West Texas Oilfield Labor Shortage Getting Worse

The latest shale drilling boom is driving unemployment to the lowest levels in years in many of the areas that encompass the Permian Basin, a 17-county region that spans West Texas and eastern New Mexico, according to data compiled by the Permian Basin Regional Planning Commission, a cross-border coalition geared toward diversifying the region’s economy.

Reeves and Ward Counties, in the heart of a Permian sub-basin called the Delaware, are seeing unprecedented growth in oil and gas development; Winkler County, also in the Delaware, has become an active sand mining hub, driven by demand from hydraulic fracturing, which pumps vast amounts of water and sand under high pressure to crack shale rock and release oil and gas.

In February, Permian Basin Regional Planning Commission examined the workforce in the Permian region and found that its unemployment rate is at 2.9 percent, much lower than the Texas rate of 4 percent and national average of 4.1 percent. Unemployment in the region has plunged nearly 2 percentage points over the past year, pushing joblessness to levels not seen the end of 2014, a year when oil soared above $100 barrel. Nearly every county in the region has unemployment rates below the state average.

But there is a downside to the Permian’s boom, namely acute labor shortages. Nearly all of the workers who want jobs in the Permian’s 17 counties are employed, according to the Planning Commission. This has been good for workers, who are getting more hours and earning more money. As oil production rises, companies need even more workers, but fewer people are looking for oil industry jobs, according to a survey by the Federal Reserve Bank of Dallas.

As one unnamed company summed it up in the survey, “The labor shortage in West Texas is only getting worse.” [read more]

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