8 ms·

Oil companies scramble to find workers despite boom

34 points by lxm 5y ago

j7ake 5y ago
I recall back in the previous boom of 2006-2007 they were paying high school graduates $200k to work in the fields. They would even fly you in and you work a few days then fly you out. I wonder if salaries have changed since then.
- WhatsName 5y ago
  That's a wild guess and I have no insight into the industry, but I wouldn't be suprised if it's yet another race to the bottom? Labor seems to be one of the few things where supply and demand dont apply. Happy to be wrong.
  - jason-phillips 5y ago
    > Labor seems to be one of the few things where supply and demand dont apply. I don't understand this. From my perspective, the labor market in the United States today is possibly the best example of supply and demand mechanics.
    - oicU00 5y ago
      Adam Smith only mentions markets in the context of a free labor market. It’s the only supply and demand metric he ever describes. It was generalized into everything is a market, with jargon cottage industry springing up around everything; market is a hammer, and we pound nails.
      - gweinberg 5y ago
        That's not true at all. He talks a lot about land rent, and argues that at the end of the day a farmer who rents crappy land and a farmer that rents good land should make about the same, since the difference in rents will about balance the difference in yields. A tenant farmer is a small businessman, not an employee.
    - Spooky23 5y ago
      Lol. No. At the low end, the market is directly supported by welfare programs. In the middle, supply friction is distorted by health insurance. There are meaningful market forces at play at the upper echelon, but it’s more a social market than tied to actual business outcomes.
      - deleted 5y ago
        [deleted]
      - jason-phillips 5y ago
        Obvious distortions exist, the ones you noted, plus minimum wage and so forth. However, discussion to this point notwithstanding, I still believe it's the most exemplary mechanic of supply and demand today.
- fnordpiglet 5y ago
  They discuss wages. $45 / hour was average in the US. They’re losing people to Amazon driver jobs etc. It’s hard to empathize when clearly they could simply pay more.
  - sitkack 5y ago
    They make more money by shipping less oil, these pieces are placed to make it look like they are trying to increase supply which is not an incentive. https://www.theguardian.com/us-news/2021/jun/18/marathon-petroleum-job-cuts-pandemic-benefits https://www.theguardian.com/us-news/2021/jun/18/marathon-pet...
    - pseudo0 5y ago
      The problem is that if oil companies make multi-year investments to increase production, what happens if the Ukraine conflict ends in a few months and Russian oil is tolerated again, or OPEC ramps up production? Companies and investors are tired of repeatedly having the rug pulled out from under them, investing during high price periods and then eating losses when the price of oil falls. If the government wants more domestic oil supply, they will need to craft policy to encourage that, not just complain in press releases.
      - sitkack 5y ago
        Gas prices aren't high because of Ukraine, they are high because of oil company profits https://twitter.com/IAmPoliticsGirl/status/1518048366319480832 https://twitter.com/IAmPoliticsGirl/status/15180483663194808...
        pseudo0 5y ago
        I pulled up one example, Exxon Mobile. Their net profit margin is 8.21%. BP is at 4.8%. Meanwhile the average for the S&P 500 is at 12.4%. So if these companies decided to operate as non-profits, we'd see maybe a drop from $5.00 gas to $4.80 or $4.70 (assuming the whole discount gets passed on to consumers). Prices were already up before Ukraine thanks to the resurgence of demand post-covid, but it certainly didn't help. Also, please don't argue via linking obnoxious TikTok-style videos. If you have a point, make it yourself.
mistrial9 5y ago
every employment sector in the USA seems to attract intermediaries as fast or faster than the new workers.. the more imbalance or imperfect information, the more aggressive the intermediaries get in requirements, fees, conditions, oversight, control of recourse, control of information, access to new details, and more
jeffbee 5y ago
A climate change fighting strategy I've casually advocated for the last few years is every American with a documented history of wages from fossil fuel production gets $100k spot bonus for signing a contract that forbids them from working in that field again. It should be government policy that the oil, gas, and coal industry cannot find labor.
- UncleEntity 5y ago
