Interview Part II: Frack Jobs – Plentiful but Rough

Oil Field workersIn this interview Bryant talks about the difficulty of employing oilfield workers, who often look for trouble.

Bryant:           Hello, my name is Bryant, and I presently work for a company that develops and operates frac-sand silo terminals in the Eagle-Ford shale.

Bryant and I spoke about his views working on the fracking world in an earlier podcast but we also spoke extensively about the impact of the Natural Gas Revolution on jobs in South Texas. The first point is that there are a ton of jobs created.  The second is that it turns out the work-force can be pretty rough.

Bryant:          The extracting of natural gas from the earth does create a lot of jobs, which is something that obviously this country is starving for at this time. You know people tell me, “I don’t want to work as a rig hand.” No, I’m talking complete cities are developing because of this stuff. An oilfield comes in first: you need restaurants, you need hotels, you need rent-a-cars. You start to develop quite a bit of economy — you have an economy wherever this stuff really starts to kick off, and I think that’s good. You need welders. You start to then develop actual skilled workers.

Michael:         I went on the site of this company and everything was provided seemingly by something else. There were the Schlumberger signs, the Halliburton signs, the guys guarding the entrance to the ranch that they were drilling on. There was the catering guys. This is being done in an area where it’s basically raw ranchland for a hundred years, and they have to basically import services for everything. It was kind of amazing.

Bryant:           Everything, generators, electricians — any time I have an issue with my silos and I need an electrician, it’s not easy. If you need a skilled worker in some of these areas they’re very difficult to come by. Like I said, labor, that’s why the Eagle Ford is so attractive. You’ve got San Antonio, Houston, you’ve got major cities that people are leaving and flocking to these smaller towns, really in the middle of nowhere, and providing all the services needed.

This stuff, fracking, it employs a lot of people that may not have education. It employs a lot of people that have a lot of mouths to feed, that may not have really the education to go and get an office job. I think that’s really important for the world. A lot of people don’t have the opportunities to get the job they really desire. They just need a paycheck. This really helps. I would hate to see all these towns I deal with, all those people not working. We’d have a serious problem on our hands. I mean by just violence, and upset people.

Michael:         You and I talked about your earlier job in the Eagle Ford that was with a buddy of yours…Can you just describe for me the part about what it’s like to manage a bunch of guys in an oilfield work environment, and how different it was from what you’d expected, or where you come from?

Bryant:           It’s tough. It’s probably the hardest part of my job still to this day. I came from working before I moved to Texas to work in this industry I worked for the publishing industry in New York City for five years. I was constantly surrounded by people that probably like to read a lot of books and keep up with current events, etc. I came into an industry where not a lot of the workers on the ground have college educations.

Michael:         What about high-school educations?

Bryant:           Not a lot of them have high-school education as well, so it’s very difficult, at least for me just to bridge that gap between office work and someone that’s been driving a truck for their whole lives, and who don’t really understand why there are procedures that can’t be broken, and why there are rules that need to be maintained. They just seem to care about it’s my truck, I want my money, and that’s it or I don’t want to work today because I didn’t get a good night’s sleep last night.

So, it is very difficult. I hate to use the word unruly, but you come across a lot of people that they sometimes don’t really care as much as you’d like them to. Now it also is very difficult in that a lot of these towns you get fired or you quit from one place, you just walk across the street and they’ll hire you immediately to do the same thing you were just doing. There’s such a need for drivers and people with experience. Workers know this. So, they know if they don’t show up because they went out and they blew their check and got drunk, and just didn’t wake up, and they come in two days later and you fire them, they’re just going to walk across the street and get fifteen, twenty dollars an hour doing the same exact thing for somebody else.

That environment is difficult. A lot of companies are trying to adapt, trying to have the medical insurance and 401(k), trying to maybe have a little signing bonus. You have to do things to keep good workers because it’s very competitive. But it is very difficult to manage people in the oilfields sometimes. They can be a little rough around the edges, but that’s why I think managing in this industry actually pays pretty well. It’s not an easy task.

Michael:         I’m afraid you don’t have enough tattoos to be running this kind of crew.

Bryant:           I definitely change my attitude a bit, depending on who I’m with. If I’m not in the field, you kind of change a little bit. You try to blend in a little more and probably in the vocabulary. I use a lot more oilfield jargon than when I’m probably doing a sales call or some kind of meeting at a corporate level. So again, I think that’s what makes it a fun job for me. You’re constantly a chameleon and you’re in between two different worlds all the time.

A lot of these guys can be pretty irresponsible. They make really good money, so a lot of times they come from places where they don’t make — they come from poorer backgrounds and all of a sudden you’re making twenty, twenty-five bucks an hour, you’re clocking twenty, thirty hours of OT because it is twenty-four hour drilling. This stuff never stops, so you’re making a lot of money. You probably didn’t learn money management much and kind of start getting into trouble.

Michael:         Is there trouble to be had in South Texas?

