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April 17, 2014

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Skipping college for the Wyoming oil fields can be boom-bust trap

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John Glionna, Los Angeles Times

Tyrel Wellmaker skipped college to work in the oil fields of the midwest, but when he grew tired of the danger and hours, he los this house and truck moving back in with his father and going to school.

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Jonathan Odlin once had it made, or so he thought. With only a high school degree, he earned big bucks in the Wyoming oil fields. But the money and the job didn't last. Now he's back in community college at age 30, trying to retrain himself for another career.

CASPER, Wyo. — These are boom times in the resource-rich Cowboy State, courtesy of an oil explosion whose ripples can be felt across the land.

Good-paying blue-collar jobs in the petroleum and natural gas fields are as plentiful as pickups here, and the unemployment rate — 4.6 percent in July — remains far below the 7.4 percent national average.

But critics worry that the prodigious oil output includes a potential byproduct. Despite such fast-dollar success, heavy reliance on a single industry known for its dramatic downturns could one day help paint the state into a precarious financial corner, they say.

Many fear the day when Wyoming’s oil market fails, as it last did in the mid-1980s, exposing a fundamental flaw in the state’s job picture: The lure of the oil dollar has prompted teenagers to skip college, or abandon high school, for the petroleum fields — many without a Plan B if things go bust.

They’re young workers like Tyrel Wellmaker, a high school graduate who left the Army for a low-skill petroleum job, albeit one with a salary that outstripped even those of positions that require college educations.

In his early 20s, wiry and strong, he labored as an oil field roughneck, manning the rigs that dot the region’s rolling western landscape. He came home each night dirty and dead tired, but the money more than made up for it: With a six-figure salary, he purchased his own house and drove a snazzy $50,000 pickup.

But with the boom came Wellmaker’s personal bust. He soon grew tired of the dangerous conditions after witnessing fellow workers die on the job. One winter day in 2008, when the toilet in his communal trailer froze solid on a job in North Dakota, he just walked away.

Without savings, he soon filed for bankruptcy. The house went into foreclosure. Two scowling repo men claimed his prized pickup. At 26, he sheepishly moved back in with his father and regretted his decision to forsake college.

“I felt I had made the biggest mistake of my life,” said Wellmaker, now 31.

But who could blame him? For most U.S. high school graduates, the quickest way to achieve the American dream is to attend college. Not so in Wyoming, where the oil boom has turned the education-to-earning-power paradigm on its head.

Between 2009 and 2011, the average salary nationwide for a bachelor-degree holder was $48,997 — nearly twice what a high school graduate made ($26,957) and more than double that of a high school dropout ($19,013), according to Census Bureau figures.

Compare that with Wyoming: In 2011, in the $60,000-$75,000 pay bracket, the number of bachelor-degree holders was outpaced by those with only high school educations.

In the $38,000-$47,000 bracket, even workers without high school diplomas outnumbered those with college degrees, state economists say.

Wyoming’s ties to fossil fuels run deep: 70 percent of the state’s annual revenue comes from coal, gas and uranium extraction. Some experts say the state must play the hand it was dealt.

“You have to pursue the opportunity while all those good-paying jobs are there,” said Mark Perry, an economist at the University of Michigan-Flint, who specializes in the energy industry.

He predicts the oil boom will be long-lived. “Let’s be practical: A college degree is no guarantee to success anymore. Young people should grab some of this oil money. They can always go back to school,” he said.

Critics say the oil flow has reduced the urgency in Wyoming to diversify its economy and attract white-collar jobs.

“Wyoming is an energy state; we live off the energy dollar, and people are used to the resulting low taxes,” said Sissy Goodwin, a power technology instructor at Casper College. “We’re in a boom cycle now, but the bust will come. We need our politicians to look for the non-energy jobs of the future. But they’re not doing that.”

Goodwin knows many young men who returned to school after being injured in the oil fields. “I’ve seen a lot of pricey pickups in the parking lot,” he said. “They don’t last. The owners can’t afford them anymore.”

Although jobs for unskilled workers are plentiful, those for college graduates are not.

Last year, 16.5 percent of Wyoming’s 288,000 jobs required a bachelor’s degree, according to the Wyoming Department of Workforce Services. By comparison, 67.2 percent — more than two-thirds — required only a high school diploma.

Jim Rose, director of the Wyoming Community College Commission, said state residents were almost afraid to consider a future without oil. “The newest boom has meant extraordinary revenue, and it’s been difficult for many, legislators included, to be weaned from that, to say, ‘Let’s talk about economic diversity,’” he said.

Wyoming has tried to attract new businesses, such as a fledgling high-tech industry, but Rose called the lack of jobs statewide for college graduates “sobering.”

“There’s a lot of blame to go around,” he said. “Colleges can’t train students for a workforce that doesn’t exist. If Wyoming started training people to work in the automobile or aircraft industry, we’d just be buying them a ticket to leave the state because there are no jobs here.”

State Sen. Jim Anderson says officials are encouraging young workers to better manage those oil field salaries. That means fewer luxury homes and toys and larger savings.

“It’s all about financial literacy,” Anderson said. “These kids should value money so they can save for the education they might need later.”

Oil industry executives don’t understand all the hand-wringing. They point to the sprawling Jonah oil and gas field in western Wyoming and the coal and uranium found in the state’s Powder River Basin.

“We’ve been blessed with mineral resources, and I choose to view that as a positive thing,” said Cary Brus, a senior vice president at Nerd Gas, a gas and oil exploration company.

He said industries tied to commodity prices expected fluctuations. “If there’s a downturn, and in this business there always is, workers will be left to figure out where the next paycheck is coming from,” he said.

Brus has been there. He graduated from college in 1981 and went into oil work. Then came the bust of 1984. “My job went away,” he recalled. “So I went back to graduate school. You just deal with it.”

Jonathan Odlin has been trying to deal with it too. A former Marine who did three tours in Iraq, he took a job in the Wyoming oil fields with a cement company in 2006.

He had a high school diploma, and the pay was good. But he soon loathed chasing the oil.

Then, in 2008, a good friend was cut in half in an industrial accident — after taking Odlin’s shift. That’s when he called it quits.

Odlin, 30, will soon earn a degree in power plant technology at Casper College, as he struggles to support five children. “The oil fields may mean quick bucks, but for low-level workers like me, they’re not the place to be. I need a real career,” he said.

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