[Marxism] Texas Oil Fields Rebound from Price Lull, but jobs Are Left Behind

Louis Proyect lnp3 at panix.com
Mon Feb 20 07:26:18 MST 2017

(This is what accounts for the disappearance of good paying jobs, much 
more than trade deals.)

NY Times, Feb. 20 2017
Texas Oil Fields Rebound from Price Lull, but jobs Are Left Behind

The industry is embracing technology, and finding
new ways to pare the labor force. But as jobs go away,
what of presidential promises to bring them back?


MIDLAND, Tex. — In the land where oil jobs were once a guaranteed road 
to security for blue-collar workers, Eustasio Velazquez’s career has 
been upended by technology.

For 10 years, he laid cables for service companies doing seismic testing 
in the search for the next big gusher. Then, powerful computer hardware 
and software replaced cables with wireless data collection, and he lost 
his job. He found new work connecting pipes on rigs, but lost that job, 
too, when plunging oil prices in 2015 forced the driller he worked for 
to replace rig hands with cheaper, more reliable automated tools.

“I don’t see a future,” Mr. Velazquez, 44, said on a recent afternoon as 
he stooped over his shopping cart at a local grocery store. “Pretty soon 
every rig will have one worker and a robot.”

Oil and gas workers have traditionally had some of the highest-paying 
blue-collar jobs — just the type that President Trump has vowed to 
preserve and bring back. But the West Texas oil fields, where activity 
is gearing back up as prices rebound, illustrate how difficult it will 
be to meet that goal. As in other industries, automation is creating a 
new demand for high-tech workers — sometimes hundreds of miles away in a 
control center — but their numbers don’t offset the ranks of field hands 
no longer required to sling chains and lift iron.

So while there is a general sense of relief in the oil patch that a 
recovery is gaining momentum, discussions at company meetings and family 
kitchen tables are rife with aching worries, especially among those who 
are middle-aged with no more than a high school education.

Roughly 163,000 oil jobs were lost nationally from the 2014 peak, or 
about 30 percent of the total, while oil prices plummeted, at one point 
by as much as 70 percent. The job losses just in Texas, the most 
productive oil-producing state, totaled 98,000.

Several thousand workers have come back to work in recent months as the 
price of oil has begun to rise again, but energy experts say that 
between a third and a half of the workers who lost their jobs are not 
returning. Many have migrated to construction or even jobs in renewable 
energy, like wind power.

“People have left the industry, and they are not coming back,” said 
Michael Dynan, vice president for portfolio and strategic development at 
Schramm, a Pennsylvania manufacturer of drilling rigs. “If it’s a 
repetitive task, it can be automated, and I don’t need someone to do 
that. I can get a computer to do that.”

Indeed, computers now direct drill bits that were once directed 
manually. The wireless technology taking hold across the oil patch 
allows a handful of geoscientists and engineers to monitor the drilling 
and completion of multiple wells at a time — onshore or miles out to sea 
— and supervise immediate fixes when something goes wrong, all without 
leaving their desks. It is a world where rigs walk on their own legs and 
sensors on wells alert headquarters to a leak or loss of pressure, 
reducing the need for a technician to check.

And despite all the lost workers, United States oil production is 
galloping upward, to nine million barrels a day from 8.6 million in 
September. Nationwide, with a bit more than one-third as many rigs 
operating as in 2014, production is not even down 10 percent from record 

Some of the best wells here in the Permian Basin that three years ago 
required an oil price of over $60 a barrel for an operator to break even 
now need about $35, well below the current price of about $53.

Much of the technology has been developed by the aviation and automotive 
industries, along with deepwater oil exploration, over more than a 
decade. But companies drilling on land were slow to adapt until oil 
prices crashed and companies needed to get efficient quickly or go out 
of business.

All the big companies, and many smaller ones, have organized teams of 
technicians that collect well and tank data to develop complex 
algorithms enabling them to duplicate the design for the most productive 
wells over and over, and to repair valves and other parts before they 
break down.

The result is improved production and safety, but also a far smaller 
work force, and one that is increasingly morphing from muscle to brain 

Pioneer Natural Resources, one of the most productive West Texas 
producers, has slashed the number of days to drill and complete wells so 
drastically that it has been able to cut costs by 25 percent in wells 
completed since early 2015. The typical rig that drilled eight to 12 
wells a year just a few years ago now drills up to 16. Last year, the 
company added nearly 240 wells to its Permian Basin inventory without 
adding new employees.