  And if they save the earth from an asteroid they never have to pay taxes again?
- kodah 5y ago
  You do realize we'll still need fossil fuels even if we have a 100% renewable grid, right? A lot of people go to work in Oil because of a lack of opportunity. It's not like living in an oil field in a camper is a dream life anyway. 100k isn't going to solve those problems, you're just further marginalizing them with a facade of, "we paid the problem off!" The level of disconnection some folks have for the life experiences of others is astounding at times.
  - jeffbee 5y ago
    > we'll still need fossil fuels even if we have a 100% renewable grid For the record, I 100% do not concede this point. Also I spent my early years as a pipe welding man in Oklahoma, so if you think you speak for some kind of fuel-producing working class I am here to inform you otherwise.
    - kodah 5y ago
      No need to concede anything, it's just a fact. Oil is used for more than just energy, and those products won't be replaced in our lifetimes. You could try to bet on battery advancements beyond Lithium Ion, but we're a ways away from that too for your claims. The lazy conclusion that you can just throw money at a problem and make it go away is just that. Those people need to be retrained and will need support as they are retrained, 100k isn't going to touch that. I wasn't speaking for anyone, just a long standing belief I've had about most blue collar jobs that people want to elimate. I said the same thing when Hillary Clinton said something equally as callous to coal miners.
artificialLimbs 5y ago
My friend signed up for the oil fields back in mid 2000s. Pay was good, but they eventually got to a point where they didn’t need the extra prod and laid him and a bunch off. Might be a contributor to their current problem.
- Fargoan 5y ago
  That's how it always goes. There's always a boom and bust in the oil industry.
  - Frost1x 5y ago
    I'd say it's not exclusive to any industry, there's a push for all industries to have highly elastic labor forces to adjust labor costs with even slight variances in demand. Many of the labor shortages we see are a result of industries adopting business models that want high labor elasticity.
    - Fargoan 5y ago
      The oil industry is an extreme example. Everyone getting into it should know that. I've lived in North Dakota for most of my life and have seen it a couple of times.
wronglyprepaid 5y ago
I worked in oil and gas, in 2021 I quit after company started laying people off. Not ever considering going back. This industry is way too temperamental.
- nine_zeros 5y ago
  I think most industries could do way better by cutting exec and management pay during hard times than laying people off entirely. The layoff, rehire cycle is a clear demonstration of how management wants to have their cake, eat it too, succeeding at it for a short time and then complaining that they can't find any workers.
  - CydeWeys 5y ago
    My first company did that through the 2008 recession and it was really nice of them. Nobody got raises and nobody got bonuses (which significantly impacted higher-ups more as much more of their pay consisted of bonuses). The three co-founders barely even took any salary at all. But no one was laid off. All that happened was that one guy who had temporarily left to finish a master's degree wasn't rehired as expected (I think it also didn't help that he wasn't that good).
ProjectArcturis 5y ago
It's hard, dangerous, unpleasant work. And you have to live in small towns where the oil boom has raised the cost of living crazy high. And it's cyclical -- you might make $200k with a high school diploma this year, but in 2 years you'll be unemployed again.
henning 5y ago
> average hourly wages in the U.S. oil and gas extraction industry are still below pre-pandemic levels > We're competing against Amazon hiring drivers Nobody wants to work* now amirite?? *Nobody wants to work at your shitty oil rig in the middle of the ocean for peanuts
- alistairSH 5y ago
  Yup. I hear similar complaints from a friend in the food production industry (think Coca Cola). “We can’t find people!” “They all quit within a few months!” Not crap, it’s a hard job (welding inside a giant metal tank, etc) and the pay is good but not great. Even at a 10% premium, you’d be hard pressed to get people to take this job over driving for UPS (for example). Still physically hard, but more regular hours, union job, pay is decent, etc. And compared to just about any office job? No competition - most would pick the lower paying office job because it probably has A/C, more vacation, and roughly equivalent health care.
dabiged 5y ago
