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Black Market For Black Gold Ignites As Jobless Roughnecks Resort To Oil Theft
The allure of ill-gotten oil money remains strong. The lull in drilling has given oil companies more time to scrutinize their operations -- and their losses. As Bloomberg reports, during booms "they are moving at such a rapid pace there’s not a lot of auditing and inventorying going on," said Gary Painter, sheriff in Midland County, Texas, in the oil-rich Permian Basin; but "whenever it slows down, they start looking for stuff and find out it never got delivered or it got delivered and it’s gone." From raw crude sucked from wells to expensive machinery that disappears out the back door, drillers from Texas to Colorado are struggling to stop theft that has only worsened amid tens of thousands of lost roughneck jobs.
The moon was a waning crescent sliver Sept. 9 when a man emerged from an oil tanker, sidled up to a well outside Cotulla, Texas, and siphoned off almost 200 barrels. Then, he drove two hours to a town where he sold his load on the black market for $10 a barrel, about a quarter of what West Texas Intermediate currently fetches. As Bloomberg reports, Oil theft is as old as Spindletop, the East Texas oilfield that spewed black gold in 1901 and began the modern oil era... but once again, amid soaring unemployment, it is getting worse...
The lull in drilling has given oil companies more time to scrutinize their operations -- and their losses.
During booms “they are moving at such a rapid pace there’s not a lot of auditing and inventorying going on,” said Gary Painter, sheriff in Midland County, Texas, in the oil-rich Permian Basin. “Whenever it slows down, they start looking for stuff and find out it never got delivered or it got delivered and it’s gone.”
“You’ve got unemployed oilfield workers that unfortunately are resorting to stealing,” said John Chamberlain, executive director of the Energy Security Council.
In Texas, unemployment insurance claims from energy workers more than doubled over the past year to about 110,000, according to the Workforce Commission. In North Dakota, average weekly wages in the Bakken oil patch decreased nearly 10 percent in the first quarter of 2015, compared with the previous quarter, according to the Federal Reserve Bank of Minneapolis.
With dismissals hitting every corner of the industry, security guards hired during boom times are receiving pink slips. That’s leaving sites unprotected.
“This is like a drug organization,” said Mike Peters, global security manager of San Antonio-based Lewis Energy Group, who recounted the heist at a Texas legislative hearing. “You’ve got your mules that go out to steal the oil in trucks, you’ve got the next level of organization that’s actually taking the oil in, and you’ve got a gathering site -- it’s always a criminal organization that’s involved with this.”
From raw crude sucked from wells to expensive machinery that disappears out the back door, drillers from Texas to Colorado are struggling to stop theft that has only worsened amid the industry’s biggest slowdown in a generation. Losses reached almost $1 billion in 2013 and likely have grown since, according to estimates from the Energy Security Council, an industry trade group in Houston. The situation has been fostered by idled trucks, abandoned drilling sites and tens of thousands of lost jobs.
The allure of ill-gotten oil money remains strong.
In April, the Weld County Sheriff’s office in Colorado recovered almost $300,000 worth of stolen drill bits. In January, a Texas man pleaded guilty to stealing three truckloads of oil worth nearly $60,000 after an investigation by the FBI and local law-enforcement officers. Robert Butler, a sergeant at the Texas Attorney General’s Office whose primary job is to investigate oil theft, said in the legislative hearing that he is investigating a case of 470,000 barrels stolen and sold over the past three years worth about $40 million.
In Texas, oilfield theft has become entangled with Mexican drug trafficking, as the state’s newest and biggest production area, the Eagle Ford Shale region, lies along traditional smuggling routes. That’s thrust oil workers in the middle of cartel activity, and made it even more difficult to track stolen goods across the U.S.-Mexico border, said Esquivel, the retired Border Patrol agent.
What happens next?
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If I was a Texan my response would be to secede and take back control of their country. If the Federal Government can't protect your sovereignty then why pay money to them, do it yourself.
This is an example and the beginning of anarchy spreading across the USSA.
Individual States must begin taking control away from Washington.
