Layoffs piling up as American oil drillers pull back

Communities around the country that drove the surge in U.S. oil production are becoming victims of falling global prices. Already this month, oil-and-gas servicing companies Baker Hughes and Schlumberger announced a combined 16,000 layoffs, owing to the steep drop in oil prices.

“They gave me 24 hours to leave my house,” John Roberts, a van driver for Schlumberger who was let go in Williston, N.D., told CNN Money.

In North Dakota, where work on the Bakken shale-oil formation had attracted thousands of workers amid an economic surge, Jim Arthaud, CEO of MBI Energy Services in Belfield, said up to 20,000 jobs could be lost in that area alone, and just among companies that service oil and gas drillers.

Prof. Bill Gilmer of the University of Houston told Forbes that 75,000 jobs could be lost in Houston alone in 2015. The city has added about 100,000 jobs a year since 2011.

The antidote to this boom-and-bust cycle of volatile oil prices is to provide a steady, dependable supply of cheap transportation fuel to American drivers for the long term. Increasing the use of alternative fuels will reduce our dependence on oil and protect the economy from the oil-market rollercoaster.

The United States has helped bring down the global price of oil by producing more oil – a lot more – here at home. But that oil, extracted from shale rock, mostly in North Dakota and Texas, is expensive to get out of the ground. As the global price of oil has plummeted, so too have the oil companies’ profit margins, and they’re starting to lay off workers on a mass scale.

To promote the use of more alternative fuels, as a counterweight to oil-price volatility, the U.S. should build up its infrastructure for producing and distributing fuels like ethanol and methanol. There are thousands of jobs that could potentially be created. In 2013, for instance, the U.S. produced 13.3 billion gallons of ethanol, which is blended into the gasoline we all use. The ethanol industry supported 86,504 direct jobs and 300,277 indirect jobs, according to the Renewable Fuels Association‘s most recent data. Those are domestic jobs that support American families, and which can’t be outsourced.

The sector added $44 billion to the nation’s gross domestic product and paid $8.3 billion in taxes, without government subsidies.

If we made such alternative fuels more widely available, we could not only reduce our dependence on oil, we’d create a whole new generation of U.S. jobs that would keep investment in the country and strengthen the overall economy.

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