I am sick of hearing about labor supply problems in the hydrocarbon industry as it is a problem entirely of their own making. I was in the Industry for 12 years and in that time the industry laid off something like 40% of the workforce twice. Half of my ex colleagues had to drive Uber to make ends meet for years. I remember a reservoir engineer walking down the main street in the oil city I worked in with a board saying "qualified petroleum engineer will work cheap". I spent 4 years (and $$$) doing a master's of petroleum engineering whilst working full time. None of the 40 odd students I went through the degree with got jobs due to an industry downturn and all left the industry. We happened to graduate during a low oil price period. Too bad. So sad. 4 year degree down the drain. This affliction of no staff happens every boom, and the mass layoffs and industry exodus happens every bust. If the industry actually planned for this cyclical nature by avoiding overexpansion in good times and reducing mass layoffs in bad times this wouldn't be an issue.
- tedmiston 5y ago
  > If the industry actually planned for this cyclical nature by avoiding overexpansion in good times and reducing mass layoffs in bad times this wouldn't be an issue. I think that advice holds surprisingly well for most startups too. If only they followed it.
- _moof 5y ago
  Sounds like the airlines. Before the pandemic there was a serious pilot shortage. Then COVID-19 happened and they started laying people off. Now American is talking about a shortage again - I literally know pilots that American laid off last year!
- civilized 5y ago
  But do they need the personnel to produce? Maybe they just believe in making hay while the sun shines?
- mempko 5y ago
  Yeah, it sucks but the industry has no future. We need to get off fossil fuels because it's causing global heating.
- 5y ago
nyokodo 5y ago
If oil workers are essentially contractors in unpleasant environments then they should be paid appropriately, i.e. so highly that they can cover the off years with the good years, pay for their own insurance, and foster other lines of business for their downtime and for future career, etc. The era is now over of masses of cheap labor you can always draw on when needed.
- colechristensen 5y ago
  I’ve heard that there was fairly high pay but the nature and location of the work made it a kind of grind then leave for something more pleasant kind of situation.
  - Raidion 5y ago
    Depending on the worker, this is def true for the guys on the rigs. They make a ton, but have to live in what's basically a barracks in some emptiness in Dakotas/Canada/etc. I obviously think the solution is to pay more, but money has decreasing worth and having a significant other/friends/family near you is something that only feels more important the more money you have in the bank. It's not a simple problem for sure. Wonder how sites like Drillr (rig gig workers) are doing.
  - User23 5y ago
    Depending on the job the pay can be north of half a mil. For example the welders who work on live gas pipelines are very well compensated. Probably because the supply of lunatics willing to take a torch to a live gas pupeline is rather constrained.
seibelj 5y ago
All of the comments here are are exactly correct and how things should work in a free market. Dangerous work? Unpleasant circumstances? Boom and bust cycles? Excellent - pay should be stellar. I don’t care about owners bitching and moaning. This is capitalism and if they need labor then pay up.
fleddr 5y ago
Under-staffing, flexibilisation, wage stagnation, dodging benefits, there's no limit to what employers have asked of workers in this age of globalization. It has turned the relation to no longer be mutually beneficial, instead entirely asymmetrical. And all this while we're still expected to nod and be "loyal". After all, where else might we go? That question has been the basis for the abuse. But there's a new answer now. We do go. And don't come back. Poetic justice. Make good use of it.
mbrodersen 5y ago
It’s funny how commercial companies in competitive markets doesn’t understand that the job market is a competitive market too. So they need to compete against other companies to get workers. Instead they throw up their hands, making claims about people being lazy or whatever nonsense. Or they demand that the government does whatever it can to make life as miserable as possible for potential workers so that they have no choice but to accept whatever slave conditions the companies offer. That’s why companies in the US fight universal healthcare tooth and nail. Because universal healthcare will make workers less dependent on the mercy of companies.