Rember back when people were cutting power lines down for the scrap value? Good times...it'll happen again as people become more desperate.
Putin has to be really hurting by now with all this energy-sector joblessness in America.
We have Barry to thank for that. It's a shame he can't run for a thrid term.
https://wikileaks.org/sourceamerica-tapes/
Rember back when people were cutting power lines down for the scrap value?
I remember the graphic images of the people doing it incorrectly.
"I remember the graphic images of the people doing it incorrectly."
This as a comment from 'BKbroiler' has me rolling in the irony. +1 brother
So income from stolen oil. Check.
10,000 "Syrian" "Refugees". Check.
I'm just putting togther my ISIS/USA checklist.
I remember that episode when Homer Simpson climbed a pole and it didn't work out too well for him, either.
double post
Washington is becoming irrelevant. As the crony capitalist slime make Washington DC into a global laughing stock there will be less desire to have anything to do with the place. So what if they have nukes and the US military? They cannot afford to use either tool, and lack support from the citizenry to pursue their self-serving Corporatist adventures abroad. Nobody cares anymore what Washington thinks or wants, that game is over.
Doesn't cost much to push a button at 12 cents a kilowatt hour.
Any entity that can shoot you down on the street, bomb you, imprison you or take your wealth with impunity is not irrelevant, and it's been at least since the 1830s that Washington doesn't care what you think. The temporary government, those bozos who run for public office, may care but they don't run anything except for office. The permanent government rules, is very relevant and cares nothing at all about what you think. Grow up and meditate on the truth of the truth: YOU ARE IRRELEVANT TO THEM.
You think that's how it is? They can set off bombs and all that with impunity?
That's a bit of a stretch.
Taking this as a practical matter, Washington is already dead walking. The populace is un- or under-employed and can barely pay any taxes. 40% of the country is on the dole. The crony capitalists don't pay taxes as a rule. How is Washington going to fund itself without the rest of us pulling out our wallets? Oh they can bomb us into paying ... oh wait no I don't think so.
The rise of the police state is very troubling. There is a lot at work there and most of it bad. But it is not practical to use the police state to fund government without overtly playing your hand, having cops going door to door extorting money, etc. Nailing some tax cheats will play to the papers, but it won't make me open my wallet to paying more myself.
No rather I think they've painted themselves into a very nice corner. Gave everything away to the 1% ... and the 1% jumped ship with the goods. I bet that wasn't how it was supposed to work, but that's how it was. I might be irrelevant to them but I'm the one with options (at the moment) and Washington is the one hoping nobody notices that interesting fact.
I heard ISIS is hirng.
They tried that once,,, didn't work out too well for them.
Nice Mad Maxican oil truck. Just a little payback from the working class you fuckers. They haven't stolen 1/1000000 of what the other class has stolen.
If theft of property is, "just a little payback," then is rape of your daugter, "just having some fun?"
Try it blowhard Texan, and no I don't share your moral code. I've already listened to yours.
You can say that again, and keep your moral relativism.
Watch that slope, it's slippery.
Whatever Hammurabi
https://en.wikipedia.org/wiki/Hammurabi
[insert "well, that escalated quickly" meme]
I'm suddenly wondering if it's actually the Mexican mafia doing it. Crude has some of the same characteristics as drugs; you can't tell where it came from, everyone wants it, nobody looks too hard at the paperwork. Though $50/bbl doesn't seem like much profit at the trouble, if the risk of getting caught is nearly zero then it's free money, and the unemployed roughnecks will do the work under-the-table.
Be funny as hell if the thieves were leasing some of GS's off-shore storage to play the contango game.
The US mafia is probably still in the gravel and garbage businesses which are $10/ton before the significant diesel expense... so not exactly high margin compared to $250/ton for crude. But where the hell would they refine it? A cat cracker is a major step up in both scale and complexity from even the biggest drug labs. A "legitimate" refining operation in the US or Mexico???
Wouldn't you be able to find a crooked refiner? Someone looking to eek out a better than expected yield given the gallons?
Put the oil in at 50% WTI (or less) for cost, run it, show the bosses what a great job you do.
