As oil industry recovers, companies can’t find workers

Twenty-six percent of payroll lost in last 10 years; steepest one-year drop in 1999, when number of workers dropped 14 percent

Andres Ybarra

Associated Press Writer

Hobbs native John Fredlund is one New Mexican who didn’t mind the last few months of high gas prices.

Higher prices at the pump means more money for the oil companies so important to the economy back in his southeastern New Mexico hometown, he said.

“I’m glad to see gas prices going up because it means the people in the oil fields are going back to work,” Fredlund said filling up his car in Albuquerque.

But while the prices go up and the economy is on the rebound, the United States oil industry is having trouble finding workers to keep up with the demand for its precious resource. New Mexico is far from immune from the national problem.

Oil prices bottomed out over two years ago when prices were around $11 per barrel. Customers enjoyed the low prices at gas stations but oil companies began laying off their workers. Now with the price at about $29 per barrel, the companies are scrambling to find laborers to work in the oil fields.

According to Houston-based oilfield service company Baker Hughes, Inc., the number of rigs in New Mexico actively exploring for oil and natural gas shot up from 34 last year to 80 this year. And while the number of operations in the state is on the rise, the latest figures show the number of oil and gas workers in the state to be around 8,700, which is almost a 15 percent drop from 1998 when New Mexico employed about 10,200 workers.

One-quarter of payroll lost in industry in 1990s

The downward trend continued in the first two months of this year, falling 6 percent in January and 3 percent in February, from the same months a year ago.

To independent oil producers like Harvard Petroleum Corp., based in Roswell, N.M., the labor shortage means being charged more money to contract with service companies that work in the oil fields. But Harvard Vice President Jeff Harvard said his company, which operates about 40 wells in New Mexico, is affected more in terms of time than money.

“Our industry is purely driven by supply and demand,” Harvard said. “If there’s not enough people to work, sometimes we have to wait three to four months for a rig, we might have to wait two or three days for a pulling unit.”

Roswell oilman and former President of the Independent Petroleum Association of America George Yates said the labor shortage not only affects field workers, but reaches into the companies’ professional offices as well. Planners, engineers and other employees involved with the logistics of operating wells also suffered from the downsizing when oil prices went down. Getting those employees back is the hard part.

“This hasn’t been a stable industry to work in,” said Yates, of Yates International. “Skills can be transferred elsewhere in the country particularly in a booming economy.”

The oil industry needs to have the opportunity for growth and expansion to make jobs more appealing for prospects, Yates said. More access to federal land is one of the issues Yates said he feels needs to be addressed to help the industry become more profitable.

“We need to better our working environment, our wages and our opportunities,’’ he said.