34 points by lxm 5y ago

I recall back in the previous boom of 2006-2007 they were paying high school graduates $200k to work in the fields. They would even fly you in and you work a few days then fly you out. I wonder if salaries have changed since then.

WhatsName 5y ago
That's a wild guess and I have no insight into the industry, but I wouldn't be suprised if it's yet another race to the bottom? Labor seems to be one of the few things where supply and demand dont apply. Happy to be wrong.
- jason-phillips 5y ago
  > Labor seems to be one of the few things where supply and demand dont apply. I don't understand this. From my perspective, the labor market in the United States today is possibly the best example of supply and demand mechanics.
  - oicU00 5y ago
    Adam Smith only mentions markets in the context of a free labor market. It’s the only supply and demand metric he ever describes. It was generalized into everything is a market, with jargon cottage industry springing up around everything; market is a hammer, and we pound nails.
    - gweinberg 5y ago
      That's not true at all. He talks a lot about land rent, and argues that at the end of the day a farmer who rents crappy land and a farmer that rents good land should make about the same, since the difference in rents will about balance the difference in yields. A tenant farmer is a small businessman, not an employee.
  - Spooky23 5y ago
    Lol. No. At the low end, the market is directly supported by welfare programs. In the middle, supply friction is distorted by health insurance. There are meaningful market forces at play at the upper echelon, but it’s more a social market than tied to actual business outcomes.
    - deleted 5y ago
      [deleted]
    - jason-phillips 5y ago
      Obvious distortions exist, the ones you noted, plus minimum wage and so forth. However, discussion to this point notwithstanding, I still believe it's the most exemplary mechanic of supply and demand today.
fnordpiglet 5y ago
They discuss wages. $45 / hour was average in the US. They’re losing people to Amazon driver jobs etc. It’s hard to empathize when clearly they could simply pay more.
- sitkack 5y ago
  They make more money by shipping less oil, these pieces are placed to make it look like they are trying to increase supply which is not an incentive. https://www.theguardian.com/us-news/2021/jun/18/marathon-petroleum-job-cuts-pandemic-benefits https://www.theguardian.com/us-news/2021/jun/18/marathon-pet...
  - pseudo0 5y ago
    The problem is that if oil companies make multi-year investments to increase production, what happens if the Ukraine conflict ends in a few months and Russian oil is tolerated again, or OPEC ramps up production? Companies and investors are tired of repeatedly having the rug pulled out from under them, investing during high price periods and then eating losses when the price of oil falls. If the government wants more domestic oil supply, they will need to craft policy to encourage that, not just complain in press releases.
    - sitkack 5y ago
      Gas prices aren't high because of Ukraine, they are high because of oil company profits https://twitter.com/IAmPoliticsGirl/status/1518048366319480832 https://twitter.com/IAmPoliticsGirl/status/15180483663194808...
      - pseudo0 5y ago
        I pulled up one example, Exxon Mobile. Their net profit margin is 8.21%. BP is at 4.8%. Meanwhile the average for the S&P 500 is at 12.4%. So if these companies decided to operate as non-profits, we'd see maybe a drop from $5.00 gas to $4.80 or $4.70 (assuming the whole discount gets passed on to consumers). Prices were already up before Ukraine thanks to the resurgence of demand post-covid, but it certainly didn't help. Also, please don't argue via linking obnoxious TikTok-style videos. If you have a point, make it yourself.

mistrial9 5y ago

every employment sector in the USA seems to attract intermediaries as fast or faster than the new workers.. the more imbalance or imperfect information, the more aggressive the intermediaries get in requirements, fees, conditions, oversight, control of recourse, control of information, access to new details, and more

jeffbee 5y ago

A climate change fighting strategy I've casually advocated for the last few years is every American with a documented history of wages from fossil fuel production gets $100k spot bonus for signing a contract that forbids them from working in that field again. It should be government policy that the oil, gas, and coal industry cannot find labor.

