JOBS UP IN OIL PATCH
Employment is climbing but still way off peak years
Employment in New Mexico’s oil and gas industry is starting to climb out of the doldrums after months of job losses, according to new federal figures.
Those figures, covering the second quarter of this year, show a 4.8 percent increase in employment in the mining sector compared to the year before. The mining sector includes oil and gas.
Still, that number — 20,618 jobs — is more than 25 percent below what it was in the second quarter of 2014, before oil prices started to crash and cause devastating effects on the state’s budget.
Signs of an oil and gas comeback have been evident in recent months, with oil prices climbing and booming interest in the Permian Basin in southeastern New Mexico and western Texas.
The price of crude oil on Friday was $58.30, compared to levels that had plunged below $30 after prices began collapsing in late 2014. Before that, the cost of a barrel of oil had peaked at over $100.
The number of rigs operating in the state in the second quarter was 59, triple what it was a year ago and production was up about 14 percent. Compared to 2014, though, the number of rigs this year is down by 34 percent. Production is up by 35 percent.
And that means more money once again flowing to the state, with one legislative economist saying this week that New Mexico could see a “reverse whiplash” with the recovery of oil and gas revenues and other factors.
The turnaround in employment is evident in Hobbs and Lea County, where oil and gas sector employment rose by nearly 14 percent. Nearby Carlsbad and Eddy County notched a 6.3 percent increase over the year.
Jim Peach, New Mexico State University economist, said it’s not surprising to see increases this year compared to last because 2016 was “an absolutely miserable year.”
But even as jobs start to come back in greater numbers, they likely will never the reach the level New Mexico saw in the boom years, he said.
That’s because of technology that allows oil companies to do their work with fewer employees. Modern rigs, he said, “are so efficient that some of that employment is never going to come back.”
According to Bloomberg, the oil price collapse eliminated 440,000 jobs nationwide and anywhere from one-third to one-half of those are never coming back.
Another issue holding back employment is a shortage of qualified workers, said Larry Scott, a Republican state representative of Hobbs and president of Lynx Petroleum Consultants.
In particular, truck-driving jobs related to the oil and gas industry are hard to fill.
“If you’ve been in my community recently, there are `help wanted’” signs hanging on every fence,” he said. “There are no people with the appropriate skill sets.”