The faster operations, Pioneer executives say, are due in large part to 
more effective well planning and drill steering. Both have been made 
possible by the real-time computer connections between the rig and top 
geoscientists back at corporate headquarters and intense analysis of the 
data gathered at every well.

The laborious task of checking tank levels by climbing a flight of steps 
and popping open a series of latches, for instance, has been replaced by 
pressing a few icons on a computer touch screen. A fully automated water 
pump station installed last summer is intended to save hundreds of truck 
trips every day hauling water for hydraulically fracturing wells, 
yielding diesel and labor cost savings.

“We want to transform our work force to the point where we need to hire 
fewer people,” said Joey Hall, Pioneer’s executive vice president for 
Permian operations. Improved computing streamlines operations, he noted, 
and lets technicians optimally space their wells and more accurately 
perforate the sweet spots of shale veins to squeeze every drop of oil 
out of the ground.

“We’re heading toward artificial intelligence and machine learning, 
analyzing thousands of algorithms,” Mr. Hall added, sounding more like a 
Silicon Valley futurologist than a wildcatter. “Through repetitive 
operations, you learn the patterns, and through patterns you learn to 
make automated decisions.”

With the loss of manual jobs has come a transformation in the job force, 
with demand growing for more data analysts, math scientists, 
communications specialists and robotic design engineers. In the last two 
years, ABB, the Swiss technology company, has opened two plants in 
Houston for assembling and packaging robotics and integrating advanced 
instrumentation into oil field operations.

GE Oil and Gas opened a technology center in Oklahoma City in October to 
place scientists closer to the oil fields to research and apply new 
digital industrial technologies for exploration and production. Among 
its many projects is an experiment to use drones to inspect equipment 
and identify methane leaks on oil sites. Nabors, the oil services giant, 
has 100 employees developing software, 10 times the number it had only a 
few years ago.

“With the adoption of all this gee-whiz software and stuff, we’ve had to 
bring in a lot of new technicians,” said Dennis A. Smith, a Nabors vice 

A typical new oil company employee is Andre Nel, a 25-year-old 
mechanical engineer who is a rising star at Pioneer Natural Resources. 
In less than two years, he has helped rewrite computer software to 
instruct workers on the best designs for hydraulic fracturing, 
optimizing the amounts of fluids, sand and chemicals pumped into the wells.

Now, connected by computers to technicians in the field, he is 
monitoring the production of 950 wells, instantly checking the 
maintenance history and production trends of every well with the click 
of a mouse.

“I’m lucky and happy that the tech revolution in the oil field has 
created the need for engineers like me with backgrounds in computer 
science,” he said.

But smaller companies and their workers are struggling to keep up.

S.O.C. Industries, a small local pump truck operator and chemical 
services provider, is forced to invest $100,000 a year to keep up with 
the computer programs and monitoring equipment its clients request. The 
added expenses are one reason the company has let go 15 of the 60 field 
workers employed three years ago. Another is that well operators that 
once hired five or six people on a drill site to mix chemicals and 
drilling fluids as well as clean up spills are now hiring only three as 
mechanization has sliced their drilling time in half.

Some of the remaining S.O.C. employees are straining to keep up with new 
computerized pump truck monitors and GPS systems.

“It’s a struggle,” said Rodrigo Urias, 59, an S.O.C. truck driver, who 
for many years only had to look at a needle on a gauge to monitor flow 
pressures. Now he needs to reset computer screens, take work orders on a 
computer tablet and sometimes do algebraic calculations.

“A lot of the guys can’t operate these new technologies, tablets and 
instruments, and they keep whining,” he added. “They want to know why we 
can’t do things like we used to.”

Manufacturing executives say they are trying to minimize the complexity 
for field workers, and sometimes design their equipment with the advice 
of video game makers.

That’s a good thing for Michael Manga, 34, an employee of Latshaw 
Drilling, an Oklahoma company active here. A college dropout, he knocked 
around from job to job before finding his way to the oil patch. Now, 
playing video games like Call of Duty and Mario Kart with his friends 
over the years has paid off, giving him the eye-hand coordination to 
monitor and operate the control panels and joy sticks that control the 
drilling rig.

“We do such a good job now,” he said, “we’re drilling ourselves out of a 

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