UncleEntity 5y ago
And if they save the earth from an asteroid they never have to pay taxes again?
kodah 5y ago
You do realize we'll still need fossil fuels even if we have a 100% renewable grid, right? A lot of people go to work in Oil because of a lack of opportunity. It's not like living in an oil field in a camper is a dream life anyway. 100k isn't going to solve those problems, you're just further marginalizing them with a facade of, "we paid the problem off!" The level of disconnection some folks have for the life experiences of others is astounding at times.
- jeffbee 5y ago
  > we'll still need fossil fuels even if we have a 100% renewable grid For the record, I 100% do not concede this point. Also I spent my early years as a pipe welding man in Oklahoma, so if you think you speak for some kind of fuel-producing working class I am here to inform you otherwise.
  - kodah 5y ago
    No need to concede anything, it's just a fact. Oil is used for more than just energy, and those products won't be replaced in our lifetimes. You could try to bet on battery advancements beyond Lithium Ion, but we're a ways away from that too for your claims. The lazy conclusion that you can just throw money at a problem and make it go away is just that. Those people need to be retrained and will need support as they are retrained, 100k isn't going to touch that. I wasn't speaking for anyone, just a long standing belief I've had about most blue collar jobs that people want to elimate. I said the same thing when Hillary Clinton said something equally as callous to coal miners.

artificialLimbs 5y ago

My friend signed up for the oil fields back in mid 2000s. Pay was good, but they eventually got to a point where they didn’t need the extra prod and laid him and a bunch off. Might be a contributor to their current problem.

Fargoan 5y ago
That's how it always goes. There's always a boom and bust in the oil industry.
- Frost1x 5y ago
  I'd say it's not exclusive to any industry, there's a push for all industries to have highly elastic labor forces to adjust labor costs with even slight variances in demand. Many of the labor shortages we see are a result of industries adopting business models that want high labor elasticity.
  - Fargoan 5y ago
    The oil industry is an extreme example. Everyone getting into it should know that. I've lived in North Dakota for most of my life and have seen it a couple of times.

wronglyprepaid 5y ago

I worked in oil and gas, in 2021 I quit after company started laying people off. Not ever considering going back. This industry is way too temperamental.

nine_zeros 5y ago
I think most industries could do way better by cutting exec and management pay during hard times than laying people off entirely. The layoff, rehire cycle is a clear demonstration of how management wants to have their cake, eat it too, succeeding at it for a short time and then complaining that they can't find any workers.
- CydeWeys 5y ago
  My first company did that through the 2008 recession and it was really nice of them. Nobody got raises and nobody got bonuses (which significantly impacted higher-ups more as much more of their pay consisted of bonuses). The three co-founders barely even took any salary at all. But no one was laid off. All that happened was that one guy who had temporarily left to finish a master's degree wasn't rehired as expected (I think it also didn't help that he wasn't that good).

ProjectArcturis 5y ago

It's hard, dangerous, unpleasant work. And you have to live in small towns where the oil boom has raised the cost of living crazy high. And it's cyclical -- you might make $200k with a high school diploma this year, but in 2 years you'll be unemployed again.

henning 5y ago

> average hourly wages in the U.S. oil and gas extraction industry are still below pre-pandemic levels > We're competing against Amazon hiring drivers Nobody wants to work* now amirite?? *Nobody wants to work at your shitty oil rig in the middle of the ocean for peanuts

alistairSH 5y ago
Yup. I hear similar complaints from a friend in the food production industry (think Coca Cola). “We can’t find people!” “They all quit within a few months!” Not crap, it’s a hard job (welding inside a giant metal tank, etc) and the pay is good but not great. Even at a 10% premium, you’d be hard pressed to get people to take this job over driving for UPS (for example). Still physically hard, but more regular hours, union job, pay is decent, etc. And compared to just about any office job? No competition - most would pick the lower paying office job because it probably has A/C, more vacation, and roughly equivalent health care.

