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Jobs Go Begging as Oil Revives : Current Shortage Seen as Harbinger of Serious Problem

November 01, 1987|DONALD WOUTAT | Times Staff Writer

TAFT, Calif. — They started another class in fixing oil rigs here last week. Sponsored by employers, the 21 men are virtually assured good-paying jobs in just six weeks. What's not assured is where Taft College will find enough would-be roustabouts for the next class.

"We can't turn 'em out fast enough to meet the demand," said Greg Mudge, who runs the course in oil well servicing and maintenance.

At the University of Southern California's department of petroleum engineering, recruiters from Mobil, Shell and Exxon arrived on the same day last month. Mobil alone wanted 10 engineers for its Denver office, but USC expects only six students to be available at spring commencement.

"The campus activity is hot. They're looking for people, and we just don't have them," said Iraj Ershaghi, professor and acting chairman of the department.

It was barely a year ago that oil prices were plummeting toward $10 a barrel and the oil industry was shutting down wells and laying off employees by the thousands. Now, with oil's recovery scarcely begun and drilling on a modest upswing, scattered shortages of blue-collar and even professional workers are beginning to appear.

The shortfall is concentrated in support industries, normally a leading indicator of what to expect at the oil companies themselves. Philip C. Crouse, a consultant in Dallas, predicts a need for 23,000 more people next year in the production end of the business. In 1987, 16,000 more workers were needed compared to 1986, according to the Labor Department.

Though today's shortfalls are expected to be eased by higher wages and the pool of laid-off geologists and engineers, the abrupt shortage of workers is symptomatic of one of the industry's greatest concerns as it slowly reactivates oil and gas exploration and drilling after the historic price collapse of 1986.

'Sunday School Picnic'

It is already becoming clear in California and the other oil states that thousands of people who left the Oil Patch voluntarily or otherwise are now proving hard to find--or to lure back. And college enrollment in geology and petroleum engineering has nose-dived by more than 80%.

William L. Fisher, director of the Bureau of Economic Geology at the University of Texas, says this massive contraction--like the oil price run-ups of the 1970s--is uncharted territory in modern times because price and supply had been regulated for the 40 previous years.

"The crash that took place in the oil industry in 1986 makes last week's stock market crash seem like a Sunday school picnic," Fisher said. He said significant professional shortages are likely to crop up in two years, forcing the industry to hire a slew of "archeology majors with 15 hours of geology."

"The oil companies are worried, and they should be," Fisher said. "They'll start offering $50,000 a year and people will show up, but it will not be as big a pool to draw from and apply the technology properly. That will mean an erosion of our ability to discover and recover oil. It's an experience we've never had before . . . it is a substantial problem, a public policy question."

The decline in oil prices that began in 1982 and accelerated in 1986 has not only dried up college enrollment in oil-related fields, but has driven people from both the blue-collar and professional levels out of the industry to more promising territory.

Many, such as Scott Blackhurst, a 24-year-old petroleum engineer, say they have no intention of returning. Until earlier this year, he was production engineer on a Tenneco water-flood project near Bakersfield--one of the oil-field technologies being counted on to forestall the steady decline of the nation's oil reserves.

"It's hard to describe what it's like to scramble for a job in the first place and then not know how long you're going to keep it," said Blackhurst, who quit his job and is now a first-year law student at Penn State. "I liked the job a lot. But I'd seen nothing but really bad times in the oil industry."

Another oil refugee is Greg Mudge's 32-year-old brother, Steve.

He spent seven years working on oil rigs as a roughneck and then as a crew foreman in Long Beach and Bakersfield, sometimes earning $40,000 a year. Now he is studying accounting and computer programming at a trade school in Tucson while his wife works as a waitress. They have three children.

Blue-Collar Shortages

"They cut down on my hours so much I decided it wasn't worth it anymore," Mudge said. "I stuck it out as long as I could, but it got to where I was only working 20 hours a week."

Since then, as the worldwide oil glut eased and the price of crude oil recovered about half of what it lost in 1986, it has become increasingly attractive to drill for oil. By late October, with the price of oil holding steady for now despite the stock market crash, the number of working U.S. oil rigs had reached 1,130, a rise of some 70% in 14 months. That remains low in historic terms, but the nearly 500 extra drilling rigs still require upwards of 5,000 more people.

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