WICHITA FALLS, Texas – While the price per barrel of oil continues its downward trend, the number of unemployment claims by workers in the oil and gas industry has gone up.
Texas Workforce Commission data shows 6,814 oil and gas workers filed unemployment claims from Nov. 1-Feb. 19, while the total number of claims filed in the state was almost 25,000 during that period. The North Texas area, which includes Wichita Falls, had 421 claims, about 21 percent of the 1,990 filed.
Alex Mills, president of the Texas Alliance of Energy Producers, said the first jobs to go are typically in the service and supply sector that supports drilling operations. He said the rig count, drilling permits and well completion rate are all down, reducing the need for specialties such as roustabouts, roughnecks, drilling mud, drill bits, pipe suppliers and hydraulic fracturing, he said.
“All three of those are key factors in many of the service companies that do work on drilling and completion operations,” he said. “Those are usually the first ones to go.”
The Permian Basin area was the hardest hit with 2,093 oil and gas unemployment claims, followed by the Coastal Bend region with 1,568.
Mona Statser, executive director of Workforce Solutions North Texas Board, said offices in her region, specifically Bowie and Graham, have been “slammed” by workers who have filed for unemployment benefits and are now looking for work. She said people have to make at least three contacts with businesses to keep receiving benefits.
The state is also looking at different ways it can help the unemployed find work.
“There was a consensus, because we’ve seen it before, that people who are making that much money in the oil field don’t want to go right into training. They’re hoping they’ll get another job or their old job will open back up,” Statser said. “What the state’s trying to figure out is whether they should free up some additional money for training.”
She said it was decided during a conference call that the regions had money to cover training costs. What region heads did say was they needed additional help to handle the workload.
Mills said folks shouldn’t expect to see much of a change with oil- and gas-related jobs until there’s a turn around in prices.
One thing that could perpetuate a turn around is if the federal government reversed a law enacted in the early 1970s during the Middle East oil embargo. He said the situation has drastically changed now that there is a historic oversupply of U.S. crude oil in storage waiting to be refined.
“That’s caused the softening of the price” per barrel of oil, Mills said. “What producers now are telling Congress is that there is no free market (for U.S. crude oil). We cannot participate in the market overseas because of the restriction on crude oil exports.
“That’s creating a dramatic oversupply here, forcing prices much lower than they normally would be.”
Mills said lifting the ban on crude oil export wouldn’t happen overnight. He said the House and Senate in Washington, D.C., might pass something, but he doesn’t know which way President Barack Obama would go.
This article was written by John Ingle from Times Record News, Wichita Falls, Texas and was legally licensed through the NewsCred publisher network.