The 2015 Alberta oilfield layoffs have been a hot topic lately in the Oil and Gas industry. There’s lots of doom and gloom from the news and from talking to other people in the field.
We’re not a news site, so we usually sit back, see what happens, then throw in our perspective in the form of an article. There are enough in-depth economic articles out there about the “Price War”, OPEC, and information on the world scene between the major producing countries.
I’ve sifted through some of these articles and it kind of looks like a big game of greed that comes down to who has the deepest pockets. The politics of the world and the corporate greed can get under our skin, but we don’t want this to sound like an effort to extract pity from anyone.
In the end, we’re in charge of our own destiny and we need to be responsible for ourselves. Since our site is about Oilfield trucking, we’ll stick about the 2015 Alberta Oilfield layoffs that are more focused on what is happening in the field.
I will share this with you though to put the greed into perspective. The combined yearly net profits of the biggest 20 oil companies are enough to feed every starving person on the planet for 2 to 4 years. It’s not their responsibility to feed starving people nor it is our job to tell them they should.
What’s troubling is all the hard working families being put into tough economic positions. We’ll only say that a hardworking man or woman trying to feed their family has much more of our respect and empathy than big oil companies feeding their pockets.
The 2015 Alberta Oilfield layoff mean tens of thousands of workers are now unemployed. Worker camps have been shut down in many places.
Prepare for hard times
When I started this site a couple of years ago, I wrote a mini series on Oilfield Trucking to give people a more realistic idea of what to expect. By “More realistic”, I was referring to the exaggerated stories of “Huge” money working in the Alberta Oil and gas industry. Don’t get me wrong, the wages are far better than most people are used to, but there’s a lot more to consider than wages.
My goal in the oilfield trucking series was to talk about the best of times and the worst case scenarios. I talked about boom times, down turns, temporary slowdown for spring breakup and preparing yourself financially in case things really fall apart like they have.
I wanted to inform people to be prepared to weather the storms. Well, things are now “Stormy”.
Believe what you see over what you read
Accurate statistics on layoffs are hard to come by. I heard one source stating that nearly 70% of the oil and gas industry has been laid off in Alberta. That seemed a little high. I’d go along with 50%. That seems a little more realistic from what I’ve seen.
My numbers have no professionally analyzed statistical backing or merit whatsoever. I believe what I see in the field, while statistics can be manipulated to support whatever purpose you’re serving.
2015 Alberta Oilfield layoffs. The operating rig count is way down from 1 year ago and service companies are walking on eggshells in order to keep the work
So what have I seen so far? The volume of oilfield related traffic on the highways and bush roads. The vacancy rates in the hotels. The job banks and ads, and the weekly rig count numbers. These are the visible signs that are very easy to read.
The rig count can be seen here. As of Sept. 2015 we’re a little less than 1/2 of the capacity we were just a year ago. If you think those numbers over last year are dismal, the rig count is close to 1/4 of what it was about 10 years ago. I wonder what they are for you now reading this article?
Continue reading 2015 Alberta Oilfield layoffs…
My 2015/16 winter season job search
Like thousands of others from Canada and all over the world, I work seasonally in the oil and gas industry. I returned to the patch In late summer after taking a leave in March 2015 and things weren’t the same. The 2015 Alberta oilfield layoffs had taken their toll and things were worse than I expected. I was just fortunate enough to find a company that actually has steady work.
I opted for a small company with a steady contract over the larger company and the decision paid off for me. I worked for larger companies in the past thinking there was more stability, but this isn’t always the case as we’ve seen many of them laying off or closing their doors.
Finding work in tough times
While looking for work, I found the posted job ad numbers of some large job banks were around 1/2 of what I saw in the fall of 2014. There were more drivers posting ads looking for work than ever before.
After spending some time talking to employers I came to the following conclusion.
There are 3 main reasons why a company has an ad looking for workers.
- They have lost people because they have no work.
- They have lost people because the pay or treatment is poor.
- they are expanding their business.
#1 and #2 probably make up over 95% of the ads.
Some people were honest when I spoke to them telling me they had no work. Others claimed they had big contracts on the horizon. Always try your best to speak with someone that does the hiring directly on the phone.
It takes less than a minute to get a feel of whether it’s a place you want to work for or not. Ask them why they’re looking for workers. It’s a great question if you’re looking for them to reveal a little bit about themselves.
The #1 answer was, “ I had some people leave”. Why? Usually because of #1 or #2 above.
The #2 answer was, “I have some big contracts coming up and need to fill my trucks.”
Which is often what they told the people that just left the company because there were no big contracts that came through. So back to # 1 again.
I wish everyone the best in their job searches through tough economic times.
Oilfield traffic in the patch for 2015
I took this video heading to the rig to give you an idea of how slow things are in Alberta. I was shocked at how little traffic was on the roads. Have a peek and see how many vehicles I passed in this 1.5 hour trip condensed into a video under 4 minutes. This would have been unheard of last year.
The rates are hit hard
With drilling down, fracturing and service work is down, the oilfield traffic is quiet and business is slow all around, so that means that oilfield trucking cuts in pay came with it. Many (If not all) companies have had to lower their rates to get business and/or to keep existing business. That means the employee’s have also taken pay cuts in the process. The rates being paid now are lower than they were 10 years ago.
Companies are at the point where they bid on work just to cover their fixed operating costs. Some will even take a small loss over losing their business altogether. This makes me wonder who wins in this scenario when oil companies are now getting their work done at half price?
You see where I’m going with this right? Back to the political and corporate greed site I said I’d stay away from. Production costs are now much lower than OPEC gives the shale play market credit for. Back to deep pockets again. Who will cave in the end? We’ll wait and see.
Smaller companies in this scenario can now be purchased by the larger players for under market value.
I’ll be the first to admit that we were overpaid to begin with. There were many occasions in the past where companies would double bill, pad extra hours to a bill, and charge heavy standby rates. There was a sense of entitlement with oil patch workers that was getting a little out of hand and the 2015 Alberta Oilfield layoffs will hopefully correct this.
A lot of things are gone now. Job bonuses were a big part of this business for people working in the fracturing side of the business. Many bonuses have been cut severely or eliminated. So it’s not just the basic pay and bonuses are down, but also all the perks.
2015 Alberta Oilfield Layoffs also have corrected much of the truck demurrage time
The perks are the first to go
Most of the perks started to go in the winter of 2014/15 as we led into this slowdown. That also meant standby pay while waiting on jobs. Unlike highway trucking, we’re usually paid full rate while waiting anywhere before loading or offloading.
Frac company layoffs are typically handed out in the spring during break up. With the 2015 Alberta Oilfield layoffs they started before the spring. Some were given out in Jan, Feb, and March which is usually the busiest time of year in this business.
With the 2015 Alberta Oilfield layoffs, oilfield fly home jobs have been cut by most companies that bring in workers from other parts of the country. Foreign worker programs have also been cut.
My personal friends from back east have been forced to move out here, or lose their jobs. Most Company paid accommodations in hotels, rented homes, apartments, or camps have also been cut. So losing the perks leads to many workers increasing their expenses while their pay has decreased.
It’s been a very difficult year for so many workers and families with no end in sight for a turn around. The oil and gas prices have stayed quite low, but the price at the pump is only marginally lower.
So we’ll sit back for another year or so and have a sequel to this article sometime in 2016.
Some of the things we’ll look at next time are,
How drivers are chasing the work and contracts.
How companies are undercutting one another and some of the dirty tactics companies are using to steal work from one another.
There’s also some new games being played to steal work from other companies. This one may surprise you.