OCS Study 

MMS 2003-022 

 

Coastal Marine Institute 

Labor Demand in the Offshore 

Oil and Gas Industry in the 1990’s: 

The Louisiana Case 

Cooperative Agreement 

Coastal Marine Institute 

Louisiana State University 

U.S. Department of the Interior 

Minerals Management Service 

Gulf of Mexico OCS Region 
U.S. Department of the Interior Cooperative Agreement 

Minerals Management Service Coastal Marine Institute 

Gulf of Mexico OCS Region Louisiana State University 

OCS Study 

 MMS 2003-022 

 

Coastal Marine Institute 

Labor Demand in the Offshore 

Oil and Gas Industry in the 1990’s: 

The Louisiana Case 

Authors 

Forrest A. Deseran 

Louisiana Population Data Center 

Louisiana State University 

and 

Linda Tobin 

Department of Sociology 

University of Louisiana, Lafayette 

April 2003 

Prepared under MMS Contract 

14-35-0001-30660-19951 

by 

Louisiana State University 

Baton Rouge, Louisiana 70803 

Published by 
ii 

DISCLAIMER 

This research was supported by the Minerals Management Service (MMS) under MMS Cooperative 

Agreement No. 14-35-0001-30660. This report has been technically reviewed by MMS and approved 

for publication. Approval does not signify that the contents necessarily reflect the views and policies of 

the Service, nor does mention of trade names or commercial products constitute endorsement or 

recommendation for use. It is, however, exempt from review and compliance with MMS editorial 

standards. 

REPORT AVAILABILITY 

Extra copies of the report may be obtained from the Public Information Office (Mail Stop 5034) at the 

following address: 

 U.S. Department of the Interior 

 Minerals Management Service 

 Gulf of Mexico OCS Region 

 Attention: Public Information Office (MS 5034) 

 1201 Elmwood Park Boulevard 

 New Orleans, Louisiana 70123-2394 

 Telephone Number: 1-504-736-2519 

 1-800-200-GULF 

CITATION 

Suggested citation: 

Deseran, F.A. and L. Tobin. 2003. Labor demand in the offshore oil and gas industry in the 1990’s: 

The Louisiana case. U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico 

OCS Region, New Orleans, LA. OCS Study MMS 2003-022. 20pp. 
iii 

TABLE OF CONTENTS

LIST OF TABLES .........................................................................................................................iv 

INTRODUCTION........................................................................................................................... 1 

METHODOLOGY.......................................................................................................................... 2 

FINDINGS ...................................................................................................................................... 3 

General Characteristics of Firms.........................................................................................3 

Firm Services and Products.....................................................................................3 

Air/Water Transportation Services .........................................................................3 

Ship/Boat Building..................................................................................................3 

Metal Fabrication ....................................................................................................4 

Oil/Gas Services......................................................................................................4 

Year Established and Number of Employees......................................................................5 

Changes in Number of Workers..........................................................................................6 

Organizational and Technological Changes........................................................................7 

Changes in Interrelationships Among Firms.......................................................................9 

Perceptions of the Capacity of Local Communities of Supply Labor...............................10 

Firms with Positive Impressions of the Labor Force ........................................................11 

Negative Labor Impressions .............................................................................................12 

Human Capital Deficiencies..............................................................................................12 

Attitudinal/Motivational Deficiencies...............................................................................14 

Industry-Related Circumstances .......................................................................................16 

SUMMARY AND CONCLUSIONS............................................................................................ 17 

REFERENCES.............................................................................................................................. 20 
iv 

LIST OF TABLES

Table 1. Year established and number of employees by type of firm. ......................................... 5 

Table 2. Changes in total number of all workers and part-time workers in last 10 years by 

firm type.......................................................................................................................... 6 

Table 3. Changes in skill level of workers and problems finding qualified workers by firm 

type. .............................................................................................................................. 10
LABOR DEMAND IN THE OFFSHORE OIL AND GAS INDUSTRY IN THE 1990’S: 

THE LOUISIANA CASE 

INTRODUCTION 

A surge in activity in the mid-1990s resulted in the Gulf of Mexico (GOM) being described as 

the “Silicon Valley” of the oil and gas industry (Simmons, 1996). Technological and corporate 

organizational changes, coupled with a steady increase in the global demand for oil, were driving 

a resurgence of oil and gas exploration in the GOM. According to industry reports at this time, 

both major and independent operators were making significant and long-term investments in the 

Gulf of Mexico. Communities along the Louisiana Gulf Coast were optimistic about another era 

of oil-related economic growth. However, despite the marked increase in oil and gas activity in 

the GOM during this period, there was no concomitant increase in local employment in the oil 

and gas industry. 

