Small rig, in mine, 1972. A type that's change a lot.
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After weeks of running "we don't see it here" articles about how the slow down in the oil fields wasn't being felt in Wyoming, Schlumberger's decision to lay off 9,000 employees made it impossible to deny, so the Tribune ran a series of articles about how things are, indeed, slowing way down in the oil field, and even asking "is the bust here?"
For those who are close to a story, it's interesting to see how far behind a trend the press really is. Yes, the bust is here. It's been here for weeks.
The Schumberger story, which of course is a national layoff (or maybe a global one) makes ignoring things, or putting a rosy face on them, impossible, but it actually isn't a symptom that the slow down has begun, that's been going on for weeks. Layoffs have been occurring, the press just hasn't noticed. Rig counts are declining, and so on. For those who work in the oilfield or in industries closely associated with it, it's impossible at this point not to be aware of it. Moreover, everyone in the collection of related industries is in fact preparing for it. The state government is now trying to prepare for it as well.
None of this means, of course, that the price can't rebound and be back up in six months. But those taking a continued rosy view of this have to realize that oil exploration and production is like a military campaign. You can't just decide to go out and get to work overnight. All of the equipment is heavy duty, and a lot of it is specially built and often one of a kind, including the rigs themselves. You can stack them for a few months, but after that, you really can't just plug them in and go.
The crews are the same way. Most men, and it mostly is men, who work in the oilfield are young men, or if they're older, that's because they've moved up the chain. The young men who get laid off during a bust don't come back to the oilfield, ever. They go on to other work, as indeed they tend to do so as they age anyhow. So if things last more than a few months, those crews are lost to the industry. So even if things rebound this time next year (which they won't, as they don't rebound in the winter), there'd be a gap before things got rolling again.
If they ever do, and that's the big unknown. Right now, the state is predicting that the price will remain low through the year. And if the price is low, exploration will be low. But will it remain low, basically, forever? That's a real possibility. If we're just in another boom/bust cycle, they won't. But if we've entered a new petroleum economic era, and there's some evidence that we have, they might never rebound. With ever increasing environmental concerns, growing acceptance of regulation on fossil fuels, and the like the depressed price might have no real influence on demand, and in that case, higher prices won't return.
For Wyoming, that's a triple whammy. Coal is already falling through the floor price wise and so subject to increased regulatory attention that the Governor, in his State of the State speech, promised to "fight for coal". But there's really very little he can do. Gas prices have fallen and can't get back up, making the gas boom that preceded the oil boom a gas bubble. Now oil is declining.