Musings Yet Again

I haven't published a new blog in a while. Perhaps it's because I find a lot of creative time going towards building and maintaining my Facebook page; which deals with a lot of the same issues and topics. I also believe that a lot of how you face things, and complete the day to day slog, is based on your attitude. That has also limited a lot of what I like to discuss lately because things in the petroleum world have been very negative. The oil glut and falling prices of fuel and gas directly affects every facet of what is going on in the oil patch here in South Texas. I suppose that rings true in North Dakota and everywhere else they are pursuing "black gold". At one time diesel selling for around $2.00 a gallon would be cause for celebration. After almost four years of working in the "biz" our attitude is remarkably different. I personally think that oil selling for much above $100 a barrel is a thing of the past. What we really need is for things to bottom out and stability to take over. Unfortunately; all we are seeing is prices continuing to decline. One positive note that we have heard and observed is that there is still a ton of infrastructure that needs to be completed, in order to connect all the pieces, and get the oil and gas moved out of here.

 

Though I am not a bible thumper and refrain from proselytizing, I have to say some evil things have occurred of late. We have some depraved murderers pretending to act in the name of Allah determined to establish a Muslim caliphate, ruled by Sharia law. They place little value on human life; seemingly able to come up with a new and unique way to murder anyone who stands in their way. I started this paragraph before I found out that the co pilot intentionally flew the Germanwings Airbus into a mountain in the French Alps. One was definitively suffering from some sort of mental malady and I guess it can be argued that they both are/were. Look, I admire anyone that is so devoted to his or her beliefs that he or she is willing to die for them. Where I have a problem is when they involve innocents in the dying part of that belief. It's there that I also get off the train when someone twists the Koran to fit his or her beliefs. With all due respect I believe anyone is wrong when they believe that their deity or idol sanctions the taking of innocent lives. I am unfortunately resigned to accept that any sort of long term peace in the middle east will be fleeting, at best. How ironic that we set things in motion by deposing Saddam Hussein. It is his followers that make up the core of ISIS leadership. Even more serendipitous is that we had its leader confined in Guantanamo at one time. You may wonder why you should care about a conflict that is thousands of years old. With the involvement of both Iran and Saudi Arabia we now have a full fledged regional war. Add to that weak leadership in the United States, and the nearby civil war in Syria, and you have a powder keg ready to explode. Let's hope that doesn't happen.

Slogging Along

We are on a pipeline and construction gate. Maybe it's the funding (or lack thereof); but the care and maintenance of a gate guard pad is not even on their radar. That is one of the very few regrets we have about this type of gate guarding. Especially since the work itself is so easy. Recent rain has exacerbated this problem and we have not only a muddy driveway, but also ponding and flooding. The last gate we were on we buried the 5th wheel almost half way up the rims-took two pickups in tandem to pull it out of the muck. It's not quite that bad at our current location. Of all the things that I discussed and researched before embarking on this adventure, rain and mud was not one of them. I do love this kind of gate guarding, so don't get me wrong. We used to be a top dog with our exploration company and anything the CM (company man) couldn't or wouldn't get us, our field superintendent would. That included leveling a pad and providing and spreading a load of gravel. We kind of miss being part of the team on a drilling rig. We knew the schedule and what to expect (most of the time). However; when I think about getting paid for a 24 hour gate with little or no weekend or evening traffic I think we can learn to live with it. Even if it means living on an unimproved pad and having to slog around in ankle deep water and mud.

Reality Sets In

Anytime a commodity starts appearing in abundance you can usually expect its value to drop. This axiom doesn't always apply in a global economy; but it has tremendously affected the price of oil. A few years ago OPEC had a stranglehold on the availability and supply of crude oil. Prices soared, especially with the rumors that the supply was short. Political unrest and violence  also abetted the volatility and cost of oil. As most know, we have seen a barrel of oil fall to unprecedented levels-almost $40 a barrel. This from a recent high of $145 plus. A strange thing happened at an OPEC meeting last year. Rather than curtail supply to counter the abundant discoveries brought on by directional drilling and the removal of oil trapped in shale deposits, OPEC decided to maintain (and even increase) its production. The inevitable happened and we now are locked in an economic battle of wills; with tumbling prices causing wholesale panic in the petroleum industry. A perfect storm has occurred, as China and the world economy in general have slowed exponentially. And; along the lines of "no good deed goes unpunished"; years of calls to conserve and increased efficiency of internal combustion engines have lowered domestic demand.

 

In the gate guard world, the perfect storm was that word had gotten out that fairly easy money could be made living and working in the oil patch in South Texas. The result was a yearly increase in the sheer number of candidates vying for a finite number of jobs. (A horrific winter hasn't helped either). With the onset of the oil glut, you inevitably ended up with folks basically wintering in South Texas, unable to secure a gate. A few were "lucky" and were able to live off the largesse of a few guard companies by staying in their company yards. Expect this tradition to undergo radical change, as early as the upcoming winter; if not sooner. Back in the day the demand for guards; especially in the summer, almost demanded that a guard company keep folks on standby-no more. This summer should be telling in the gate guard community.

 

While it has been difficult to see our kindred spirits struggle to find work; until recently is hasn't hit close to home for us. My sour predictions have unfortunately borne fruit and we are seeing the affects of cuts amongst those that frequent our gate. New faces are a poignant reminder of those no longer serving our job site and the layoffs are starting to have a profound affect. Some changes were needed and excesses curtailed; but that hasn't lessened the pain. As gate guards it is imperative that we remain in good stead with the companies that we are charged with protecting. While the vast majority of guards probably conduct themselves in a responsible, professional manner; a reminder to do so may be in order. I inadvertently received a tip from a reputable source the other day. Simply ingratiating yourself with the people you work with can go a long way to extending your longevity. Also make sure you get your name out there, so they know who you are.

As time inevitably rolls on, the winter Texans will head back north and gates should come available. The question is how many? The economic viability of directional drilling is in grave peril and this could signal the end of drilling as we currently know it. I believe the days of gate guarding from an RV are nearing an end. Before long, uniformed guards and shacks will be the order of the day. The worst case scenario is if oil never fully recovers and we have a complete bust; not unlike the one in East Texas in the late 70's and early 80's. Then we'll simply have low cost guards babysitting anything that's left that is worth protecting.

I have heard pundits say that oil will both sink to $20 a barrel or rise to $200 a barrel by years end. There's no telling who is right. I do not think we'll see $150 a barrel oil for some time. Let's hope I'm wrong.