellent jobs."
In Oklahoma, some producers have been able to afford higher wages to attract experienced oil workers, but many are left without options. The wait to drill a new well in Oklahoma has been from one to 12 months.
Unskilled laborers such as roustabouts make about $7.50 per hour, including benefits, OIPA's Bartlett said. Other skilled positions, such as roughnecks and rig operators, would pay on average $10 to $12.50 per hour.
The need for workers couldn't come at a worse time. Just to meet demand, Oklahoma needs to almost double its active rigs within the next three years, said Bruce Bell, chairman of the Mid-Continent Oil and Gas Association of Oklahoma.
"Those people who left are not about to come back to a job that may not be secure," he said. "We just may not be able to meet the oil demands we have."
(Chart text not provided electronically, please see microfilm.)