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12 Signs That The Economy Is Really Starting To Bleed Oil Patch Jobs
Submitted by Michael Snyder via 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.
And of course it isn’t just workers that are going to suffer.
Some states are extremely dependent on oil revenues. Just take the state of Alaska for instance. According to one recent news report, 90 percent of the budget of Alaska comes from oil revenue…
But oil is also a revenue source in more than two dozen states, especially for about a third of them. In Alaska, where up to 90 percent of the budget is funded by oil, new Gov. Bill Walker has ordered agency heads to start identifying spending cuts.
Sadly, it looks like oil is not going to rebound any time soon.
China, the biggest user of oil in the world, just reported that economic growth expanded at the slowest pace in 24 years. And concerns about oversupply drove the price of U.S. crude down another couple of dollars on Monday…
Oil declined about 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.
U.S. crude, also known as West Texas Intermediate or WTI, settled 4.7 percent lower at $46.39 a barrel, near its intraday bottom of $46.23.
There is only one other time in history when we have seen an oil price crash of this magnitude.
That was in 2008, just before the greatest financial crisis since the Great Depression.
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Still probably not as bad as bleeding out of your ass! remember Ebola!
Just put a big tampon on it and buck up
In order to save US oil jobs, Canada will be bombed.
Just think of the construction opportunities!
Just try it, we'll have our 8 beaver powered subs and 13 Ukranian made fighter jets on your ass within 24-48 months, once we raise enough money having a MASSIVE sale on maple syrup and getting Wayne Gretzky to sign 1,000,000 hockey sticks we figure we can sell on EBay for $50 each.
Don't mess with Canada eh.
Don't forget the sea king helicopters eh. Those are our pride and joy!
also dont forget all of your Beaver and Otter pontoon planes......slow but effective...
Back bacon FTMFW!
I think most people would love that.
but its obvious to me, no matter what people say, THE LOWER OIL prices is good at the pump, gets better for companies, and very very good for teh economy technically speaking.
We have not seen the effect of this yet, but soon will rest assurd. And for other sectors like BIOTECH, will help them goin higher, already up 30% and looks set to go much much much higher in 2015....
check out BIOTECH – CHART here==>http://bit.ly/1fMcakI wow.
But it's different this time....again.
It's always different. the problem is they point out the obvious but there are a lot more problems in the pipeline and this is just round one.
Is it me or are these posts getting a bit obvious?
No shit Sherlock, oil jobs are getting cut. I pity all those ChemEs.
I'm waiting for an Article about how these low oil prices affect the "World is running out of oil" meme and how this impacts the environmentalist movement and Gov spending on alternative energy.
Alternative energy will be slammed. So will turning food grains into ultra expensive ethanol for gas mixing. Low oil will last until the low price producers kill off the high cost marginal producers. Frackers, Tar Sands, Deep Water, Arctic, and all alternative energy.
Don't worry, this is not permanent, it will be a time not so far off when we will discuss the spike in oil prices, and invetment opportunites in shale oil and Tar sands.
One thing though. The oil bust has yet to reap havock on the financial world of bonbs, bank loans and hedges. The several hundred billion in bad debt will blow up in the faces of many major banks and investors, hedge funds and Mom and Pop retail yield chasers.
Australia-based BHP Billiton Ltd. (NYSE: BHP), which has a significant Houston presence and is the largest foreign investor in the domestic shale boom, will cut spending on U.S. shale this year.
http://www.bizjournals.com/houston/morning_call/2015/01/largest-foreign-...
Hopefully this oil bust doesn't affect the porn market
Very long porn..tons of out of work potential actors and cheap oil based lubes.
86' in Tulsa - after all the BK's of oil cos and service cos even the law firms went Bankrupt!
Bloomberg reported that the job cuts are part of a restructuring, and a spokesperson said cuts will be made across the company. In its earnings release, the company said it is taking a pretax restructuring charge of $313 million to "improve operating efficiencies."
http://www.businessinsider.com/american-express-fourth-quarter-earnings-...