The mid-1990s resurgence of oil exploration in the Gulf can be attributed in part to technological 

advances such as those that enable the offshore petroleum industry to extract oil from beneath 

salt in the previously mined shallow Gulf waters (Abernathy, 1996) and those that make 

deepwater development possible. Increased oil and gas exploration in the GOM can also be 

attributed to corporate organizational changes, which reduce the economic risks associated with 

offshore petroleum oil and gas exploration. These changes include the Deepwater Royalty 

Relief Act which provides tax breaks and other financial incentives for oil and gas exploration in 

deep water (over 200 meters), and cost-cutting strategies within the industry itself. Coupled with 

a steady increase in demand for oil, these changes were driving an increase in oil and gas activity 

in the GOM (Flatern, 1997). 

Reports of oil and gas exploration activity in 1996 indicated that GOM federal offshore oil leases 

were at an 11-year high and that the oil output for 1996 would exceed 1986 levels (Oil and Gas 

Journal, 1996; The Daily Advertiser, 1997; Dodson and LeBlanc, 1997). However, data from 

the Louisiana Department of Labor for this period showed relatively little growth in oil and gas 

related employment. Although this slow growth in employment was attributed to a shortage of 

qualified workers (Darbonne, 1997), the reasons for the sluggish growth are unclear and were 

due to other factors as well, such as industry reorganization. The impetus of this study was to 

examine factors contributing to the slow employment growth during this period with increasing 

activity in the GOM. Because employment is initially a function of labor demand, and labor 

demand is a function of industrial structure, our focus was on the industrial determinants of 

employment opportunities. 

Our plans were confounded when the high level of activity that the oil industry enjoyed up 

through 1997 took a rapid downturn in late 1997. The American Petroleum Institute reported that 

by 1999 oil production had its largest annual decline in a decade and the number of those 
2 

employed in the upstream sector dropped by 60,000 between 1997 to late 1999 (International 

Petroleum Encyclopedia, 2000). 

This industrial slowdown became evident only after the fieldwork for the current project was 

well under way. The result of this downswing was that the core question driving the project 

became less relevant to the informants involved in the study. That is, for those from whom we 

obtained our data the availability of workers had become less pressing than the prospects of 

declining revenues and reducing the number of employees. Thus, what had started as an 

examination of the industry’s response to a high need for labor, had to be modified in mid-stream 

to more general questions dealing with changes experienced by firms in the oil and gas industry 

in the GOM and how these changes affect the demand for labor. More specifically, we address 

three central issues that may affect labor demand: 

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

2. Changes in interrelationships among firms. 

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

METHODOLOGY 

Because there were no available secondary data sources to address the research questions listed 

above, we relied on qualitative field research methods to gain the information we needed. We 

used a non-interview technique referred to as “guided conversations” (Lofland and Lofland, 

1995) conducted with representatives of firms in the oil and gas industry located in what Tolbert 

and Sizer have identified as the Lafayette and Houma Labor Market Areas (LMAs). Together, 

these LMAs include the following parishes: Acadia, Assumption, Evangeline, Iberia, Lafayette, 

Lafourche, St. Landry, St. Martin, St. Mary, Terrebonne, and Vermilion (Tolbert and Sizer, 

1996). We concentrated our efforts in these LMAs because these areas were most directly 

affected by the previous cycle of offshore development and decline. 

We developed a pool of prospective informants using a purposive sampling strategy (Fitchen, 

1991). We began by developing an initial list of firms in the Lafayette and Houma LMAs based 

on business listings in local phone books and from such sources as the Petroleum Equipment 

Suppliers Association’s 1997/1998 Human Resource Contact Directory. Eligible firms included 

those directly involved in oil and gas exploration and extraction (i.e., production and drilling 

firms) and linked sectors. Initially, we used the categories that Gramling (1996) indicated are 

sectors most directly linked to offshore oil and gas extraction: metal fabrication, ship and boat 

building and repair, and water transportation. As part of our guided conversations, we solicited 

information about other firms linked to the industry and added those firms to our sample. As we 

will discuss in more detail in our findings, we expanded this categorical scheme to four 

categories. Overall, we felt that these methods yielded a sample that was representative of the 

population of firms servicing the oil industry in the Gulf of Mexico. Our confidence in the 

sample grew throughout the project as informants repeatedly confirmed the appropriateness of 

the list. 
3 

Although we had planned to conduct our guided conversations with CEOs of the selected firms, 

it soon became evident that personnel officers were often more accessible and typically were 

more knowledgeable about issues dealing with labor supply and demand. Hence, when 

appropriate, we spoke with personnel directors of the firms in our sample. In conducting the 

guided conversations, we used topical guidelines of the issues pertinent to labor demand in the 

oil and gas industry. Among the issues were (1) the nature of the organizational and 

technological responses to changes in the oil and gas industry and the global economy, (2) their 

relationships to other firms, and (3) perceptions of the capacity of local communities to supply 

needed labor. 

