 At the IADC Annual Meeting last Thursday and Friday in San Antonio, the oil and gas drillers continued optimistic projections for upward rig activity in the face of falling crude prices and almost record levels of storage in the United States. But the drillers are looking at long-term projections that indicate the boom in drilling is just getting started due to a combination of increased demand and declining returns from existing wells. Industry observers say every rig that's capable of drilling is in use, something not seen for the last twenty years. However, several speakers discussed increased injury rates and skilled labor shortages that have accompanied the business boom.
This same optimism was seen at this year’s May SPE/IADC Drilling Conference and Exhibition in Miami Beach, along with similar voiced concern about the availability of manpower to support the industry. Even without baby boomer retirements (50% of the workforce over the next 10 years), finding qualified people to fill positions created by the boost in drilling activity that is expected during the next decade maybe difficult. And the question begs to be answered, is the increased number of inexperienced workers a significant factor in increased injury rates?
One estimate, for the off-shore rigs coming out of the yards (deepwater and jackups due out in the next 2 to 3 years) projects a need for roughly 12,000 new personnel. Estimates for all rig types are that drillers will need to hire 30,000 new workers to staff the 500 rigs in the planning stages or under construction. All drilling companies are fishing in the same people pool to find rig crews which has driven wages to almost double what they were several years ago. Today, the low-end is about $40,000 for a roughneck and $100,000 for a toolpusher. Fortunately, these numbers do attract the younger worker looking for a career which are crucial to the future of drilling; unfortunately, the inexperienced worker increases the risk of injury accidents.
In the U.S., deaths related to land drilling doubled in the first half of 2006 over the same period last year. The numbers from the Lubbock/El Paso office inspections for the three OSHA industry codes covering the oil and gas industry are good examples. From Oct. 1, 2005 through Aug. 16, 2006, OSHA made 84 inspections in the code covering oil and gas support activities and recorded 15 fatalities, 40 inspections in the code covering oil and gas drilling and recorded eleven fatalities, and 26 inspections in the code covering oil and gas extraction and recorded three fatalities. Most of the deaths were caused by falls from high elevation, being struck, or being crushed.
One suggested solution called for a stronger focus on retaining personnel and avoiding putting inexperienced workers into the field. But many companies say they face a lack of capital for infrastructure development such as developing their own training centers or starting apprenticeship programs to improve training. However, with the increase in drilling projected for the next decade, perhaps the costs of such programs will not seem so great, especially when compared to the costs incurred by potential lost time injuries.
According to the National Safety Council, the estimated 2000 average direct and indirect costs of a lost time injury, factoring all industries, is about $28,000, and a fatality averages $980,000. Indirect costs figures above average 1.6x direct costs, but indirect costs may amount to as much as 2x to 50x direct costs. These figures indicate that the costs incurred for extra training, apprenticeships, and mentoring programs may be insignificant when compared to accidents which may occur because of inexperienced workers.
With such great predictions for the drilling industry for the next decade, these problems will be faced and met with success. The drilling companies are a large part of the history and success of the Greater Houston Area and have historically triumphed over all challenges. |