Heck, unlimited porn for free on the internet. More than you could look at in several life times.
Whores are getting cheaper south of San Antonio.
Sign of bad time coming....or is that good times cumming?
With all this RESETTING of prices since QE began WHAT exactly resets the 18 trillion of debt and the Fed Balance sheet? AU maybe
World War.
So the FED blew up another bubble and it is now popping? Cry me a river, of oil. Next up, the stock market! (Or maybe Housing, Education or Auto)
Don't limit yourself, everything is on the table and everybody will get to play before it's all done.
Hey. lots of people have been playing for a long time. Whats so special about overpaid oil patch workers? I say let them join the crowd of those who have been getting fucked over for years. Im sure the author of this article didnt shed any tears when the food service people didn't get a raise in their minimum wage or did he? Did he give a shit when skilled manufacturing labor got a pink slip and their job headed to China? You're right, everybody might get to play, including media whores I hope.
The Fed itself is a bubble, I wonder who will blow this one. But I am getting ahead of myself, next bubble Fed will pop is the one in gold, it will be blown to the upside courtesy or evaporating 'asset' side of their ginormous balance sheet.
Have no fear, regardless of jobs lost the Bureau of Lies and Scams (BLS) can make the numbers look like the unemployment is going down.
When these people are unemployed for longer than 6 months they'll be labeled as discouraged and will no longer be counted as unemployed.
It hasn't really kicked off yet, Oh, but it's about to.
Fortunately, we have two moar years to go... By then the jobless rate will be close to zero, and no body will have a job.
Mission Accomplished Barry.
Indeed...
Yes it has. Look at Craigslist and see how many newer trucks with all the trimmings and options are being sold for below market level in Texas, Dakotas, and anywhere there is (Was) drilling going on.
I believe that would be the "Craigslist Autos for sale" index.
Short Truck Nutz™.
Sorry man, I was laughing so hard I accidentely pressed the down arrow :)
Craigslist is packed with brand new stuff being unloaded by people who are getting slammed by this Robust Ekonomy combined with the sudden crash in oil prices [and massive job cuts across the board]. As this plunge ripples out you'll see restaurants, movie theaters and even some donut shops shut down due to the slash in customer base.
Crazily, I see too-many-to-count new car wash places being built all over the place. WTF?! My Dad tells me they're probably money laundering operations and maybe he is right.
In Arizona car washes were not a bad place to ask about picking up a dime bag if you were new in town.
And here's the posterboy ad:
Real nice truck. Black leather interior power everything. Has a 6 inch lift with 37 inch tires. Has H&S tuner with 5 inch afe exhaust. TRAVELING it gets 21 miles to gallon. I am looking to move back to Michigan that's why I am trying to sell it. [asking price of $50K for a 2012 pickup]
What kind of little dick shit kicker buys that truck?
Probably the same one that thinks a form of transportation is a status symbols and blew all of his income snorting lines off of some dirty whores tit's.
I work for a company that supplies silica sand (and resin coated sand) for the fracking industry. We're seeing noticeable slowing in the frac sand market right now. No layoffs yet; but everyone's getting nervous.
This is what happens when cartels lose their grip. Supply and demand my ass. Anyone with a well is now scrambling head over heels to make money on volume rather than margins. We're seeing the true value of a barrel of oil. Bring it on. The real shame is how long we've been bilked.
Is this worse than the dotcom bubble pop? Maybe. But it looks like the financial part is hidden in the debt and not the stocks.
Ah, yes...."ye olde middle class is strugglingly mightily" meme.
What "middle class" is that?
Let me guess..."THE ONE THATS GONNA PAY FOR ALL THAT DEBT!"
Yeah, right. "Hence the meme."
The progression is inviobale: commodity collapse, currency collapse, DEFAULT.
The worker is NOT the one who spent all the money.
He EARNED the money and it was STOLEN from him.
Gold will not resolve this issue though I certainly understand those who buy it now.
A "fiat implosion" is well underway now.
