Postcard From Tulsa

Photo by evilmousse/Flickr

The golden god of drilling.

Mike sends us this letter from Tulsa, Oklahoma:

I work in Tulsa, Oklahoma which has many small independent oil & gas companies. Most independents here drill nearby in Oklahoma and north Texas for natural gas and a minor amount of oil (from a global perspective) in the basins we work. We are not really an oil economy — we are gas driven as is much of the US exploration and production. The news from our small piece of the oil patch is that many companies here have stopped drilling because oil & gas are uneconomic. A drilling rig employs maybe 40 people as it runs 24 hours a day 365 days a year. Plus each rig has maintenance and materials associated with it like welders, drilling mud, pipe vendors, etcetera, all of whom are now idle. This obviously has a ripple effect on the local economy here. In addition, I think people tend to forget that oil & gas drilling is one of the few places left in the US that is manufacturing. Oil and gas are the commodity, but the creation of an oil well is a manufacturing process which in the end creates a product that will produce (hopefully) oil and gas. So this is not a job going to China. Perhaps as many as a hundred rigs have been laid down in the last moth or so.

I however, am not worried. Because of the number of layoffs I have lived through, my family has a "bunker mentality" when it comes to finances, as do most people I know in this industry. I have no credit card debt, no car payment and my mortgage is less than one third of the value of my home. I suspect other parts of the country are beginning to feel like my family has for years. I have survived (not been laid off during) something like 13 layoffs in the oil industry in about 20 years with Chevron, Amoco and then BP. Almost all of the people I went to university with are in other professions due to these price swings and impending layoffs. What we need in the oil & gas business is stable prices. I don't care if they are high or low. Wild swings in prices are what cause these layoffs and are bad for the industry and bad for the country.

By the way, I and people like me cannot find enough oil to supply America's gluttony for the stuff. America needs to get off oil and onto something else. We as a country are addicted to oil and our cities are designed to keep us addicted to oil. In my opinion, within the next few years, global wars bigger than the Gulf wars will be fought over access to oil. Something has got to change...