Wait for an upturn, or pick up stakes and look for work elsewhere? That's the dilemma facing oil workers around Carlsbad in New Mexico, where a brutal drop in petroleum prices has hit the local economy hard.

Photo: AFP

Many oil workers in the arid southwestern state have already left the campgrounds where they had parked their RVs, after being drawn here by exceptionally high salaries.

In this dusty town in the Permian Basin -- site of the planet's largest oil and natural gas deposits, astride the Texas-New Mexico border -- a worker can earn $100,000 or even $150,000 a year, twice or more than the average private sector wage there.

Salary cuts

Clenon Weaver, a 34-year-old welder sitting in the shade outside his camper, said he had told his wife back in Texas, "I'm bummed that I'm not going to work, but I'm excited to get to come home and see y'all." 

Weaver, who is trying to take things in stride -- "laughing and cutting up (making jokes) makes everything easier," he said -- plans to take a few weeks to enjoy being with his wife, their daughters and new baby girl in their home near Houston, a 10-hour drive away.

After that, he plans to start looking for work again.

Thousands of people in the Carlsbad region work in the oil business -- drilling or operating wells, or building or maintaining pipelines.

Like Weaver, many of them live in "man camps" just outside the city. In a region where real estate prices have soared after a decade of booming oil prices, they pay $600 to $900 a month for a spot to park their camper and pickup truck.

Many of these oil workers -- known colloquially as "roughnecks" because of their grueling, physical outdoor work -- have lost their jobs in recent weeks.

On April 20, the price of a barrel of American crude oil fell so sharply that it even moved briefly below zero, as storage tanks filled up amid the collapse in demand occasioned by the coronavirus pandemic.

This past week, the Permian Basin had fewer than half the active oil rigs it had a year earlier.

Sitting on a folding chair outside his camper, Benjamin Loreto says he feels fortunate to still have a job, even if his hours have been scaled back.

The 48-year-old pipeline foreman said his pay has been cut by $5 an hour and his work week sliced in half, from 80 hours to 40.

"A lot of people, they don’t got a job," he said, the raucous sound of Guns N' Roses coming from a nearby speaker. "They (are) right here, but they don't work. They just hanging around, see if something comes up."

The region is not the easiest to live in, said Jace Gentry, a 21-year-old refinery worker, who looks forward to getting back to his native Louisiana after being laid off.

"I hate it out here," he said, one knee on the ground as he stroked his pet puppy. "It's sandy and dusty; can't get a breath of fresh air no matter how hard you try."

Still, he adds, "you can't beat that money," especially for someone, like him, without a college degree. 

"People (would) do really anything, they'll live anywhere to get it."

Carlsbad has seen oil prices fall before. People remember how, in 2016, the price of a barrel fell below $30. 

In this country of "black gold," these fluctuations are nothing new. But for younger workers experiencing it for the first time, the drop has been jolting.

'It's our life'

Twenty-year-old Amber, who declined to give her last name, left home last year. She now works in a supermarket and lives in a camper with her boyfriend, an oil-field worker. 

"The situation we're in kind of gets my anxiety up," she said. Oil is "what we're depending on. It's our life, you know, so if it goes down, we're kind of left stuck."

Many oil-dependent companies here are surviving only thanks to the administration's emergency relief plan for small and medium-sized companies.

With no orders coming in from oil producers, some wells have had to close. "We didn't have anything to work on," said Michael Bassett, operations manager for an oil services company.

To keep the company's welders working in the meantime, he said, his boss had them converting surplus lengths of wire into barbecue grills. 

"Until recently, this was a good town to get back on your feet," said Michael Garner, who manages a recreational-vehicle park and previously worked in construction and welding. He's lived most of his life in Carlsbad.

Of the 120 sites in his normally full campground, 30 have fallen vacant since oil prices began to drop.

Here in Carlsbad, where unemployment was a scant three percent just two years ago, people know that black gold can turn to lead in a moment.

Garner is philosophical about it. "Anyone that's done oilfield very long knows it's up and down; it climbs gradually and it drops like a stone; when it drops, it drops fast.

"You learn to save some money."