Labor Demand in the Offshore Oil and Gas Industry in the 1990’s:
The Louisiana Case

OCS Study MMS 2003-022 

The Minerals Management Service (MMS), Gulf of Mexico OCS Region, announces the availability of a new study report, Labor Demand in the Offshore Oil and Gas Industry in the 1990’s:  The Louisiana Case.

 The purpose of this study was to examine the demand side of labor in the oil and gas industry in the Gulf of Mexico during a period of economic expansion.  The surge in oil and gas activity during the mid-1990’s was a result of technological and corporate changes, coupled with a steady increase in the global demand for oil.  When this study began, the oil and gas industry was experiencing an 11-year high point in activity, yet growth in oil- and gas-related employment levels continued to be low.  The supposition was that slow growth in employment was attributable to a shortage of qualified workers, although there was little evidence to support this supposition.  The intention of this study was to shed light on this slow employment growth.

However, the high level of production the oil industry enjoyed up through 1997 took a rapid downturn that year.  The American Petroleum Institute reported that by 1999 oil production had its largest decline in a decade and the number of those employed in the upstream sector dropped by 60,000 between 1997 and late 1999.  This decline resulted in mid-stream modification of the questions related to the current labor situation and led the MMS to address a more general set of questions dealing with changes experienced by firms in the oil and gas industry.  The three issues related to labor demand addressed

            1.  organizational and technological changes in supporting the GOM oil/gas industry;

            2.  changes in interrelationships among firms; and

            3.  perceptions of the capacity of local communities to supply needed labor to firms.

A sample of firms was drawn from two multi-parish labor market areas in Louisiana—Lafayette and Houma.  The companies were placed into four different categories:  air and water transportation, metal fabrication, ship and boat building, and oil and gas services.  Research revealed there was no clear pattern to define the industry changes, although one-third of the companies reported they were less specialized in comparison with the 1980’s, a situation that could be attributed to “being bought out” by another company.  Despite the organizational changes, most companies maintained their core interests and activities.  With regard to the interrelationships among firms, respondents mentioned very little change in the extent to which they contracted out for services.  The sample included 36 firms and, when it came to the labor supply, 14 firms indicated they had no problems securing adequate labor, while 20 told of problems maintaining an adequate workforce.  The respondents’ reasons for the labor problem fell into three categories:  Human capital deficiencies (lack of job-related skills), attitudinal/motivational deficiencies (positive to negative work ethic), and industry-related conditions (erratic behavior of the oil and gas industry).

This report is available only in compact disc format.  The discs are available from the Minerals Management Service, Gulf of Mexico OCS Region, at a charge of $15.00 by referencing OCS Study MMS 2003-022.  You will be able to obtain this report also from the National Technical Information Service in the near future.  Here are the addresses.  You may also inspect copies at selected Federal Depository Libraries.

Minerals Management Service Gulf of Mexico OCS Region Public Information Office (MS 5034) 1201 Elmwood Park Boulevard New Orleans, Louisiana 70123-2394 Telephone requests may be placed at (504) 736-2519 or 1-800-200-GULF or FAX: (504) 736-2620

U.S. Department of Commerce National Technical Information Service 5285 Port Royal Road Springfield, Virginia 22161 (703) 487-4650 or FAX: (703) 321-8547 Rush Orders: 1-800-336-4700

MMS is the Federal agency in the U.S. Department of the Interior that manages the nation's oil, natural gas, and other mineral resources on the outer continental shelf in Federal offshore waters. The agency also collects, accounts for, and disburses mineral revenues from Federal and American Indian leases. These revenues totaled over $6 billion in 2002 and nearly $127 billion since the agency was created in 1982. Annually, nearly $1 billion from those revenues go into the Land and Water Conservation Fund for the acquisition and development of state and Federal park and recreation lands.

 -MMS-GOM-
MMS's Website Address: http://www.mms.gov

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