In ALL "monies."
The Fed will normalize because it must.
There are no dollars now only DEBT.
Better give that heavy duty shit a rest man. You don't make a bit of sense when u're on that stuff.
#13 Strippers and hookers are packing up and moving back to Michigan.
$100,000/YEAR?
Is not "middle-class"!!!!
If you have been making $500,000 a year for a 20+ years $100,00 a year is lower middle class.
But if you have been making $25,000 a year, $100,000 a year is a wet dream.
I dream of the day [and so does my dad] when I move out of his Basement. $100k/yr would be very nice. I could start looking at trailer homes.
My Uncle:
$1055 cdn/day rate for his labour
$135 cdn/day rate for his quadrunner
$185 cdn/day rate for accomodation
$55 cdn/day rate for meals
Pipeline inspector, esquire.
Eons ago, he lucked out as the big line was being built through northern ontario, he was too lazy for real work so he got shuffled into inspection, made big coin for a few years and then spent the next 10 on welfare, finally landing a plum position as groundskeeper willie on a local golf course for $12 bucks an hour.
Enter the financialization of everything, the big run up on commodity prices and voila, back in the big bucks. Since his return in 05/06 he has probably made $2 million NET, was home 08/09 and 09/10 and selling off toys to make ends meet, it picked back up and hey, back in the big bucks...
Over xmas he was expressing his gratitude that natgas prices hadn't cratered...what is that saying? It is difficult to get someone to see reality when their livelihood depends on fantasy.
Now multiply this story times a couple hundred thousand.
Mark... I down voted you at first, but once I saw that you have been on ZH for over 5 years,
I changed it to an up vote. Your post gives great insight to what is really going on in the oil industry.
Sounds like your uncle has a saving vs. spending problem.
Sadly, it looks like oil is not going to rebound any time soon.
This is the big question. If output from shale drilling falls off rapidly, then prices might go up fairly soon. But whether that is 6 months, or a year or two is hard to guess. We will need to watch production figures and wait for them to start falling.
And if a recession hits, that would certainly delay the rebound.
The energy sector seems to be following a reasonably predictable commodity cycle, and the cycle summations suggest continued overall negative pressure on prices, at least for the next couple of quarters.
Fortunately every body who has a high paying job, knows enough to sock away a lot of cash for emergencies
Hahahaha...! Those around here migrated to Fort McMurray Alberta for work, leaving their trophy blonde wives, houses and kids here...when they're back they spend their money on quad bikes, Netflix, $50,000 pickup trucks, MASSIVE McMansion mortgages, cell phones for everyone and eating out all the time....
We want to know about the trophies when hubby is off making the big bucks.
Ask Sancho, he's the one banging the trophy wives and drinking the husband's beer while he's away in the field...
Buying opportunities on the way.
Ba-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-
99 weeks of funemployment+2 years of CC and they will be back in the workforce. As cab drivers.
Here it is 19 weeks at a max of $380 (taxable) per week, because the economy in Western NC has 'recovered'.
that 99 week shit (back then NC paid $580/week) is so 2008 or as Fergie once sang "2000 and late".
Yea! Free market economics at work! Supply and demand! Stuff you libertarian tards all believe in, until you don't!
Who ever said I believed in protecting oil patch jobs. These oil workers can move and/or take on employment in other fields. Those who stayed in man camps or in company provided housing can amscray and should have tens of thousands saved up to tied them over. (Key words: Should have.) Those who bought a house in western North Dakota these past couple years are well and truly fucked, and there's nothing to feel sorry about....becaue it was obviously dumb, even in foresight.
So glad I didn't head out to North Dakota this past summer/autumn. I'm content with life here, even in the liberal east, even on less than 100k/year.
It's a golden age for the repo business... one that will never end.
1930's all over again. Suckit Okies.
