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Work plentiful in Utah gas, oil fields

However, experienced hands scarce for the boom-and-bust jobs

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VERNAL — With oil prices nearly three times what they were one year ago and the strong demand for natural gas pushing its price up by 200 percent to 300 percent from where it stood a few years back, work in the oil and gas fields is plentiful — but experienced hands are becoming scarce.

The problem is attributed to two factors: the boom and bust nature of the industry that has finally convinced many oil field hands to work in other professions, and the nation's low unemployment rate.

There are 15 working rigs in Utah right now. The majority are gas wells and are located in the Uinta Basin, said Lee Peacock director of the Utah Petroleum Association. Both gas wells and oil wells essentially require the same process to bring them online.

Unlike a year ago, when oil and gas companies were laying off workers, the same companies are finding former employees aren't willing or eager to return.

And although many local oil and gas companies are enjoying the price surge and keeping employees "very busy," they are still moving ahead with caution waiting to see what happens on a global scale, as well as with the planned Coastal-El Paso merger.

"A lot of people have left the industry. It's hard to get experienced hands. You can always find hands, but finding hands that have any experience in the oil field is difficult because of the boom and bust cycle," said Mike Guinn, district manager for Inland Production.

The problem has hit the oil field service industry the hardest. Not only did many experienced hands leave the trade during the last downturn, but in today's work force, oil field service companies are finding there just aren't as many men looking for work that requires a lot of physical labor.

One local oil field service company reported that it is now finding itself "doing a bit of recruiting."

Newly implemented employment regulations could be another factor that keeps some potential employees away. More companies are insisting prospective employees pass drug tests and have clean driving records.

Halliburton Energy Services, based in Houston, Texas, which employs 180 people in its Vernal office, reports it has some openings and is recruiting throughout the Rocky Mountain region. The company offers excellent medical insurance and benefit packages to employees, said Halliburton office supervisor Becky Ellifritz. She said applications are "trickling in."

Like other companies, Halliburton has found the market looking pretty promising once again, particularly in the natural gas arena.

The posted price of West Texas Intermediate crude has been hovering around the $29- to $30-a-barrel range. About a year ago, crude oil was drawing about $10 per barrel. At the same time, natural gas prices are skyrocketing, making it more lucrative to drill for the resource. Last week, Henry-Hub (the benchmark price for natural gas) was running at $4.36 per thousand cubic feet. Quite an increase, considering that for the past several years the going pace was $1 to $2 per thousand cubic feet.

"It's a pretty good profit (on natural gas wells) and it's projected it will stay strong. It seems to be the fuel of the future," said Peacock. Natural gas is also predicted to play prominently in supplying energy for power producing facilities

The demand for natural gas is attributed to a robust economy where new homes and new businesses are responsible for increased consumption of the clean-burning fuel.

The Uinta Basin enjoys deep and plentiful pockets of natural gas. Peacock predicts new oil drilling will not be as strong in Utah as it is in other oil producing states, even with the huge leap in crude prices. He said that's because many industry experts believe the largest reserves in known fields have already been tapped.

Utah's vast amount of public lands require companies to comply with numerous federal regulations and endure a slow permit process. The proposed Forest Service road closure plan is also expected to make it difficult for companies to drill for new oil reserves on forest lands. While the pace of oil drilling in states such as Texas and Oklahoma continues at a furious pace since the high crude prices took effect, industry analysts say not to expect that kind of activity in Utah.

E-MAIL: state@desnews.com