Higher oil prices create tight labor market

The Associated Press

High oil prices have caused a rise in oil field activity, which in turn has created job opportunities as well as a tight labor market for oil services companies in Alaska.

In 2004, oil services giant Schlumberger’s payroll in Alaska averaged 387 workers, ranking it the 63rd largest employer in the state. When general manager Eric Larson transferred in January back to his home state to run the local office, the company employed about 420 people, from petroleum engineers to mechanics. As of the week of Dec. 12, Schlumberger had 472 people on its Alaska payroll. Larson expects that to bump up to about 500 within six months before leveling off.

“The labor market is tight and getting tighter,” he said Dec. 16.

“There’s a tremendous skilled labor shortage right now,” said Paul Laird, head of the Alaska Support Industry Alliance, an oil-services trade group. BP Exploration, the second largest oil producer on the North Slope, said in November it plans to add 200 engineers and other workers in the next year to staff expansion projects.

Neal Fried, a state labor economist, said hiring for the Alaska oil industry is definitely up, but it comes after years of cutbacks. He also said the industry’s hiring is stronger outside Alaska.

The construction industry also is being squeezed for labor, said Rebecca Logan, head of Associated Builders and Contractors, a statewide trade group. During a construction summit early this year, it was estimated contractors would need 1,000 new workers a year to enter the industry over the next five years to keep up with the current shortage and fill in for an expected retirement wave that’s coming.

“Everybody is so busy right now with both public and private sector work,” she said. Federal and state construction spending is likely to remain high next year, she said.