The Phaserl


12 Signs That The Economy Is Really Starting To Bleed Oil Patch Jobs

by Michael Snyder, The Economic Collapse Blog:

The gravy train is over for oil workers.  All over North America, people that felt very secure about their jobs just a few weeks ago are now getting pink slips.  There are even some people that I know personally that this has happened to.  The economy is really starting to bleed oil patch jobs, and as long as the price of oil stays down at this level the job losses are going to continue.  But this is what happens when a “boom” turns into a “bust”.  Since 2003, drilling and extraction jobs in the United States have doubled.  And these jobs typically pay very well.  It is not uncommon for oil patch workers to make well over $100,000 a year, and these are precisely the types of jobs that we cannot afford to be losing.  The middle class is struggling mightily as it is.  And just like we witnessed in 2008, oil industry layoffs usually come before a downturn in employment for the overall economy.  So if you think that it is tough to find a good job in America right now, you definitely will not like what comes next.

At one time, I encouraged those that were desperate for employment to check out states like North Dakota and Texas that were experiencing an oil boom.  Unfortunately, the tremendous expansion that we witnessed is now reversing

In states like North Dakota, Oklahoma and Texas, which have reaped the benefits of a domestic oil boom, the retrenchment is beginning.

“Drilling budgets are being slashed across the board,” said Ron Ness, president of the North Dakota Petroleum Council, which represents more than 500 companies working in the state’s Bakken oil patch.

Smaller budgets and less extraction activity means less jobs.

Often, the loss of a job in this industry can come without any warning whatsoever.  Just check out the following example from a recent Bloomberg article

The first thing oilfield geophysicist Emmanuel Osakwe noticed when he arrived back at work before 8 a.m. last month after a short vacation was all the darkened offices.

By that time of morning, the West Houston building of his oilfield services company was usually bustling with workers. A couple hours later, after a surprise call from Human Resources, Osakwe was adding to the emptiness: one of thousands of energy industry workers getting their pink slips as crude prices have plunged to less than $50 a barrel.

These jobs are not easy to replace.  If oil industry veterans go down to the local Wal-Mart to get jobs, they will end up making only a very small fraction of what they once did.  Every one of these jobs that gets lost is really going to hurt.

And at this point, the job losses in the oil industry are threatening to become an avalanche.  The following are 12 signs that the economy is really starting to bleed oil patch jobs…

#1 It is being projected that the U.S. oil rig count will decline by 15 percent in the first quarter of 2015 alone.  And when there are less rigs operating, less workers are needed so people get fired.

#2 Last week, 55 more oil rigs shut down.  That was the largest single week decline in the United States in 24 years.

#3 Oilfield services provider Baker Hughes has announced that it plans to lay off 7,000 workers.

#4 Schlumberger, a big player in the energy industry, has announced plans to get rid of 9,000 workers.

#5 Suncor Energy is eliminating 1,000 workers from their oil projects up in Canada.

#6 Halliburton’s energy industry operations have slowed down dramatically, so they gave pink slips to 1,000 workers last month.

#7 Diamondback Energy just slashed their capital expenditure budget 40 percent to just $450 million.

#8 Elevation Resources plans to cut their capital expenditure budget from $227 million to $100 million.

#9 Concho Resources says that it plans to reduce the number of rigs that it is operating from 35 to 25.

#10 Tullow Oil has reduced their exploration budget from approximately a billion dollars to about 200 million dollars.

#11 Henry Resources President Danny Campbell has announced that his company is reducing activity “by up to 40 percent“.

#12 The Federal Reserve Bank of Dallas is projecting that 140,000 jobs related to the energy industry will be lost in the state of Texas alone during 2015.

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7 comments to 12 Signs That The Economy Is Really Starting To Bleed Oil Patch Jobs

  • rl

    Snyder once again brings the drama.
    All are popping the doom viagra over the patch.
    While the pain is coming right now the locals are working and good hands are being shifted around by the co’s. WYO to ND etc.
    I have boots on the ground in the bakken and as always the old timers told the new breed to hold on to their cash for the next crash. They didnt listen like they never do and we all had to learn. People that were smart about it and can are getting out of town and going home ahead of the herd, south to oilfield graveyards they came from. Others who can are hanging on. Work is down 40% if I had to guess and these co’s always have the shutdown list/order in their back pocket good times or bad.
    All states will get people coming home looking for a j-o-b. The farmers and biz here have been crying for years as no help could be found and any help had to be paid 15-20 to stick around.
    Always they have paid nothing, $10 jobs the norm and pricks signing paychecks is kinda the ND old school way. Never before have people in upper management spots etc. lived this well or made this much here and the change of cohesion is palpable if one is able… they cant hardly hold their glee at having the upper hand finally and again. People who are outside the patch are saying people are being let go and replaced at old wages; once survivable paychecks to return and surviving undoable.
    This is the whirlwind top be reaped.