There will be a severe knock on effect. The states that budgeted for oil revenues and taxes from high paid oil workers, will now see state income plumet. This means budget cuts in state spending across the board. Teachers, Cops, administrators, civil servants. The there are the service sector jobs that serviced highly paid oil workers. Bars, restaurants, whores and drug sellers. Don't forget New Car dealers who sell all those high paid oil workers those huge trucks they like to drive. And housing, land lords stuck with apartments just built, and housing, no more high paid oil families looking for McMansions. You gotta know, the knock on blow back will be much, much more than just the oil service workers. North Dakota was held up as the new American dream, well, I been there, and without high pay, there is no dream out in that cold, treeless open tundra. Take out the 100K jobs, and it's back to a frozen hell, and flat boring plane. It's not all that far from where I live, except I live east into Minnesota where the boreal forest and mining and timber are the base economy.
Oh like Enron and California?
LMFAO @ Jack.. Hey Man, do you really beleive what you type? States will cut budgets, and trim the fat?? If you really are from MN. you would know better. The cocksuckers will simply borrow more and then raise property taxes to pay the bill. Has it ever been any different? And I think ND will be a hell of a lot nicer place without the $100,000 jobs. And I know quite a few who live there that tend to agree.
Housing bubble redux?
Municipalities seeing housing prices rising, raise property taxes, and massively expand government.
Housing values tank and they have to reduce taxes. But now they can't pay for all the expanded buildings, payrolls, health care, retirements etc.
Since they can't print money like the fedgov, they do the one thing the can: point their guns at us and demand payment.
Repeat after me: fraud backed by violence.
Lost jobs from out in neo-con supporting sheeple land.
Right on schedule.
Next up, CIA-Obama's morality scandal to unite all the neo-con sheeple together.
Then comes the recruitment for the CCC like, but with a gun, neo-con ReadyReserve "Brownshirts."
Then on to 2016 and the christening of one part rule.
The bankster need to repay us.
When they come for your gold and guns, they'll look just like you.
Except for the badge.
And hopefully with more than three orificies and a case of terminal lead poisoning.
This will be difficult to contain but I'm more curious about how US's allies in the ME are going to unwind their "alliance".
Prediction. Saudi Arabia Spring this Spring.
EDIT:
Could be a set up to lay the path for another Bush in the WH. Just a thought.
An impending $71.8 million budget shortfall could force Harris County's primary public health agency to close school-based clinics, cap other services and eliminate jobs, agency leaders said Friday.
Board members of Harris Health, formerly known as the Harris County Hospital District, recoiled at the prospect of drastic cuts in patient care or a return to long waits for treatment.
http://www.houstonchronicle.com/news/health/article/Harris-Health-consid...
It ain't only the earl sector. Health care systems are still floundering trying to cope with massive paperwork and also adapt to Obamacare. Wait until the oil crumble trickles into healthacre in relevant states.
BTW, Harris County is where Houston be.
I bet they still have thousands of Illegals using the emergency rooms today...and dont pay for a thing...
They will increase speed traps and checkpoints, for your safety of course.
Bottom Line: QE is heroin
If you talk to the Denver guys they'll smile at you and say : NOpe it's WEED and it gives us SPEED.
We r loving all those Marijuana mangroves now sprouting in Coloooooorado !
I think Mario likes Euro weed ! He must ski in Aspen !
waving hands WIDLY!!
Does anyone have a breakdown of these job layoffs BY STATE???
I would like to know what this will mean to housing prices as well as broken rental agreements etc etc etc.
ANYONE?
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Get ready to long UWTI!!
•?•
V-V
Obama has a Dream ... err Shovel
But but but they said that cheap oil will make people buy more stuff.
but but but 2015 is gonna be a banner year for the US economy.
Jamie and Potus both say it.
And Draghi's QE will add liquidity for....the UK and Us economies.
That's the take in MSM (Market watch).
So what's there to be afraid of?
Well, this painting contractor reports i haven't laid any oil paint down in weeks, going long spring here...
There are going to be some houses in Canada taking a hit pretty soon....their housing bubble is still going on....its due a pop...
the houses will be fine; the owners of the overvalued lots and their creditors, not so much...