Oil Industry On The Verge Of Total Collapse?

Posted by | 02/06/2016 | News

Oil Industry On The Verge Of Total Collapse?

Just when you think things couldn’t possibly get any worse in the oil industry…..

Is the oil industry on the verge of total collapse? Is it only a matter of time before it’s all over? What if every single oilfield company shut down? With bad news coming out of the oil industry day after day, it’s starting to make a lot of folks wonder. Every day an oil company is announcing cutbacks, whether it’s layoffs, a cut in production numbers, a reduction of rigs, or even completely liquidating certain departments within their company in hopes of remaining afloat, as Trican Well Services already has. The times are dark, and the future sheds no light on the price of oil recovering any time soon.

If you’ve been following the news, you’ve seen what’s going on with the price of oil. We’ve went from oil as high as $145 a barrel, to fluctuating in the $20 to $30 range at the moment. Some of you have lost your jobs, your careers, and your life. The price of oil is not only affecting the workers themselves, it’s starting to affect all the oil towns that claimed home to the boom. The oil industry is shedding jobs everyday, with oil companies taking drastic measures to avoid total collapse.

Looking at the bigger picture, we’re about to be facing a real estate crisis in many of these oil patch towns. A few years ago investors and bankers rolled the dice hoping to cash in on the next boom. Banks have been through this mess in the past, they know every time there’s an oil boom there’s a bust. This time investors had to meet strict guidelines from the banks, in order for the banks to protect their investments from such high risk business loans.

The Oil Industry Explodes Into An All Out Boom Creating Chaos Both Good And Then Bad

Instead of builders/developers taking out their usual operating loans, banks made the investors/developers agree to paying back these loans in just a few short years in most cases. For instance apartment buildings, the term lengths on the loans were adjusted to the point that they were almost unaffordable. All across the country in these boomtowns there were apartments being rented out for more than the same style unit would go for in Manhattan New York. Rents were being advertised anywhere from $2000 for a small apartment, all the way up to over $3000 a month in some cases.

In many of these towns there was nowhere for people to live when the boom took off, and many of these people ended up sleeping in their cars. In some cases where the weather was nice, people were setting up mini tent cities in locations such as Texas. Man camps were brought in for the oil workers, but with only so many beds available it was no match for the number of workers moving to these areas, hoping to land a high paying job in the oilfield.

The amount of emails we received on one of our other sites during the boom about jobs and housing was staggering. The stories we heard were from all kinds of backgrounds. In some cases, people were desperate to find work and would stop at nothing to figure out a way to get one of these high paying oil jobs. Whether it meant traveling by train, plane, or automobile, and in some cases hitchhiking, they were literally packing their clothes and heading out with nothing more than gas money and a few days worth of money for food. These people were risking it all, with hopes of getting hired and going to work right away.

In one instance, a person was traveling from Florida to Williston North Dakota with a very small budget in an older vehicle. They made it half ways across the country before they ran into car trouble and had to use their budget for fuel to get back on the road, the problem was they now had no money for food or fuel, they had to make a decision, it was either panhandling for gas money, or leaving their car on the side of the road and hitch hiking.

We heard story after story¬†from desperate people trying to get hired in the oil industry. The strong majority of these stories came from hard-working family oriented ¬†people that were trying to save their houses from being foreclosed on. They were in towns where the economy wiped out all the jobs, and couldn’t find work anywhere. Hoping for a miracle, they ventured out to their destination to cash in on the boom and save their lives back home.

Since oil prices have tanked, many people’s lives have once again been turned upside down. Hundreds of thousands of workers are out of jobs. Oil companies are going broke every day, and some oilfield companies including major operators are on the verge of total collapse. Small cities that played host to the oil boom and even some states are facing budget emergencies themselves, as they estimated yearly budgets well before the price of oil collapsed. The collapse of crude oil is taking its toll on everybody, not just oil workers.

 

 

One Response to “Oil Industry On The Verge Of Total Collapse?”

Sorry, the comment form is closed at this time.

Close