Oil Boosted Weld County's Economy. Now, Sudden Layoffs Have Left Many Out Of Work | KUNC

Oil Boosted Weld County's Economy. Now, Sudden Layoffs Have Left Many Out Of Work

Apr 30, 2020

When Mark Cleveland took a job as an electrician for a Denver-based fracking company four years ago, he did it for the money. E-techs, as they're known, can make upwards of $70,000 a year.

"It's hard to find a job where you can have a single income and pay your bills and not worry about living check-to-check," he said. "It wasn't what I expected to be doing by any means, but it worked out."

But in early April, Cleveland got laid off. The cuts were "in response to current market conditions," his company, Liberty Oilfield Services, said in a notice issued that day.

Cleveland, a Greeley resident and self-described "vigilant news consumer," said he saw it coming. He'd watched for months as the world's biggest oil producers argued about an oversupply on the market. The arrival of COVID-19 had only made things worse.

"This is going to sound bad to say this," Cleveland said. "But I feel like my career in the oilfield is dead."

As the price of oil tumbles on the global market, companies that drill and maintain wells in Northern Colorado are shedding thousands of their workers — despite being deemed "essential" — to cope with what many are calling "unprecedented" industry conditions.

The state recorded nearly 500 unemployment claims from oil workers in the first week of April alone, with hundreds more expected as companies continue to pull back on drilling new wells. Last year, the industry had an average of just 29 claims per week.

"Times are tough for everyone," said Dan Haley, president of the Colorado Oil and Gas Association. "We need to effectively address this health crisis and get people back to work, so that global markets can begin to function again."

Amid COVID-19 shutdowns and travel restrictions, global demand for products like gasoline and jet fuel have plummeted. The price per barrel of U.S. oil, as of Wednesday, was sitting below $20 — a far cry from the $55 price at the start of this year.

Last week, prices briefly dipped into negative territory, reflecting a historic collapse in demand for the commodity, analysts said.

That volatility has a direct effect on the number of rigs operating in Northern Colorado, where roughly 30,000 people are directly employed by oil and gas drilling. The region's rig count has dropped at least 40% since mid-March, said Bernadette Johnson, an economist with Denver-based energy analytics company Enverus.

"A majority of operators have come out with announcements saying they're going to lay down rigs, they're not going to turn wells in line, production is going to come off," Johnson said.

Even as some parts of the economy start to reopen, the oil industry's recovery will likely lag behind other industries.

"It's not gonna be like a restaurant, where you have 10 servers and you bring 10 servers back as soon as people start filling those tables again," Johnson said. "You're gonna trickle that in and it's gonna be based on the price of crude and the price of natural gas."

A gas station sign in Greeley shows prices below $1.50 a gallon. Fewer trips to the pump for residents has meant low demand for oil across the country, and ultimately a need for less drilling activity in Weld County.
Credit Matt Bloom / KUNC

Despite the disruptions, some workers, like James Smith of Greeley, are holding out hope that the recovery is swift.

Smith, a truck driver who usually makes about $24 an hour, still has a job. But his company recently had to cut pay and hours because there's less work available.

Now, instead of working 60 hours a week and bringing home about $3,000 every two weeks, he's lucky to get half that much.

"I have a certain way of life that I've been able to afford for years," Smith said. "And now I can't."

Smith tried interviewing for other commercial driving jobs to fill the gap, such as distributing food for Walmart and fulfilling Amazon deliveries. But none pay nearly as well as oil and gas, Smith said.

While inquiring about job opportunities at one company, a frustrated hiring manager yelled at him over the phone.

"I had a gentleman yesterday tell me, 'I'm sick of all you oilfield people calling me and expecting you're gonna make that much money. The oilfield is going away. You're not going to get that back. You need to realize what you're worth,'" Smith recalled.

The interaction was disturbing, Smith said, because he's made good money in oil and gas for more than six years.

"I know what I can make," he said.

he top of a drill rig in Weld County. Northern Colorado’s rig count has dropped at least 40% since the beginning of March, analysts say.
Credit Matt Bloom / KUNC

The typical pay for oilfield workers depends on their position and experience. But the wages for jobs like drivers and electricians do tend to be higher than in other industries, according to the Bureau of Labor Statistics.

Even so, E-tech Mark Cleveland said he's finally had enough of the industry's booms and busts. He doesn't want to wait around for the recovery to happen.

So he started looking into security jobs. He also tried selling video game accounts online to make some extra cash. He has a few months of savings built up, but he feels stuck.

"It's kinda wait and see," he said. "Cause everything I see out there I could get would actually pay me less than what my unemployment would pay me from the oilfield. So there's not a lot of incentive."

He almost got scammed applying to an Amazon warehouse job, which was frustrating. But he's optimistic with the state's stay-home-order lifting and some businesses starting back up again, he'll find something — and soon.

"I don't want to just stay stagnant," Cleveland said. "I want to be the man in charge one day."