U.S. crude oil production growth may have slowed down this year, but the largest oil-producing counties in the Permian basin continue to feel a shortage of labor.
The predicament for small oil services business owners in New Mexico is aggravated by the surge in worksite audits, investigations, and arrests as part of U.S. President Donald Trump’s tougher stance on illegal immigration.
A growing number of owners of oil-related businesses in the second-biggest oil-producing county in the United States, Lea County in New Mexico, now avoid hiring undocumented immigrants for oil field work, fearing the clampdown on immigration will affect their business, Reuters reporter Andrew Hay writes.
There are still oil field services business owners who continue to hire an illegal labor force.
Yet, those who want to play by the rules find themselves between a rock and a hard place. On the one hand, President Trump’s pro-oil policies clash with impact from the crackdown on immigration, which makes business owners idle drilling rigs and equipment not because they have drilled out all the shale wells in Lea County, but because they can’t find legal immigrant workers to do some of the dangerous difficult jobs on the oil field that some Americans shun.Related: Brazil Eyes A $1.45 Billion Payday As Big Oil Flocks To Pre-Salt
Oil field business owners say that the lack of a system to get illegal oil workers documented or given working visas is impeding the oil industry from having enough labor force to take full advantage of the unprecedented—albeit slowing—oil boom in the United States.
“They’re demanding more rigs, more swabbing units, but you don’t have enough employees,” Johnny Vega, who runs Mico Services in New Mexico, told Reuters’ Hay.
Vega’s company generates some US$17 million in revenues per year. But right now, during the period of booming oil production in New Mexico, the firm has equipment idled, because there aren’t enough legal immigrant oil workers to operate it. That idled equipment could make Mico Services as much as US$700,000 per month. The lack of documented workers, however, has had Vega thinking about hiring out the company’s idled equipment.
Other oil field businesses also feel the labor shortage, especially as oil production in the U.S. and New Mexico continues to grow.
Lea County in New Mexico is the second biggest oil producing county in the United States, second only to McKenzie County in North Dakota.
“Our production has roughly tripled in the last five years,” Steve Vierck, former CEO and president of the Economic Development Corporation of Lea County, told Hobbs News-Sun in May this year.
“It really reflects not only how much oil production there is, but how much growth there has been in oil production to move up the chart as fast as Lea County has,” Vierck added.