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Welding for oil: This bust shall pass

In Texas, talented people and smart companies prevail

In Odessa, Texas, idle derricks sit in an inventory yard. Photo courtesy of James Mosman.

James Mosman has less traffic to deal with now. The certified welding inspector (CWI) and associate professor of welding technology at Odessa College has seen busts before. Two years ago he saw companies all around town fabricating equipment for the oilfields, including derricks. These days he still sees a lot of derricks, but they’re just sitting in inventory, not being used.

Odessa, in western Texas, is in the middle of the Permian Basin, one of the largest oil and gas plays in the country. When I talked to sources in Odessa a year and a half ago, many told me they had endured booms and busts before, and yet somehow this time seemed different. Had new drilling technology in the oilfield changed the fundamentals?

Not so much, it turned out. Of course now the same questions are being asked again: When will the bust end? Will oil prices ever rise to a sustainable level?

In 2014 employers in and around Odessa were just trying to catch their breath. Traffic was a nightmare, and the influx of people was putting a strain on the infrastructure. When it came to welding, many told me that they would welcome a slowdown to some degree, simply because it would allow employers to be choosier.

During the boom, it seemed anyone who could wield a welding gun could land a job. Sure, many needed certain welding certifications—be it from the American Welding Society (AWS), the American Society of Mechanical Engineers (ASME), the American Petroleum Institute (API), or an employer-specific test. Insurers of oilfield operations often demanded it. And welders would pass the test, but that still didn’t mean they would stay drug-free or show up on time.

“Now it has turned back the other direction,” Mosman said. “Many people have left the area. You don’t see as many backyard RV parks,” where private residents would rent out their property to workers who came to town looking to capitalize on the boom. “And now [employers] can be a little choosier on whom they hire, rather than taking just any warm body.”

In many ways the bust reminds Mosman of his youth and the oil bust of the 1980s. “I moved here in 1981 [at the tail end of] the big oil boom that began in the late 1970s,” he said. “And it’s been up and down ever since. Each time more people come in and more people stay.”

Because more people have stayed over the years, Odessa has more economic diversity than it once did. And although work associated with new drilling sites has slowed to a trickle, the maintenance aspect is still there, as are jobs associated with downstream processing facilities. After all, despite low prices, oil and gas are still coming out of the ground.

Go east to Houston and you hear similar stories. Some fab shops tied to the energy sector are struggling mightily—no surprises there. And yet Texas isn’t all about oil. In Dallas you’ll see an entirely different economic picture.

Consider Nora Harding’s challenge. She’s director of leadership development at Special Products & Mfg. Inc. (SPM), a custom fabricator in Rockwall, Texas, northeast of Dallas. At the beginning of last year, SPM was indeed hurting from a slowdown in the energy sector. But today parts of the regional economy are booming. At SPM, work in the specialty automotive and construction markets is ramping up big-time.

“I wish it was just about money. That we can fix.” So said Harding in describing the company’s challenge with keeping good employees—something that’s certainly not indicative of a struggling economy. (Finding good employees has been a struggle for shops regardless of the economy, but that’s a different problem.)

In recent months Harding’s team has been working on what they call a “systemized talent development” approach. Essentially, every employee is interviewed to determine his or her individualized learning and training program. “We recently hired a mechanical engineer whose sole job is to coach people and offer training,” she said, adding that employees shouldn’t come to work for SPM just for the paycheck. It’s about establishing a career.

The oil and gas sector has high peaks, a blessing and a curse. For fab shops, the volume of work during boom times is just so immense that it becomes difficult to diversify, which in turn makes the busts even more painful.

As a CWI, Mosman still visits companies to certify welders, but he also has witnessed a changed landscape. A lot of small family businesses, even multigenerational ones, are no longer around. As just one example, one small derrick fabricator, which had been part of the Odessa community for decades (and which was covered in the February 2015 issue of this magazine), shut its doors last summer. “I had been doing business with them for 15 years,” Mosman said.

After decades of experiencing Odessa’s booms and busts, Mosman now gives students several pointers. First, talent wins. A good welder—one who’s drug-free, shows up on time, and lays a good bead—will find work no matter what happens to the price of oil. Second, never stop learning new processes, welding or otherwise.

Mosman’s third pointer is perhaps the most important. “I always tell them, when it’s booming, put money in the bank.” The same advice could apply to companies, he said. Save during the boom, spend during the bust.

Of course, that’s easier said than done, particularly when the boom is so high and the bust is so low.

Odessa College, 432-335-6400, www.odessa.edu

Special Products & Mfg. Inc., 972-771-8851, www.spmfg.com