Oil and Gas Companies Stiff 29,000 Workers Out of $40 Million

Rig workers drill a saltwater well to draw fluids for hydraulic fracturing, or fracking, in Anthony, Kan., in February 2012.

Rig workers drill a saltwater well to draw fluids for hydraulic fracturing, or fracking, in Anthony, Kan., in February 2012.

  Like beacons in the night, the flares burning over America’s oil and gas fields drew tens of thousands of workers over the past decade, promising big paydays and new pickup trucks, even for those who had just graduated high school.

But in an industry sector recently plagued by plunging oil prices that have forced thousands of rigs to go idle, many of those workers have been feeling even more financial pain, having been forced to wait for their full paychecks.

More than 29,000 oil and gas employees have been stiffed over $40 million in back wages, according to findings from more than 1,100 investigations launched since 2012 by the Labor Department.

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Despite booming industry profits and record oil and gas output – which together rejuvenated the country’s economy and transformed the U.S. into the world’s top oil and gas producer in 2014 and 2015 – companies misclassified their workers and failed to pay them required overtime, even as they put in long workdays in often dangerous conditions.

“We continue to find unacceptably high numbers of violations in the oil and gas industry,” Betty Campbell, regional administrator for the Labor Department’s Wage and Hour Division in the Southwest, said in a statement.

The most recent violations were announced last month, when more than 2,500 employees for four companies – Jet Specialties, Frank’s International, Viking Onshore Drilling and Stream-Flo USA – were found to be owed $1.6 million in back wages.

Violations ranged from failing to pay production bonuses to wrongly considering employees as “exempt” from overtime requirements, paying them flat salaries regardless of how many hours they worked. The specific investigations of Frank’s International and Stream-Flo USA began in the Northeast, and ultimately encompassed employees from Colorado, Louisiana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas, Utah and Wyoming, the Labor Department said.

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“Employers who violate the law in their pay practices harm workers, their families and law-abiding industry employers,” Campbell said.

The Wage and Hour Division’s inquiries into the energy industry began in the agency’s Northeast regional offices in Pennsylvania. The state, sitting atop the Marcellus Shale formation, was one of the country’s biggest fracking hubs, and jobs nationwide eventually surged past 191,000 on the extraction side alone by the end of 2012, not including service companies and other related sectors. By comparison, there were around 179,000 such employees last month.

Investigators soon discovered the sector was rife with wage problems.

“Investigations in the [Northeast] region in 2012 revealed that the violations were widespread,” says Robin Mallett, a Wage and Hour Division district director in Houston, whose office led two of the most recent investigations in March. The initiative rapidly spread west, involving offices in Chicago and Texas.

Mallett stopped short of saying whether the violations were systemic. But jobs were often not nearly as lucratively as they seemed, she says.

“Even though they have a reputation, the industry, for paying high wages,” Mallett says, “sometimes the economic reality of it is the workers are receiving these hefty paychecks simply because of the sheer number of hours that they’re working – really it was not that high a rate of pay.”

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Don Briggs: The pile grows taller on the backs of oil and gas

As if the oil and gas industry was not buried under a pile of allegations, lawsuits, protests and low prices, another group has come forward to further stifle industry growth. A coalition of Democratic attorneys general from 16 states has announced a campaign to investigate the scientific research of energy companies regarding climate change. In a nutshell, this investigation will challenge the issue of free speech and scientific disagreement.

This group of attorneys general, along with former Vice President Al Gore, is challenging the scientific research of energy companies, specifically Exxon. According to the allegations, Exxon allegedly reached “definitive conclusions” about climate change. Simply put, if you disagree with Al Gore and the climate change coalition, they will launch an investigation. The bigger picture means more and more dollars spent by the oil and gas industry defending itself against yet another attack rather than investing those dollars into the operations that fuel the country.

In addition to this announcement regarding climate change, just last week a protest was held at the Gulf Lease Sale. The Louisiana Bucket Brigade, a group of environmentalists, gathered at the sale to protest further leasing in the Gulf of Mexico. Their call was to leave the resources in the ground and move toward renewables. Interesting enough, the group of protestors came in buses and other motor vehicles that each requires oil and gas.

To add to the protest, General Honoré and the Green Army appeared before the Natural Resources Committee recently to protest oil and gas operations and make alleged complaints from an environmental standpoint. He has made a point to travel the entire state, bringing along a group of environmentalists with him, to protest the very existence of the industry. His group has led the charge against the new well that will be drilled in St. Tammany Parish. Unsuccessful in their protests, yet the Green Army still attempts to delay further job-creating operations in Louisiana.

As if all of the protests and campaigns against the industry are not enough, the State of Louisiana is requiring new financial securities on the small independent stripper producers in North Louisiana. These financial securities, along with new taxes regarding electricity use, are literally crippling the producers. These small independents are spending $10 to make $1. These producers in areas like Jena, Louisiana and Oil City, Louisiana have been producing oil for several decades. New rules and laws are making their operations too expensive to continue. Yet, shutting in the wells is not an option due to the costs mandated by the state for this process.

