By JACK WEATHERLY
Rosemary Smith built her oilfield rental business from the ground up over 30 years.
And the foundations of her R&R Rentals and Hotshot Inc. have been shaken twice since then.
In 2008, crude oil started the year at $92 a barrel, spiked to nearly $150 in July — due in part to speculation fueled by fears that the global supply was limited — then plummeted to less than $40 by December.
The current pricing trend is quite similar, but for different reasons.
West Texas Intermediate crude, the U.S. benchmark, reached $44 a barrel in mid-March, having fallen from about $105 in June, though it was trading at about $58 on Wednesday, with some talk of it reaching $60 in the near future.
Meantime, the U.S. drilling rig count has fallen about 40 percent between June and March, Reuters reported recently, citing a Baker Hughes survey.
America has produced a glut of oil, along with natural gas, in recent years, thanks to a breakthrough in drilling technology called hydraulic fracturing, or tracking.
Natural gas has fallen from more than $13 per million BTUs in 2008 to $2.56 Wednesday in intraday trading.
Mississippi positioned itself with the Tuscaloosa Marine Shale in the southwestern part of the state to take advantage of the technology.
Three or four years ago, oil exploration companies started drilling wells in the formation, which encompasses all or part of three counties in southwest Mississippi and eight parishes in southwest Louisiana.
Unfortunately, the state got into the oil game a few years after the 10-year trend peaked.
Smith and many others in the industry are weathering the storm.
In February, Smith had 38 employees. Now she has 22.
“It’s very, very slow. I probably won’t let any more go unless I just absolutely have to,” she said.
The company is supporting three drilling operations in Mississippi and two in Alabama, she said, adding that in the recent past, there would’ve been 10 to 12 jobs in Alabama this time of year,
Operators are looking for ways to cut costs, short of halting drilling, she said.
“They’re taking full [advantage] of the vendors,” she said.
Smith said several operators in the Tuscaloosa Marine Shale have had layoffs, but site managers referred the Mississippi Business Journal to their corporate owners, who did not respond.
Employment of Mississippians working for companies registered in the state ended 2014 with 10,186 working in all facets of the industry in December, according to the Mississippi Employment Security Department. The average monthly level for 2014 was 10,536.
However, the full effect of the slowdown won’t be known until till after the first-quarter figures for 2015 are in, which will be reported to the U.S. Bureau of Labor Statistics in June.
The Wall Street Journal reported that “direct employment in oil and gas extraction, which had grown by more than 50,000 jobs since 2007, has fallen by about 3,000 jobs since it eased in October at 201,500, according to the Bureau of Labor Statistics; 12,000 jobs have disappeared from the larger category of energy support since it reached 337,600 jobs in September.”