Bryant:           Oh yeah, there’s always trouble. I’ve never actually been up to North Dakota. They say it’s like stepping onto the moon, it’s so barren. I do know people that have been up there and they said, “Honestly, you get to some of these places, and the only thing there is, is like a barbecue joint, a trailer park, and a prostitution house. That’s all you need is drinks, and money, and women, and these guys probably stay pretty happy for a while.” There is trouble. There is a lot of trouble.

I used to actually give out paychecks on Mondays instead of Fridays because workers tended not to show up on Saturday. They’d get their money on Friday, they’d go and get drunk, and I’d get a call maybe somebody was in jail, or somebody was drunk, and I really had to just change my rules. I said everyone gets paid on Monday. You don’t go out and get in as much trouble on a weekday. Yeah, there’s a lot of trouble.

 

Bryant and I spoke of the difficulty of managing the low-end of the labor market, but then he described the other end of the labor market, the scientists and engineers providing the brainpower for the shale play.  As much as the story job-wise is mostly positive, I couldn’t help but think of the idea that we’re in the role of a 3rd world country…we provide the low-end cheap labor, and the rest of the world provides the brains.

 

Bryant:           I’m going to tie this into politics a little bit, but you meet all these engineers for the big three: Halliburton, Schlumberger, and Baker, and not a lot of them are from the U.S. You meet a lot of them from India. You know, Asian and South American. It’s crazy. You actually sometimes walk into these offices and it’s like the United Nations. It’s people from all over the world, which is great, I’m all for it, but I think it shows that we are slipping more and more, like everyone has been saying, in our math skills, in our education, period. We have a great technology but we’re not really creating people or educating people to do it. We’re kind of letting it get away.

Michael:         So, the high-end intellectual jobs, the engineering jobs, the people inventing this stuff or figuring it out are not necessarily trained here. They train somewhere else and then they get here.

Bryant:           This is definitely the testing ground. The U.S. is where it’s happening, but a lot of those times it’s being created by an engineer that’s not from here. You’re getting people from other countries that are seeing an opportunity to come into the industry and make some money. The industry is eating them up. The industry has money to pay for the best, so they’re buying the best minds they can buy to make their work more efficient so they can make more money.

Please also listen to Part I: Fracking and Regrets

 

Post read (10346) times.

Interview Part I: Fracking and Regrets

I had a conversation with a friend who ships trainloads of ‘frack-sand’ into the Eagle Ford shale in South Texas.  We talked about the Natural Gas Revolution, as well as the surprising and possibly regretful turn his life has taken, far from working in book publishing in Brooklyn.

 

Bryant:  Hello, my name is Bryant, and I presently work for a company that develops and operates frack-sand silo terminals in the Eagle Ford shale.

Horizontal fracking or hydraulic fracturing is a new technology. It’s been around probably — I would say since about 2007, but obviously now it’s really picking up. What it is, is instead of drilling and fracturing the earth, only in a vertical manner you drill vertical and horizontal and you fracture along the horizontal, through the shale.

Michael:  When you and I were having a beer with a mutual friend of ours, he was describing basically oil and gas trapped in small little bubbles of rock that you can’t, with conventional drilling, get at. But you sort of smash it up with this horizontal drilling by shooting water and sand and chemicals, and it smashes up the rock and then the oil and gas flows. Is that basically still the right, accurate description?

Bryant:  Yeah, that’s exactly right. First you drill it, and then — which means you just basically drill a hole and then you pull out all the drill pipe, and you go in with the fracking equipment. They call it the gun. The gun then blows off, which shoots shrapnel in all directions. After that, you pull that out. You then pump millions of pounds of water at a very high pressure, which then opens up the routes that the shrapnel first created to get to those pockets, and then you pump millions of pounds of frack sand, chemicals, and guar. It almost creates a slurry that helps keep those routes open so the oil and gas can actually flow out of the well.

Michael:  To go back to the original description, your link in this chain is that you move huge amounts of sand from northern United States into South Texas?

Bryant:   Yes, right now we’re averaging about 35,000 tons a month, which is about 70 million pounds so it’s quite a bit. It’s about 350 rail cars a month. Each one holds 200 thousand pounds.

Michael:          350 rail cars, so you basically take over an entire train, you fill it up with sand. It leaves Wisconsin, or where is this coming from?

Bryant:  The mines are all located in the north, mainly Wisconsin, Minnesota.  Apparently it has to be portions of the earth that were covered over during the Ice Age, and therefore have been untouched for a very long time, and the earth is very, very hard. This sand can basically deal with very high pressure.[1]

Michael:  Referring to Eagle Ford. I know what it is because I live in South Texas, as do you, but basically this is a giant area covering a huge number of counties under which they’ve discovered there’s all this oil and gas trapped in previously undrillable area in the shale formation.