dabiged 5y ago

I am sick of hearing about labor supply problems in the hydrocarbon industry as it is a problem entirely of their own making. I was in the Industry for 12 years and in that time the industry laid off something like 40% of the workforce twice. Half of my ex colleagues had to drive Uber to make ends meet for years. I remember a reservoir engineer walking down the main street in the oil city I worked in with a board saying "qualified petroleum engineer will work cheap". I spent 4 years (and $$$) doing a master's of petroleum engineering whilst working full time. None of the 40 odd students I went through the degree with got jobs due to an industry downturn and all left the industry. We happened to graduate during a low oil price period. Too bad. So sad. 4 year degree down the drain. This affliction of no staff happens every boom, and the mass layoffs and industry exodus happens every bust. If the industry actually planned for this cyclical nature by avoiding overexpansion in good times and reducing mass layoffs in bad times this wouldn't be an issue.

tedmiston 5y ago
> If the industry actually planned for this cyclical nature by avoiding overexpansion in good times and reducing mass layoffs in bad times this wouldn't be an issue. I think that advice holds surprisingly well for most startups too. If only they followed it.
_moof 5y ago
Sounds like the airlines. Before the pandemic there was a serious pilot shortage. Then COVID-19 happened and they started laying people off. Now American is talking about a shortage again - I literally know pilots that American laid off last year!
civilized 5y ago
But do they need the personnel to produce? Maybe they just believe in making hay while the sun shines?
mempko 5y ago
Yeah, it sucks but the industry has no future. We need to get off fossil fuels because it's causing global heating.
5y ago

nyokodo 5y ago

If oil workers are essentially contractors in unpleasant environments then they should be paid appropriately, i.e. so highly that they can cover the off years with the good years, pay for their own insurance, and foster other lines of business for their downtime and for future career, etc. The era is now over of masses of cheap labor you can always draw on when needed.

colechristensen 5y ago
I’ve heard that there was fairly high pay but the nature and location of the work made it a kind of grind then leave for something more pleasant kind of situation.
- Raidion 5y ago
  Depending on the worker, this is def true for the guys on the rigs. They make a ton, but have to live in what's basically a barracks in some emptiness in Dakotas/Canada/etc. I obviously think the solution is to pay more, but money has decreasing worth and having a significant other/friends/family near you is something that only feels more important the more money you have in the bank. It's not a simple problem for sure. Wonder how sites like Drillr (rig gig workers) are doing.
- User23 5y ago
  Depending on the job the pay can be north of half a mil. For example the welders who work on live gas pipelines are very well compensated. Probably because the supply of lunatics willing to take a torch to a live gas pupeline is rather constrained.

seibelj 5y ago

All of the comments here are are exactly correct and how things should work in a free market. Dangerous work? Unpleasant circumstances? Boom and bust cycles? Excellent - pay should be stellar. I don’t care about owners bitching and moaning. This is capitalism and if they need labor then pay up.

fleddr 5y ago

Under-staffing, flexibilisation, wage stagnation, dodging benefits, there's no limit to what employers have asked of workers in this age of globalization. It has turned the relation to no longer be mutually beneficial, instead entirely asymmetrical. And all this while we're still expected to nod and be "loyal". After all, where else might we go? That question has been the basis for the abuse. But there's a new answer now. We do go. And don't come back. Poetic justice. Make good use of it.

mbrodersen 5y ago

It’s funny how commercial companies in competitive markets doesn’t understand that the job market is a competitive market too. So they need to compete against other companies to get workers. Instead they throw up their hands, making claims about people being lazy or whatever nonsense. Or they demand that the government does whatever it can to make life as miserable as possible for potential workers so that they have no choice but to accept whatever slave conditions the companies offer. That’s why companies in the US fight universal healthcare tooth and nail. Because universal healthcare will make workers less dependent on the mercy of companies.