Of 36 representatives of the firms identified using the sampling strategy described above, 34 

resulted in completed directed conversations. Two representatives refused to participate. Of 

those that did participate, 27 allowed their conversations to be tape-recorded, which were then 

transcribed. The conversations of the remaining 7 respondents were recorded as notes taken by 

the field researchers. 

FINDINGS 

General Characteristics of Firms 

Firm Services and Products 

As mentioned above, we first identified firms as they conformed to the type of service or product 

they provide for the oil and gas industry as described by Gramling (1996): ship and boat 

building, metal fabrication, and water transportation. However, these categories were 

insufficient to capture the array of services and functions of the firms we found linked to the oil 

industry. In this regard, because of their similar functions, we included air transportation 

services with water transportation services. In addition, we created a new category, Oil/Gas 

Services, which includes a rather broad array of activities that we will describe below. A 

summary of the kinds of services provided in each category follows. 

Air/Water Transportation Services 

Perhaps the most easily categorized firms in our sample are those that provide water or air 

transportation for the industry. Our sample included five companies in this category. These 

firms provide support in the form of either helicopter transportation or water vessel 

transportation of equipment, supplies, and employees for offshore oil/gas production operations. 

Ship/Boat Building 

Eight of the firms we contacted were involved in ship and/or boat building. This category 

includes companies that construct vessels as well as repair them. Some of the firm 

representatives made the distinction between boat and ship building, which depends on the size 

of the vessel. For example, the representative of Firm #4 stated, “we don’t have any vessels 

under construction large enough right now to be considered a ship. So they are boats.” 

Although the oil industry was the major customer for these companies, a number of these firms 

have begun targeting a broader market. So, in addition to the construction of barges, lift boats, 
4 

and supply boats, some firms mentioned that they are building luxury boats, small recreational 

boats, and even contracting with the government (e.g, for Coast Guard vessels). In addition to 

construction, most of these operations also offer maintenance and repair services. 

Metal Fabrication 

The major activity of the firms in this category is oil-field iron and steel fabrication. These 

companies produce offshore oil platforms and related materials such as pipe lines and pressure 

control equipment. Six of the firms in our sample fell in this category. 

Oil/Gas Services 

The category of “Oil/Gas Services” incorporates a broad range of industry-related services and 

products that support GOM oil and gas production activities. This category remains crude and 

can be viewed as a residual category for services that do not fit neatly into our other three 

categories. What follows are examples of descriptions of firm activities provided by respondents 

(I = field researcher; R = respondent). As can be seen, the descriptions of oil company service 

range from relatively precise to rather diffuse. 

Firm #11 

R: The major activity of our company...we are offshore caterers so we are basically 

looking for cooks with experience. We call them stewards. We look for night cooks and 

bakers. Then we have people that are called utility hands which wash dishes, make beds, 

mop floors, and clean bathrooms and stuff like that. That is what our business is. We are 

a completely service oriented company. 

Firm #14 

R: The major activity is offshore on oil installations. Painting and sand blasting. 

Firm #10 

R: Welding, sandblasting, and painting. 

Firm #21 

R: We provide life boat services, wire line services, and electric line services. 

Firm #20 

R: ... we work on platforms. I guess marine construction service company is not the right 

word... We work on pipelines, we work on platforms, drilling rigs. We do anything that 

has to be done under water. 

Firm #17 

R: We provide labor...that is usually used on a production platform. Either as a 

production operator or a roustabout. 

Firm#28 

R: ...we rent specialized tools and equipment that is oil field related, including drill pipe, 

drill collars, tubing, blowout preventions, and torque turning equipment. We also 
5 

provide personnel to install and remove customer owned casing at well sites and operate 

company owned diesel driven hammers and welding machines. 

Firm #22 

I: By service, what kind of service do you provide? 

R: Anything related to the oil field. 

I: Anything? 

R: Just about. There is very little we don’t do...from the beginning to production. 

Year Established and Number of Employees 

The oldest firm in our sample was established in 1940 and the newest in 1997. As can be seen in 

Table 1, the year firms were established is fairly evenly distributed across three time periods. 

