• November 13, 2019

A year after ‘Black Friday’: Oil bust destroyed thousands of local jobs - Odessa American: Oil Gas

A year after ‘Black Friday’: Oil bust destroyed thousands of local jobs

Examples of human toll abound, scope elusive

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Posted: Sunday, November 29, 2015 6:45 am

A year ago, Tre McDonald worked as a company man for Occidental Petroleum — the highest level field position in the oilfield, for the greatest crude producer in the Permian Basin.

For McDonald, a Crane native in his 40s, the position was the culmination of a career in the oil patch.

He was a company man for about three-and-a-half years, and it was a good job, he said — his pay came out to about a quarter million dollars a year, and he worked two weeks on, two weeks off, meaning plenty of time for family and vacations for the kids.

“These positions are obsolete now. They’re gone,” McDonald said. “Oil is 38 percent of what it was at this time last year — 38 percent. How can you make a living?

Two days ago marked the anniversary of the decision by the Organization of Petroleum Exporting Countries, OPEC for short, to keep the crude tap flowing in the face of waning global demand. The decision was widely seen as an effort to curb the explosive growth of United States shale regions such as the Permian Basin to defend market share.

The Odessa American noted the development this way: “Black Friday indeed.”

The ensuing 12 months hammered the Permian Basin oil and gas industry, along with the local economy that is tied to it. But it remains difficult to calculate the scope of those losses in terms of the human toll and, as a result, to measure the amount of need in Odessa and Midland.

And the lack of solid information about the scope of job loss lends to reports like these from national news outlets, sending reporters to the area to cover the relative strength of Permian Basin oil companies compared to rivals who focus elsewhere:

“The worst oil market in decades would be hard to spot in West Texas, where two-lane county roads are still jammed with trucks and energy companies are on the prowl for deals,” wrote Bloomberg News.

To be sure, the fallout of the worst oil market in decades is not hard to spot in West Texas, considering evidence like the near 40 drilling rigs that sit idle on Business 20 or stories like McDonald’s that abound.

To cope, McDonald said he and his wife are focusing on paying off debt, as she returned to her career as a nurse, working two jobs. They have cut back on expenses like specialty schools for two of their three children, ages 11 and 15.

McDonald is job hunting at places like the Rock the Oilfield Job and Resource event on Nov. 20. He said he applied for a job as a truck driver, a job that would pay a fraction of his position as a company man, only to find dozens of people competing for the same position, some with years of truck driving experience.

“There aren’t any good jobs within 300 miles of this place,” McDonald said.

Economists who study the area such as Amarillo’s Karr Ingham say even the best data — a likely undercount — show about 12,000 displaced workers in Odessa and Midland from December 2014 through June.

Ingham’s monthly reports about the local economy consider monthly reports to the Texas Workforce Commission. His latest report, released Nov. 9, used a quarterly census of employment and wages to revise estimates of oil and gas unemployment from 1 percent to about 16 percent, reflecting the loss of about 5,500 jobs.

Furthermore, the quarterly report also showed about 2,760 other local jobs that were lost through June, meaning a total of about 6,300 people were displaced in the Odessa area.

“In truth the number is probably higher than that,” Ingham wrote, figuring the report is still the most accurate picture so far, “and industry job loss will almost certainly continue.”

“It’s much more dramatic, much more striking,” Ingham said in a recent interview. “Much more jobs show to be lost. It’s a much more realistic picture. So we know, that’s at least how many job losses were between December and June. You just have to realize and suspect that even more jobs were lost in the third quarter ... The picture hasn’t gotten any better. The oil and gas economy remains in contraction. It hasn’t even leveled off at this point. So there is no reason in the world to expect that job losses wouldn’t continue.”

McDonald is convinced there are thousands like him, and that there will be more layoffs as companies run out their budget for the year and a bleak 2016 begins.

“Somebody’s kid is not getting to go to the doctor,” McDonald said. “Somebody is going to have no Christmas. Somebody is getting told there is no Santa Claus because it’s cheaper. There’s a lot of truth in this.”

In the meantime, even though it remains almost impossible to say how many displaced workers face a situation like McDonald’s or worse circumstances, anecdotes like his are plenty.

Katie Van Buskirk, a 30-year-old who has lived in Odessa for eight years, has spent the last several years as a health and safety specialist at Schlumberger. Buskirk said she was laid off in April, and today she still looks for a job.

“People understand in this industry, you have to swallow your pride a little bit,” Van Buskirk said, as she explained the she did not plan to be too picky about work she would accept. “The people who hurt bad are people who bought stuff they can’t pay for.”

And Van Buskirk said she is pretty conservative with her money, living in an apartment with roommates, for example, instead of buying a home.

Van Buskirk said she found a new job in June at Texas Fueling, a logistics company that provides fuel to the oilfield. She said she took a pay cut of about $55,000 per year, but it was a job.

Until two weeks ago, when again Van Buskirk says she suffered a layoff.

“I’m single,” Van Buskirk said. “I don’t have any kids, which is good. I don’t have any kids who will be disappointed that Santa isn’t here. It definitely puts a damper on things, but I’ll get through.”

DAILY OIL PRICE: November 13

  • Crude Oil: 57.12 (+0.32).
  • Nymex MTD AVG:  56.7977.
  • Natural Gas: 2.600   (-0.021).
  • Gasoline: 1.6365   (+0.0221).
  • Spreads: December/January   (-.08)   January/February   (+.11).
  • Plains WTI Posting: 53.50   (+0.25)
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