Let us not forget the recent filing of the Cameron Parish coastal lawsuits against around 200 Louisiana oil and gas defendants for alleged coastal damage. Millions of dollars will have to be spent defending these suits rather than investing in operations that provide jobs and millions of dollars for our state economy. Cameron Parish is the latest to file suit against the industry behind Plaquemines, Jefferson and potentially St. Bernard Parishes.

To wrap all of this chaos up into a terrible but realistic package, oil prices are $39 dollars and natural gas prices are $1.90. So at a time when the industry is fighting the worse down turn in state history, more lawsuits, more campaigns and more protests against oil and gas are popping up daily. When is enough enough?

Mysterious Death Uncovers Risk In Federal Oil Field Rules

An oil field truck is used to make a transfer at oil-storage tanks in Williston, N.D., in 2014. It was atop tanks like these that oil worker Dustin Bergsing, 21, was found dead.

An oil field truck is used to make a transfer at oil-storage tanks in Williston, N.D., in 2014. It was atop tanks like these that oil worker Dustin Bergsing, 21, was found dead.

Eric Gay/AP

On a cold night in January 2012, Dustin Bergsing climbed on top of a crude oil storage tank in North Dakota’s Bakken oil field. His job was to open the hatch on top and drop a rope inside to measure the level of oil. But just after midnight, a co-worker found him dead, slumped next to the open hatch.

Even though an autopsy showed Bergsing had hydrocarbons in his blood — things like benzene and butane — the Occupational Safety and Health Administration’s investigation found no safety violations. And it didn’t fine the oil company.

Reporter Mike Soraghan came across Bergsing’s case while researching oil field fatalities for EnergyWire, an online business publication.

“A 21-year-old kid just sort of dies out in the middle of nowhere and nothing happens?” Soraghan says. “I just remember reading through it and thinking, ‘That’s it?’ ”

With the help of Dr. Bob Harrison, who specializes in occupational and environmental medicine, and the National Institute for Occupational Safety and Health, a pattern was uncovered: nine oil workers found dead on oil pads in the past six years, many of them young and otherwise healthy.

Based on Bergsing’s autopsy, Harrison believes they passed out after they opened oil-tank hatches and were engulfed in large amounts of petroleum gases.

“It was one of those aha moments that I have every so often in my career as a doctor treating patients with toxic-chemical exposures,” he says.

Families of at least six of the deceased are suing their employers. Since last year, NIOSH has warned the industry about the hazard, but exposure continues — in part because another federal agency’s rules make it difficult to use safer measurement methods.

National Institute for Occupational Safety and Health via YouTube YouTube

The Bureau of Land Management is in charge of oil development on federal land, and critics say the agency is wary of technology that might not be as accurate as putting guys on top of tanks to measure oil by hand. There’s public money at stake — royalties that are paid by the oil companies on the exact amount of oil coming out of the ground.

“If it’s a public asset, then the taxpayer deserves to have their money, their assets protected,” says Steve Wells, who oversees oil production for the agency.

And since 1989 — the last time the rules were updated — the industry practice for protecting those assets is to measure them manually by dropping a rope into the tank, as Dustin Bergsing did when he died.

The agency is updating those rules this year, but Wells won’t say whether the new rules will allow automated oil measurement. One thing the rules definitely won’t do is ban measuring oil levels by hand.

“You have some very old facilities, very simple tanks, so the idea is that we’re trying to accommodate all the different operations,” Wells said. And with 83,000 oil wells on federal land and a $2,000-per-tank cost for automatic measurement equipment, Wells said requiring such an upgrade would cause some companies to shut down.

Truck driver Ryan Ehlis makes his living hauling crude oil in North Dakota, and has some firsthand experience with the dangerous fumes. Like Dustin Bergsing, he spends a lot of time climbing atop large oil-storage tanks and opening their hatches to measure the oil.

He says he tries to avoid the gases, but just the day before, he’d had a dizzy spell after climbing back down from one of the tanks.

“If there’s gas in your face, kind of hold your breath and then get your gauge and then step away and get into the fresh air and [take a deep breath] — and then go do something again,” he says. “But you can’t avoid it entirely.”

That’s needless, nonsensical exposure, says Dennis Schmitz, an oil and gas safety trainer. Automatic measurement is common in Canada and in the offshore oil and gas industry, which isn’t regulated by the Bureau of Land Management. In fact, Schmitz used such equipment on tanker ships.

“And I never really questioned, ‘Why is it in the offshore environment that I don’t breathe the vapors there, and I do breathe them here?’ ” he says.

Ehlis says he has thought about getting a safer job — particularly after seeing a truck on an oil-well pad explode into “nothing but a huge orange fireball probably 50 feet in the air” — but that nothing in the area pays as well.

So Ehlis keeps driving, keeps climbing oil tanks and opening their hatches, keeps lowering a rope into the tank to measure the level.

This story was produced by Inside Energy, a public media collaboration focused on America’s energy issues. Contact reporter Emily Guerin ateguerin@insideenergy.org.

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