    Existing drill budgets are being spent, if trimmed, and those wells capped. This will be done now and while equipment and pipe etc. is on hand. They will drill it and shut it in and wait to return if and when. People who have become overnight rich from leasing their land will be wiped if they went cash credit crazy. Some did where old Nd types are tight as dicks hat band and will be ok.
    The water table is beyond repair yet they ALL stick their head in the sand whenever that noise comes around.

    Many of us know when Schlumberger starts parking trucks its time to do the laundry and be ready to pack. The trucks and being parked.
    Production is pacing itself and only where necessary. Cherry picking to keep flow from sanding over , requiring service, etc. will be the case. The state here is all in and 100s of millions have been changing hands for the ‘good of the economy’, state-county politico crooks all back dooring the patch with our interest free for them money; small towns blown up and millions floating around in the process. A couple thousand of empty “units” , 12-1400 dollar rentals will never be rented. Empty for tax games to follow. ND was heaven until the libtards got here and got in per the sheeple, most of them oilpatch arrivals driving the new suv while hubby stacks the bank. We were the last to have any smoking bans for example and now we are full tilt brain dead and commie like their hero MN, our eastern comrades where taxes and fees are for the children bullshit never stops. One thing of notice here, as in dc, the old boy “conservative” types throw their hands up to the native grumblers and take the money right along with the sheep herders. Both sides of the isle get paid and play games over laws and codes and still are for exanple with flare gas. NO law, no money, and the majors know it and greased accordingly while doing as they want until laws catch up. The RE boom in places like Bismarck will be the tell. Inventory is high but not excessive. New houses all over for the last 3-4 years and when they dont sell and foreclosures start it will be like all the others busts except fools with mortgages a long way from home is the case now as the only game in town came here and they call it home now. It is fair to say 60-70% of all new properties have been bought by out of state arrival oilfield working dollars. ND was trashed when the tards and crooks took over and the patch was their gravy tain. The patch will be the crash culprit for us and the world if oil holds below 80 for more than 6 months. Many a mouth piece has carried the 40 is ok line on tv and radio, and Ive had that conversation to many times to count over the last 4 years. Deaf ears all around. The state is basically doing a bailout saying it is month to month.

    Dont get yourself warped and wrapped up in it… 3-6 months will tell while the job losses are a shame. Derivitive dollars wont stop the flow of itself. Wiping out fools with money wont keep 80 dollar oil in the ground. And 80+ oil will return even if its only in the ussa. It is thought the new breed of hands will not go gracefully, man up as it were, so we will see if any of that plays out as security will be the last to go. But if you want to buy a 1-2 year old pick up on the cheap that some kid paid 60 for, there coming down the pike.

  • Gnostic

    I remember in the 70’s you could buy a brownstone for $1-<$15,000, Now worth Millions, Post Clinton & Mt Sinai Hospital driving a gentrification. Perhaps, Detroit is a good buy? Henry Ford would be proud.

  • Gnostic

    OOOps, In Harlem, NYC.


    rl, enjoyed the post. “Are the good times really over for good?”

  • rl

    Yes and No CAJUN,
    Only because they have shown since 08 they can do whatever they want when they want.
    Freakshows keep it all rolling along and here and other places have what they want and have what they need. $4 gas will return with $8 gas the goal and target for the last 20 years. It was the norm in Europe and it will happen here when ‘supply drops’, demand china, or some other blah blah gets going and all but the top of the chain is long gone and wiped out. Kindly leaving servicable leases and locations behind. With barrels and money in the ground for the weening… the big boys pump less and possible make more and the patch will be manned accordingly.
    Peak oil nonsense and misunderstanding will never quit and be ramped up accordingly like it always was before the amazing bakken showed on the screen. Problem solved, Halaluyah!
    50 years ago they tapped holes, packed out, boom-busted it 20 years ago, and waited…
    Now they wait again.

    Good times depended whether you were buying or selling as always. Some drank the cool-aid clueless as always, all in and ass up. Many simply chose to do the old if you cant beat em join em; greed was the game across the economy. Many here were shocked early on at their ‘fellows’ who jumped on board in all sectors of economy. Old ideas of decency or fair dealings in commerce were also a lost byproduct of this boom.

    This was THE last and final round of a good job. This is what we are witnessing.
    And timely it is free money TO themselves with never bankruptable eternally owed student loans for butts in seat and minds worked over like a $6 chicken from the local grab and gag. Cash for college mind controllers and fellow useful idiots, with the real egomaniacs or desciples just about manic to be sooth sayers for the money flown in from washington.
    Master plans never quit rolling along from top to bottom in their own wake.
    Good times or bad are just their contrived by product in perpetuity for the last 100 years, only now it is crash and grab time.

  • Gnostic

    A brief explanation of #Trolls, #SockPuppets, #Hasbara Shills and a look at who’s behind them.

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