With OIL Down 40% in just a few weeks.......How does employment look

[AGL4now]

I was going to try and see if I could sneak this subject into the Natural Resources Forum, but it may squeak past management here.

With oil down about 40% what is the feeling in the oil patch as too the future of Oil Field Employment....??? I ask because for Alaska, as goes the Oil economy, so goes the entire State of Alaska economy.

I think this thread will get closed in a heartbeat if it get's side-tracked into Government Tax structure, so please leave that OUT.

With Oil down from $107.00 to $66.00 and expected to drop below $60.00.........For those of you in the know, what are you hearing. I should think this is important information for anyone thinking of moving to Alaska in the near future.

Some of you were not even born the last time this happened about 1982 through 1992 or 93'

Please no political bickering......

[mike h]

I wonder how much it will actually matter given the recent revenue restructuring by Parnell.

Does anyone know how the state actually makes revenue off oil right now? As in, what is the actual formula?

[mike h]

Google doesn't tell me how it works and the .gov site has so much information it's impossible to sort through.

Edit: ADN has some math. It's bad: http://www.adn.com/article/20141127/...il-prices-drop

[AGL4now]

The Oil Price is down and it has zero to do with Alaska tax structure......Zero. If we talk taxes Mike or Brian will close this thread.

I want to know what the talk is about employment for the future in the Alaska Oil Industry. I just read that BP is going to start laying off mid-level management personnel in the NON-production areas.

[hoose35]

No panicking yet. My feeling is, Alaska is a small oilfield so the boom and busts aren't as dramatic as other places. Things are really busy this winter, haven't heard of anyone pulling out yet

[tccak71]

Seems like gas ought to be under $3/gallon at $66 barrel. Love to see it drop and settle at whatever rate it takes to get gas to $2/gallon.

As far as this thread; oil companies will lack incentive to find new oil with prices bottoming out and there will probably be layoffs or transfers. Not to mention the loss of revenue for the state. Legislature shoulda been coming up with a fiscal plan for YEARS. Never happened.

[AGL4now]

Oil Down 3.9% more today.

In the 80's 67% of Alaska banks went bankrupt, Tens of thousands of people lost their homes. 85% of the lumber retail companies went broke. Homes that had sold for $160,000.00 were selling for $35,000.00 and most of the people who bought them for $35,000.00 later lost them when they dropped to $24,000.00 and the buyer became unemployed.

[Paul H]

Oil prices are cyclical and they will continue to spike and drop for a variety of reasons. In the ~17 years I've been working in the oil industry in AK I've seen it drop to below $10/bbl, and peak at around $140. Assuming it doesn't drop to $40/bbl and stay there for a prolonged period, I don't see the low price as the end of the world for the industry.

The bigger problem in Alaska is the state government that has yet to see a program or project it will not fund. The question is what affect will government cutbacks, and/or the implementation of a personal income tax have on the state.

Unlike the 80's bust, we didn't have a huge boom in the Alaska oil industry like they had in the Dakotas, so with a slightly more diversified economy today, I don't think the shock will be as severe, but who knows?

[NRick]

CNN April 2002:

"Crude oil prices rose to their highest levels in six months Tuesday, driven by escalating violence in the Middle East and the threat of an embargo by Iraq.

The price of a barrel of light crude oil for May delivery surged above $28 in New York. Oil has risen almost 50 percent since a mid-January dip below $18 a barrel."

I'm not overly worried just yet.

[limon32]

Seems to me much of the development around the peninsula has been natural gas based, is that pricing linked to oil at all?


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[kasilofchrisn]

I haven't heard anything myself. I head back to the slope Tuesday and will keep my ears open.
I do know they like to keep slope crude ~$80 a barrel to be happy with current plans etc.. They said that 2 or 3 years ago.
I know that in the oilfield I work in we have a few big projects in the works for this winter.
Those will most likely continue on as they will be big oil producing projects that are most likely already budgeted for.
They may cut back on exploration this winter or something like that.
I'm sure if this price trend continues they will look at cutting contractors by a % to start with and a few non essential personnel somewhere.
There are some projects they are internally mandated to finish so some cuts may bot come this year but next year if the trend continues.

[JR2]

Hearing rumors of things slowing down in the L48. Rig crews from Penn an South Dakota arrived to run a rig for the winter.

[AGL4now]

Yes, It appears that some of the oil shale operations need higher price just to break even. There is some talk by some OPEC members that price could drop to $40.00 a barrel. It is down $10.00 just in the time this thread was born. Down to $57.75 Friday.

The reason that this is relevant to people thinking of moving to Alaska, and being employed, is this effects or will effect nearly all employment levels in Alaska that have zero to do with oil field employment.

[AlaskanTides]

Not worried

Yes, It appears that some of the oil shale operations need higher price just to break even. There is some talk by some OPEC members that price could drop to $40.00 a barrel. It is down $10.00 just in the time this thread was born. Down to $57.75 Friday.

The reason that this is relevant to people thinking of moving to Alaska, and being employed, is this effects or will effect nearly all employment levels in Alaska that have zero to do with oil field employment.

There is ups and downs to every aspect of the economy....historically there always has been and always will be. In this century we will not see the end of demand for big oil. If we developed a new super fuel tonight we would still have 100 years of legacy equipment to even begin phasing out. Everything from fighter jets to electrical power plants to diesel trains.. Oil is at the basic infrastructure of just about everything in modern life ... From the tires on your car to the IV in your arm. Currently OPEC still has big influence on the market..however the new technology for extracting she'll oil and the rate at wich America is losing dependence on foreign oil is starting to make them sweat. I think they are trying to influence the market by driving down prices .. This way new investors don't want to invest in new exploration. I have no proof other then I know that everything is a pendulum and somewhere there's a balance. One thing is for sure though.... Oil is a depleting resource that the entire world depends on. Smaller countries are still industrializing and bigger countries are only developing a bigger appetite. Any down spiral to oil prices are just temporary


just my opinion

[AGL4now]

I am NOT worried either.