Oil and gas workers get a raw deal: It’s Time for a Fair and Green New Deal
Boom, but Mostly Bust
I lived in Houston in 2014. In a matter of months 86,000 people lost their oil and gas jobs in Houston alone. Tens of thousands of people couldn’t pay their mortgage, car note, health insurance or buy their kids’ Christmas gifts. “For Sale” signs blanketed whole neighborhoods and devastated families looked for other options. This was part of the national downswing where the oil and gas industry shed hundreds of thousands of jobs. Oil and gas states are no stranger to boom and bust. The $/barrel of oil has hovered between $50 and $70 for several years now and these employee trends feel familiar. When times are good there may be a new truck in the driveway and when times are bad (and they often are), away goes the new truck and oftentimes, so too goes the house. Time and time again, it is workers and families who are asked to pick up the slack during down times while oil and gas executives and shareholders continue to profit.
Meanwhile the oil and gas industry is turning to Silicon Valley to scheme how to automate those jobs and make more with less people. As of 2019, Houston has only regained 24,400 jobs. Between 2013 and 2018, the oil and gas industry has cut the number of jobs working Gulf of Mexico platforms in half. In the spring of 2019, nearby Louisiana shed an additional 1,100 oil and gas jobs. The top five oil giants generated more profits in 2018, when crude prices averaged just $71 a barrel, then in 2014, when global crude sold for an average of almost $100 a barrel. In write ups, analysts will credit these returns to ‘discipline’ and ‘restructuring’ and ‘automation.’ This is of course code for firing lots and lots of workers.
Outsourcing Risk
Replacing human labor with machines is often touted by businesses as an effort to improve safety; but as jobs disappear, the ones remaining are becoming more dangerous. The oil and gas business has risk, but these risks are made more dangerous by the callous cost-cutting of its top managers. Following the BP Texas City refinery fire that killed 15 people and injured 180 more people, the Chemical Safety Board produced a 341-page report on the tragedy which identified a major factor: corporate cost cutting. BP had inherited the 71-year-old refinery from Amoco, which had long neglected maintenance and safety upgrades. Yet after BP took it over in 1999, London demanded a 25% budget cut.
According to the Bureau of Safety and Environmental Enforcement Gulf of Mexico fields have seen 50 reported collisions, 515 reported fires and explosions, 95 reported oil spills, 1,067 injuries and 9 fatalities just between 2013 and 2017. As a result of this industry-wide mandate to “cut costs,” the oil and gas industry fatality rate is 7.6 times higher than the all-industry rate. From 2008 through 2017, 1,566 American oil and gas workers died from injuries in the oil-and-gas drilling industry and related fields, according to data from the U.S. Department of Labor’s Bureau of Labor Statistics. That’s almost exactly the number of U.S. troops who were killed in Afghanistan during the same period. It’s important to sit with these statistics. Fathers, mothers, sons, daughters, husbands, wives, veterans and survivors of war, neighbors and friends are burned alive, crushed by unsecured cement blocks, and suffocated by unmarked chemicals by companies that do not care about them. To an oil and gas executive these are just numbers on a spreadsheet, but to even a casual observer it looks a whole lot like murder.
Stolen Bounty
While employment in oil and gas becomes increasingly dangerous, wages in these industries remain stubbornly flat. In the age of efficiency and contracting out — roustabouts, roughnecks, floor workers, drillers and mud engineers no longer share in the boom bounty. An entry level roustabout today is likely to make between $19-$21 an hour for hard, unrelenting labor. Workers are profit creators, but they rarely share in that profit. Wage theft is rampant in the industry. Since 2012, the Department of Labor conducted 1,100 investigations of oil and gas industry employers and have recovered more than $40 million for more than 29,000 workers nationally. Oil and gas executives routinely use slimy accounting techniques to steal from workers, denying workers earned benefits such as earned medical leave or earned unemployment insurance. Saving the owner money or “preserving shareholder” value often means stealing directly from the worker’s pocket.
If you recall the 2010 BP oil spill disaster that killed 11 workers and injured 17 more, there were several companies that took turns pointing fingers at each other: Transocean Ltd., BP, Anadarko Petroleum Corp, Cameron International Corp, and Halliburton. While companies certainly have individual expertise and capital to bring to a project, this structure is intentional for several reasons. First, as demonstrated with the BP (Anadarko, Transocean, Cameron, Halliburton) spill, it allows for a convenient game of liability hot potato. It also makes the task of classification that more difficult (oil company or oil field service company?), which makes it harder for agencies to effectively regulate and collect data, and thus easier for companies to evade regulation and reporting. Finally, if there are 20 workers on an oil rig but at most 6 work for the same company, what are the odds that these workers will ever join forces to ask for safer conditions, fair pay and honest treatment for their work? This is a foundational characteristic of the “oil and gas industry culture.” Isolate and dominate.
Bless this Mess?
