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Finding a job after the oilfield

Diego Estrada finally lost his job as a wireline operator in March. For months, the 35year-old said he watched his hours dwindle, chipping away at earnings beyond what he ever made as a construction worker in El Paso.

In 2014, he said he made $88,000. But as oil companies shed rigs and completed fewer and fewer wells as the New Year began, Estrada saw his earnings drop to the minimum his job at Vaughn Energy Services promised.

That was about $2,700 a month, without working at all. But it was not enough.

“We weren’t going to make it on rent,” said Estrada, who pays $1,800 a month for his family’s mobile home in Midland. “We were going to start quitting. They had to let us go.”

After getting laid off because of the drop in oil and gas activity, finding a job became Estrada’s fulltime job. Estrada sent out a wave of applications for oilfield jobs. Even today, he said none have called him back. But it turned out his manager at Vaughn had a wife who worked at Permian Homes. The company, like many across the construction industry during the boom of the past few years, struggled with a tight labor market that made it difficult to find workers and keep them.

Estrada had a decade of experience in the industry in El Paso. He actually came to Odessa six years ago because of a collapse of the construction market back home. It just turned out the oilfield, with its higher wages, scooped him up instead.

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In less than a week after losing his job as a wireline operator, Permian Homes hired Estrada as a superintendent, overseeing up to 10 crews each composed of a handful of men.

This scenario represents exactly the sort of phenomenon that workforce development officials hope will happen: that laborers displaced from the oil patch will start to fill in positions outside the industry that were left vacant or created during the boom.

But Estrada’s story also illustrates the sort of adjustments that can entail for workers who adapted their lives to careers supported by $100 per barrel.

“My lifestyle is changing,” Estrada said.

It’s difficult to determine just how many workers in the area lost their jobs because of the plunge in oil prices.

Not all companies have to report such information to the state and almost none offer regional breakdowns voluntarily.

But a picture is starting to emerge. Permian Basin Workforce Solutions estimates that “6,000 or 7,000” workers were laid off this year in the region, with most of those in the Odessa and Midland area, said CEO Willie Taylor based on the number of unemployment claims filed. (Commission officials expect a more detailed report this week.) An Amarillo economist who studies the area, Karr Ingham, projected losses of about 17,000 in Odessa and Midland, based on losses during the 2009 recession. The area also hosted thousands of transient workers during the boom who would travel home after their weekslong shifts.

Layoffs among this group might not show up in the unemployment rate that is inching upward, eaching 3.7percent in Odessa in March, according to the most recent data. So far, labor data shows some 10,000 jobs lost throughout Texas in the oil and gas industry, “with thousands more to come,” Ingham wrote in a report this week.

The notion that there is a job for every one of those losses in the area falls flat, Ingham said.

“It’s not simply that jobs are lost in the oil and gas sector, because when you start losing oil and gas jobs, jobs are being lost in ancillary fashion otherwise,” Ingham said. “… The labor market has been very tight here. But that thing is going to start loosening up very quickly.” But other workers like Estrada are finding new work. Workforce Solutions has been placing about 650 workers a month in new jobs, Taylor said. And there remains a shortage of workers like diesel mechanics, electricians, truck drivers and plumbers, along with governmental workers like teachers, policemen and so forth.

“The opportunities are out there,” Taylor said.

“But don’t be thinking it’s going to be six digits (in salary) out there.”

Taylor argues that using the downturn to relieve some of the strain in industries outside the oilfield is key and will help stave off the shortages in recent years when oil prices rebound.

Not every displaced oilfield worker can shift into other careers, if, for example, they adapted their lifestyle to the higher pay.

The construction sector was another to feel the strain of the oil boom, as developer after developer saw projects delayed or cost more because of a tight labor market. Dave Cook, the president of Permian Homes, said he does not see that situation changing quickly. “I see a bigger labor pool,” Cook said. “I don’t really see cheaper labor costs. They are hard workers.”

Switching careers from the oilfield to construction meant Estrada got to keep working without moving home to El Paso, but he said it also shaved more than $30,000 a year off his annual salary. Estrada said he earns enough to pay for the rent and groceries for him, his wife and four children. But it is also “making me save money in every way I can,” Estrada said. He downgraded his phone plan, for example, and switched to less expensive insurance.

“Everything is going more essential,” Estrada said. “I’m not taking the kids often to the movies.

We are not having too much fun.” It’s been roughly six weeks since Estrada lost his oilfield job and fired off at least 10 applications to other oilfield companies.

None have called yet for an interview, he said. Whenever prices rebound, he is not sure what he will do if his new job stays steady. “Would I do it again?”

Estrada said. “I don’t know. Right now, I’m comfortable here where I am. I don’t like to quit.”

 

This article was written by Corey Paul from Odessa American, Texas and was legally licensed through the NewsCred publisher network.

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