Could driver shortage spill into the oil markets and slow the boom?


Of all possible factors that could help derail the booming U.S. oil economy, a driver shortage most likely would not be at the top of most lists. However, that is exactly what is happening in Texas’s Permian Basin.

The Permian is leading the revival of the American oil industry. In fact, information services provider IHS Markit reports that the Basin broke its all-time annual production record last year, pumping out 815 million barrels of oil and beating its previous high mark in 1973 by over 25 million barrels

This is great news for the U.S. economy. But if the industry doesn’t quickly find more drivers to transport the increasing amounts of oil and other oilfield necessities, the growth could hit a speed bump soon.

According to Willie Taylor, CEO for Permian Basin Workforce Board in Midland, Texas, the industry needs to double its current workforce of 3,000 drivers to around 6,000 in short order to ensure that the pace of growth in the Permian does not experience headwinds.

Due to new drilling technologies, demand for trucks to haul the crude from the wells to the pipelines and oil hubs has decreased some. However, drivers for frac sand trucks, equipment, and for crew transport are still desperately needed.

“Rehiring will be a slow process. It won’t happen as fast as you need it,” said Joey Lee, general manager with Premium Truck of Odessa, to Bloomberg. He says that companies need to pay more competitive salaries to hire more drivers.

Just a few years ago thousands of drivers were laid off from the oil fields when the bottom dropped out of the oil markets. However, companies are having a hard time hiring them back. Many of them don’t want to return to the unreliable and unpredictable boom and bust cycles of the oil patch. This is especially true since oil companies are not paying as much as they were in the previous oil booms due to changes in overall market dynamics.

Furthermore, though the Permian is close to the medium-sized cities of Midland and Odessa, and drivers could easily come back to relatively high paying jobs that do not require driving long distances, some drivers are not willing to risk being financially injured again.

“Some of those people didn’t come back to the industry. They were burned and hurt. It takes a while to build that back up,” Chris Gatjanis, Halliburton’s operations chief in the Permian told the Houston Chronicle in October.

According to industry reports, month-over-month oil production in the Permian Basin is currently increasing by 68 thousand barrels per day and the growth is expected to continue. This represents over half of U.S. oil production increases.

Few industries have as much impact on policy as energy. If driver shortages in the oil sector cause issues in the oil sector, you can expect significant political pressure to address them. Whether HOS regulations, driver age, or immigration reform become opportunities remain to be seen- but you can bet that big money speaks and no group has more than Big Oil. 

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One Comment

  1. These big oil companies need to maintain there Damn lease roads. These roads are built once and never maintained agian . Makes a drivers job unbearable and just simply beats the driver and the trucks to death ….spend some Damn money on the lease roads and you will get some drivers back.

  2. Their not going to spend any money to address driver needs, their way to greedy for that. I say let them drive their own trucks and the heck with them all.

  3. Between low rates and now maditory ELD’s there is no benefit to driving. I have held on as long as I can and I’m about 30 mins away from my yard headed in to drop off my truck. I refused to do the same work for half the pay.