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

 

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Natural Gas Revolution Part V – The Labor Market

Mr. Grizzly, Mr. Deliverance and Mr. Biscuit – Contractors and the Eagle Ford Labor Market

Among the main lessons of our tour of the Eagle Ford, is that there’s a lot of jobs down here.  If you’re a man currently out of work, and you have the use of all of your limbs, there’s a job available for you in South Texas, right now.  Like, today.  If you feel like working for a living – go.

At the newly constructed drilling pad the first order of business was to receive another safety briefing.  If I – in my hazmat suit – look like I just escaped from the movie set of E.T., our safety instructor looks like he escaped from the movie set of Deliverance.  He of the scraggly goatee points out the safe gathering point on the pad in the event of a massive blowout or fire.  He makes me nervous on a number of different fronts.

Another grizzled veteran – with 40 years of drilling experience – takes over the drilling pad narrative at this point.

While Mr. Grizzly is old enough to be a grandfather, this is not your grandfather’s drilling operation.  He explains that this particular drill rig we’re looking at, built a few days before we arrived, can ‘walk.’ What he means is they can drill 10,000 feet underground for a few days, then slide the entire 100 foot above-ground structure a few feet away and drill an entirely new underground well, without dismantling the rig.

Since the relevant underground piping for hydrocarbon is horizontal, underground wells can line up next to each other a few feet away but cover a horizontal mile in entirely different directions from a single drilling pad.  This ability to ‘walk’ the rig and set up multidirectional horizontal wells saves days of labor and hundreds of thousands of dollars.

Mr. Grizzy loves this feature.

Listening to Mr. Grizzly I’m struck that this place isn’t swarming with younger guys, and Mr. Grizzy tells us why.  When the 1980s oil crash struck Texas, an entire generation of workers washed out of the business to work elsewhere.  A few like Mr. Grizzly and Mr. Deliverance stuck it out, and new guys are now joining up, but there’s a missing generation of workers, adding to the difficulty of finding competent experienced workers in the Eagle Ford shale.

Also notable on the drill site are the predominance of contractors.

Everything, it turns out, seemingly depends on contractors and sub-contractors.  Halliburton is on the drilling pad here, as is Schlumberger, to name two huge world-wide oil-service contractors.[1]  But everything down to skilled mechanics and plumbers has to be located and hired separately.[2]

This makes sense as I think about this now, since so much is needed in this previously-empty outback country.  Hardly anybody lived out here before the Eagle Ford shale play began, so everything has to be provided in the absence of pre-existing infrastructure.  Contractors guard the gates to the drilling site; contractors supply the tricked-out Mad Max trucks; contractors even set up the barbecue tent where we were served lunch.

Our host company owns the lease, will oversee extraction from the site for years to come, and will take the oil and gas to market once it gets above ground, but they’ve sub-contracted the actual few weeks of drilling to another group, and that’s who Mr. Deliverance works for.  Mr. Deliverance’s team sets up the drill rig in less than a week and spends another week drilling up to ten thousand feet underground and as much as a mile horizontally, blasting and fracking as it goes.  Following an intense 2-3 weeks of drilling activity, the drilling contractor moves to the next drill site with the same or a different independent operator.

With some sense of what we’re now looking at, we are invited to climb aboard the actual rig, where our steel-toed boots come in handy. We clamber up steep steps to a platform, then over a series of porous metal grates.  Underfoot we see specialty ‘mud’ stored beneath us, a chemically-treated liquid mixture to facilitate the upcoming drilling process.  The actual chemicals mentioned were a mystery to me, but Mr. Grizzly mentions falling into the ‘mud’ container at least once in the past.  Mr. Grizzly appears well past procreation age to me, so I’ve decided not to worry about that too much.[3]

Later in the day, at a separate fracking site, I get another taste of the tight labor market down here.  In an air-conditioned trailer, two men watch flat-screen monitors where all manner of data keeps them apprised of ongoing fracking activity on site.

One of the men hardly notices us, so engrossed is he in his monitors, but the other introduces himself cheerfully as a native of Biscuit, KY.  Based on his overall affect, not to mention his denim overalls, if he wasn’t overseeing a fracking job I’m pretty sure he’d be watching professional wrestling on his couch, right now.  He seemed pretty happy, indeed surprised, to be gainfully employed.  Somehow his provenance from Biscuit tells me what I need to know about the labor market in the Eagle Ford shale.  And no, I can’t find Biscuit, KY on Google Maps either.

See also Part I – Mad Max Bizarro World

Part II – Big, Corporate, Well Capitalized

Part III – The Drilling and Fracking Scene

Part IV – How Big Is This?

 



[1] One of the unfortunately named contractors on this site was Patterson-UTI.  My wife’s an infectious disease doctor, and as such, would never endorse naming something “UTI.”  It sounds like something you’re likely to catch from the infamous ‘Man Camps’ that have sprung up around fracking areas around the country.

[2] I asked our hosts towards the end of the day how someone could ‘get rich’ in Eagle Ford right now.  They all agreed setting up a contracting company was the way to go.  Anyone with a skill and a willingness to work hard could make a good living with so much need for skilled labor.

[3] On the other hand, the unique combination of chemicals in the ‘mud,’ if they didn’t kill him, might have been enough to make him unbelievably strong.  Isn’t that how most superheroes get made?  Can somebody do a cartoon mockup for me of Mr. Grizzly and his superpowers after he emerges from the ‘mud?’

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