Bryant:  The Eagle Ford Shale actually is a formation that spans from Laredo, obviously it continues into Mexico, I’m only giving you the American formation. Starts in the Laredo, Carrizo, Cotulla area, spans northeast right under San Antonio, up through Cuero and Kennedy, really very key spots. That’s actually where the first well was ever drilled, but that’s really the formation of it.[2]

What makes it the best play really in the world right now is the economics of the play.  So, all the infrastructure is in place to bring in high volumes of sand, high volumes of water, high volumes of guar from India coming into the Port of Houston, Port of Corpus Christi. You’ve got chemicals; you’ve got bauxite coming in as another form of I guess sand or proppant from South America. So, you have infrastructure in for high volume of rail and barges, etc. There is a large amount of workforce. You have a lot of people looking to work. You have infrastructure, and then probably the most important is it doesn’t cost a lot of money to then get the product to refineries because you have all the refineries located on the Gulf Coast, so your margins to get it to market are a lot higher when you’re in the Eagle Ford. That’s really what makes it the most attractive play right now in the world.

Michael: I went down to Eagle Ford to tour it. I asked one of the guys down there; I said, “How long is this thing going to go for? How many years do we have for drilling?” He said, “What we’re looking at is probably fifteen more years of heavy drilling and fracking operations.” Is that what people talk about when you’re there?

Bryant: It fluctuates all the time. When this first started a couple years ago, you know, it was twenty to thirty years. Now they’re saying yeah, about fifteen. I read an article the other day it’s sixteen. That seems to be the consensus.

Michael:  Then I asked him, “So if we’ve got natural gas reserves that are now available in the U.S. that we never thought were available because this stuff was trapped inside the rock, and now it’s being released from the rock, how long do we have great reserves of natural gas?” He said, “About ninety years-worth is of the known or probable, available natural gas.” Ninety years worth in the United States, does that sound right? Is that what people talk about?[3]

Bryant: I wouldn’t doubt it. The Marcellus Shale which encompasses a lot of up-state New York, Pennsylvania, even creeps its way into Ohio and down into West Virginia – the Marcellus Shale they say hasn’t even been fully, surveyed. They’re saying that shale alone if developed would become the largest gas shale in the world.  So yeah, I believe that’s probably pretty accurate.

Michael:  So if we’ve got ninety years — here’s where I go with that. When I think about what is going to be sources of energy for, say, the rest of my lifetime, your lifetime, pretty much what that tells me is that extraction of carbons from the earth is going to be cheap for the rest of our lives, and renewables that from a political standpoint I may prefer that we use solar power or wind power because it just seems cleaner and better for the earth, but that’s probably not going to be viable when compared to natural gas, for the rest of our lives.[4] This is sort of what I take away from it when somebody says yeah, we’ve got about ninety years worth of really cheap gas we can access. I don’t know if you have any thoughts about that.

Bryant:  I do. I’m originally from the Northeast, so I work in an industry that is frowned upon by a lot of people in the northeast. So a lot of my friends will tell me, “Why are you involved in something when you could be involved in solar power or something greener?”

Michael:  When I told the woman who looks after my kid a couple days a week that I’d been down to see a fracking site, she said, “Fracking, isn’t that illegal?” Do you get a hard time from people, from your old world about fracking itself?

Bryant:  I do. I get a horrible time. I even hate myself sometimes. If you were to tell me ten years ago that I would have been doing business with Halliburton, I would have denied it, but I’m now in that world. I attend a lot of conferences where you look around and it’s just not the type of people I thought I’d be hanging out with all the time. Basically it’s all about fifty, sixty, or forty or fifty-year old white men that have just been raised in the oil field in some form. I like art and things like that. So it is a little crazy, and I do get a lot of flack from them, but I always do welcome a debate.

Michael:  Do you have any thoughts you care to share about where you see yourself in five years, either how you’re going to make your fortune as an oil guy or not, and another would be whether you have any kind of personal regrets about starting out in the publishing industry and ending up as an oil guy.

Bryant: Yeah I think I’ll probably answer the second question first because it will lead to the first one. Obviously when you’re young and in college, you’re a real idealist. I was really into writing and reading and if I could do it all over again I probably would have focused my energies more on a lifestyle where I could have lived off of some kind of art or humanities. But life is not — I don’t think college really prepares you as well for reality, at least in my opinion.

Personally, I would have preferred to not have taken this route, but I’m not ashamed in what I work in. I do find it fascinating. It is something that moves on a global scale, which I think is very interesting.

In this business you’re constantly meeting people with money and with ideas and with connections. I hope to one day be able to capitalize on my knowledge and my connections, but I actually prefer to go somewhere else in the world. I wouldn’t mind getting involved in South America.

I think the way it’s going to happen in the rest of the world is actually a little more interesting because they’re going to have all the little problems that we’ve already solved here a long time ago. And problem solving is actually kind of a fun part of the job. The rest of the world really doesn’t have the infrastructure that we have here for moving equipment and materials. I think that would be even interesting to do. I don’t have to necessarily get involved in drilling or trading. It could be as simple as logistics. Things like that are actually — I think there’s room for it in the future, and hopefully five years from now I’ll have some options to do that.

 

Next up in Interview Part II – Bryant and I talk about the Eagle Ford labor market.

 



[2] And the Eagle Ford shale play has really changed the look of South Texas.  It’s kind of a Mad Max Bizarro world down there.

[3] In other words, this Natural Gas Revolution is huge.  As further described here.

Post read (5864) times.