Oil and gas workers are tough. They know that bust cycles are just part of the deal.
That’s true of petroleum engineer Sid Banerjee. Originally from Alaska, Banerjee, 38, started working in the industry in 2005, and moved to Houston a few years after that. Now Banerjee said that toughness is coming into play for workers across the industry.
"There’s a bit of a stiff upper lip right now in the industry," Banerjee said. "Everyone recognizes that things aren’t good."
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"Even if there wasn't our jobs, or industries, or companies to worry about," he said, "there is all this other stuff going on in the world. I mean, 2020 has been a freaking crazy year."
Crazy indeed. A price war between Saudi Arabia and Russia was already threatening the price of oil. Then the spread of the coronavirus led to a steep drop in demand. Most companies have cut spending, some have announced layoffs, and experts say bankruptcies are likely.
Banerjee and his wife started the year with their own new adventure: twins. The baby boys were born in December.
"It’s hard not to think about the cost of babies and health insurance and things like that," Banerjee said. "And not to worry, at least a little bit — not just about whether or not I can keep them safe from pandemics and the world around them, but whether or not I can stay employed."
He's seen a couple of downturns before, but Banerjee said this one could be especially bad, as the industry is still recovering from a price crash just a handful of years ago — one that already forced companies to make cuts.
There's been no official talk of layoffs at his job. But even so, and even with his advanced degrees and qualifications, Banerjee said he is still worried he may not be employed at the end of this year.
And he's not alone. Industry groups and the University of Houston recently surveyed about 400 energy workers. More than half said they're worried about job security because of the pandemic.
"If you are brand new to the industry," Banerjee said, "I would probably suggest you do something else or at the very least, hedge your bets."
Jeff Lattea — who has worked in oil and gas since 2012, and has followed the industry for more than two decades — would give new workers the same advice.
"They aren't going to have a choice but to leave the industry and find something else," he said.
Lattea, 34, is a Level 3 nondestructive testing welding inspector. He makes sure equipment is safe to use. But just over a week ago, he was let go from his Houston job.
His experience could be a sign of things to come, as companies spread work out among fewer people, leading to permanent job cuts, he said.
That could be exacerbated due to less access to investment money, a phenomenon that’s hurting companies more now than in previous downturns.
"You’re in an environment now where the credit is just completely unavailable," said Deborah Byers with research and consulting firm Ernst & Young.
Companies were still recovering from the last downward cycle, and taking a critical look at capital programs because of the supply dispute between Russia and Saudi Arabia, Byers said. She added that the end of this financial crisis is inextricably linked to slowing the spread of COVID-19 — and some say it will take oil and gas a bit longer than the rest of the economy to bounce back.
Lattea himself beat the odds after his job was cut.
"I don’t take things lying down easily," he said.
Within a day he had a new job — but it could only last a few months. After that, because of his expertise and certifications, Lattea said he is confident he'll find something.
He just hopes it's in oil and gas.