Oil and gas companies don’t just make bad employers, they make terrible neighbors. An oil or gas well that is not properly plugged before being abandoned, especially if the well operator goes bankrupt, is typically defined as “orphaned.” Estimates for the total national population of abandoned onshore wells in the U.S. in recent years range from over 2.3 million (Townsend-Small et al. 2016) to approximately 3 million (Brandt et al. 2014). But the total count is likely 10 million [onshore] wells that puncture the United States. These wells (adjacent to schools, smack dab in the middle of pasture lands, in private backyards, etc.) pollute water, emit gas, and are a general nuisance to thousands of communities (Louisiana. Texas. Ohio. Pennsylvania. West Virginia. To name a few.) In 2014, an Ohio elementary school evacuated its children because of a gas leak traced to an abandoned well underneath the gym. Near the West Texas town of Imperial, effluence from decades-old oil wells has created a “lake” of salty, sulfurous water. These aging wells make Americans sick and contribute to poor health throughout the nation. States have their own programs to fund and deal with their orphan well problem, but they tend to be poorly funded, vulnerable to economic shocks, and inadequate to the task. The Louisiana Oilfield Site Restoration Program, for instance, is able to plug 160 wells per year, but 123,820 abandoned wells pockmark the eroding state with more wells orphaned each year. Assuming a median $100K per well, Louisiana citizens are facing $12 billion (or $3 thousand per capita) in cleanup costs. More than half the states in the nation face similar looming catastrophes, such as Ohio with its almost 159,000 abandoned wells. The Gulf of Mexico is also home to more than 27,000 (and growing) abandoned oil and gas wells. This is not counting the thousands of onshore and offshore abandoned in place pipelines that scar American landscapes.
The U.S. Environmental Protection Agency (EPA) estimates that in 2016, onshore orphan oil and gas wells throughout the nation emitted 7.212 million metric tons of carbon dioxide equivalents. Put another way, this is like putting an additional 1,557,792 cars on the road.
America’s Gain
Between layoffs, outright theft, and murderous working conditions — the oil and gas industry has demonstrated one common theme: workers are expendable. Between the hundreds of thousands of polluting orphaned wells and thousands of miles of abandoned and leaking pipelines, the oil and gas industry has shown no regard or respect for Americans or their land. So what can we do?
From project managers to roustabouts, these Americans deserve good salaries, benefits, and safety on the job. There is a tremendous amount of American talent and expertise that can help clean up our communities and combat climate change. The oil and gas industry has repeatedly demonstrated that it cannot clean up its mess nor can it be trusted to protect and compensate its employees. The greedy and willfully negligent oil and gas industry’s loss can be America’s gain.
It’s time for Americans and our elected representatives to act. We can and should create a national program and a national workforce of former oil and gas workers to rid our communities of the oil and gas industry’s polluting orphaned wells and abandoned pipelines. We can and must enact a moratorium on oil and gas leasing on federal and state lands until companies are uniformly insured and bonded. We can and must commit to rapid decommissioning timelines so that we can protect our communities and stop the global warming emissions from these orphaned wells. We can and must bring the oil and gas industry’s nefarious deeds from the shadows and into the light of day. We can and must modify the IRS tax code to eliminate any and all preferential treatment of oil and gas activities, including depreciation of infrastructure (yes, the stuff they leave American citizens to clean up they also wrote off on their taxes).
And we can pay for all of this with revenue saved from ending oil and gas subsidies and a CARBON CAPITAL GAINS TAX. A carbon capital gains tax will shift capital towards renewable energy. It will make revenue available to our nation to clean up orphaned wells and abandoned pipelines and it will fund modern transit and infrastructure build-ups. A carbon capital gains tax will finally make the people directly responsible for the oil and gas industry’s predatory practices divest and unleash needed capital on creating a green new deal for all. Finally, a carbon capital gains tax and a national orphaned wells and abandoned pipeline program will provide oil and gas workers the recognition and gratitude they deserve, good pay and better benefits, and safety on the job. It’s time to commit to a fairer and green new deal for American oil and gas workers.
My proposal: the Abandoned Well Act of 2021 which would create the Abandoned Well Administration (AWA) and implement necessary reforms to the regulation of existing oil and gas production. The AWA would be a new executive-level agency that would recruit and directly employ a new federal workforce of displaced oil and gas workers. AWA civil servants would identify and safely decommission the millions of oil and gas wells and related infrastructure across our nation via 30 field offices and an arsenal of rigs and equipment, equipment owned and maintained by the government. The AWA would oversee and manage a national monitoring and safety response program, which would include a citizen’s portal and hotline that allows frontline communities to directly alert the AWA of fugitive emissions, flaring, and other oil and gas well related emergencies.
We the American public are being asked to make a false choice — sacrifice a livable planet or cast aside thousands of humans and their families and the local economies they support. That is not the choice we have in front of us. The oil and gas industry has already discarded those workers and abandoned those communities. The oil and gas industry can no longer hide behind the claim of job creation. But we, the American public, can employ every single worker and rebuild every single community. From rig managers to drillers, and roughnecks and roustabouts — each possesses valuable and needed skills to make our communities safer and healthier. And those AWA paychecks will pay local mortgages, fund local governments and schools, and support real families. We are no longer in opposing camps. Rural communities, cities, workers, all of us — we face a common threat. It is time we fought back.