The bosses aren't that stupid. Output is a very precise function of inputZZZZZZZZZZ (of which crude oil is only one input).
It would take a rather sizable conspiracy at any refinery and there are less than 150 refineries in the US & Mexico combined, so the oil companies must now get passes from the HNIC at DOJ just like HSBC.
Mexico could do it, and sell locally. The refiner would take the crude at 50 cents on the dollar right off the tanker truck without any risk, and keep the net. Run your 20 trucks a day over the border (slip a Benjamin per tractor to the guy at the gate) and clear probably $10k a day, not bad at all for driving around like a cola delivery guy.
Back-pay.
there is no unemployment ask obama
"Just walk away. Give me your pump, the oil...Just walk away and there will be an end to the horror."
Just wait til the real wave of pink slips hits next month. Mad Max will look like Hello Kitty in that world.
Good catch. I've always thought that Mad Max and Hello Kitty were one in the same. Or was that Marshal Dillon and Miss Kitty???? Cross-dressing in the Longbranch.
"Watch it there, mister. We take our tutus seriously here in Dodge."
"During booms “they are moving at such a rapid pace there’s not a lot of auditing and inventorying going on,” said Gary Painter, sheriff in Midland County, Texas, in the oil-rich Permian Basin. “Whenever it slows down, they start looking for stuff and find out it never got delivered or it got delivered and it’s gone.”
Same gig back in Nam late 60s. A fully loaded 12 ton truck would "get lost" during the trip from the docks to their designated destination. By the time the paperwork was processed it was 9 months later. We installed a mainframe computer to start tracking and verifying. It just slowed the convoy theft down while other creative means were utilized and the theft went on in unbelievable amounts. If the theft was less than $5mm a day CID did not have the time or resources to investigate.
'Stuff' gets 'misplaced' all the time:
The Missing Billions: Ex-Iraq Occupation Chief Paul Bremer Questionedhttp://www.democracynow.org/2007/2/8/the_missing_billions_ex_iraq_occupa...
Too bad they didn't check a few of those Swiss bank accounts.
Yeppers. The ROK were the undisputed masters having learned well the example set in the Korean "Police Action" by our troops. They evolved what they learned into an art form. They supplied most of the top Saigon restaurants with PX Beef and other supplies. Hell, they would bring in an LST to the Saigon Docks, load up and ship everything back to SKorea. Scrap metal recovery was their cover. A 120 ton floating crane went missing - showed up 2 years later in the Phillipines. Teamwork at its finest.
Our tax dollars hard at work!
You mean like this:
"Weapons Stolen From US Army Reserve: Thieves Snuck In Through The Roof"?
I think dishonest roughnecks are the least of their worries. Maybe try snooping around in the boardroom.
Even roughnecks are entitled to Skin in this Glorious Game.
Rats! I was going to try roughnecking after I retired from science.
Hmmm. How about working on a crabber for 6-8wks ala World's Deadliest Catch?
Then I'll have the rest of the yr to pursue hedonistic pleasures.
Its not just unemployed jackscrews pulling this stuff. Its also white collar folks in the accounting departments who "under-report" volumes to government on which payment of royalties is due.
What refinery is buying 1 tanker truck of stolen raw oil, it's not like there are very many. With miles of crude sitting in the Gulf in ships why fool with bullshit for so little profit and so much risk. I don't see it, two hundred barrels is nothing.
Beats flipping burgers for a living.
Refiners would probably take the crude no questions asked ... at 50 cents on the dollar. Your story is "it's some overflow didn't fit on the tanker down at the terminal, I bought 1,000 bbls from the shipper cheap, just take it off my hands okay." Nobody would blink.
Probably happens most any day.
I have a friend who works in the oil sands and he said a coworker got caught pawning the companies equipment to buy coke with it.. and he still didnt get fired!!
Your friend's coworker the member of a visible minority?
Dickie Cheney is jealous because these guys stole more oil than he did [0 barrels] and didn't spend $3 Trillion trying...
Execute criminals and the problem goes away real quick.