Ten firms were established prior to 1960, ten were established relatively recently (since 1980), 

and twelve came into being between 1960 and 1979. 

The number of employees currently employed by the firms also varies considerably, ranging 

from 17 to 1,800 workers. Based on the employment figures reported to us by our informants, 

the firms in our sample employed a total of about 14,800 workers in the GOM. Looking at per 

firm averages, the firms employing the largest number of workers were in the metal fabrication 

business (770.5) while oil and gas services companies accounted for the lowest average number 

of employees (267.5) (Table 1). 

Table 1 

Year Established and Number of Employees by Type of Firm 

Type of Firm 

Firm Characteristics All Firms 

(N=34) 

Oil/Gas Services 

(N=15) 

Ship Building 

(N=8) 

Metal 

Fabrication 

(N=6) 

Air/Water 

Transport 

(N=5) 

Year Established 

Pre 1960 

1960-1979 

After 1980 

No Information 

Mean 

10 

12 

10 

1 

1969

5 

3 

6 

1 

1970

2 

4 

1 

0 

1966

1 

2 

3 

0 

1974

2 

3 

0 

0 

1968

Number of 

Employees 

<100 

100-499 

>499 

Mean

5 

17 

12 

435.8

4 

6 

5 

267.5

0 

6 

2 

500.6

0 

2 

4 

770.5

1 

3 

1 

435.0
6 

Changes in Number of Workers 

We asked respondents to estimate changes in the number of workers they employed during the 

last decade. While the numbers varied from firm to firm, overall the number of employees has 

increased for most firms. Twenty-two of the sampled firms experienced an increase in the 

number of employees, while only six reported a decrease (Table 2). 

Table 2 

Changes in Total Number of All Workers and Part-time Workers in Last 10 Years by Firm Type 

Type of Firm 

Workforce 

Characteristics 

All Firms 

(N=34) 

Oil/Gas Services 

(N=15) 

Ship Building 

(N=8) 

Metal 

Fabrication 

(N=6) 

Air/Water 

Transport 

(N=5) 

Total Number of 

Workers 

Increase 

Decrease 

No Change 

22 

6 

6 

10 

3 

2 

6 

0 

2 

3 

2 

1 

3 

1 

1 

Part-time Workers 

Increase 

Decrease 

No Change 

4 

0 

30 

2 

0 

13 

1 

0 

7 

0 

0 

6 

1 

0 

4 

When we asked about changes in the number of part-time workers, most firms indicated that 

they only hire full-time employees. However, the distinction is not always clear, as illustrated by 

this exchange (Firm #18). 

I: What about the number...have you seen an increase or decrease in the number of full 

time workers you have at any given time? Do you have more full time workers or fewer 

full time workers than you used to? 

R: No, it stays pretty stable. We don't normally lose. The only place we would lose is in 

our hourly people that come and go... 

I: Are they part timers? 

R: Yes and no. We don't guarantee hours so they can work at several places. In a way 

they are but in a way they are not. 

I: As for as being part time? 

R: Yes. 

This definition of full-time employment was echoed by other respondents and is consistent with 

U.S. Department of Labor (2002) claim that, in the oil and gas service industry, “only 1 

employee in 20 works fewer than 35 hours a week, because opportunities for part-time work are 

rare.” 
7 

Organizational and Technological Changes 

One of the questions guiding our research is the extent to which firms have adjusted 

organizationally and technologically to changes in the oil and gas industry. We asked 

respondents to tell us about what they considered to be the major changes within the last two 

decades. Although responses varied, and no clear pattern seems to define the overall industry 

experience, it was clear that the industry has not remained static. Nearly one third of the 34 

respondents reported they were less specialized in comparison to the 1980's. This could possibly 

be attributed to “being bought out” by another company (which happened to eleven of the firms 

in our sample) and/or to the acquisition of another company which helped them expand into 

other areas (reported by four firms). Being “bought out” was not always straightforward in 

outcome, as demonstrated by the following excerpts from our guided conversations. 

Firm #10 

I: I want to ask you about changes that might have occurred. Have there been any 

changes...in the company’s major activities? 

R: At one time the company was involved in metal building fabrication and erection also 

but that was dropped. When the slowdown took place in the early 80s. 

I: Ok. 

R: Ever since then...,as a matter, of fact new ownership took place. The company was 

sold at that time in 1982 and the new owners concentrated strictly on oil field activities. 

I: So it changed owners in ‘82 and they focused on the oil field? 

R: Correct. 

I: Did you...know what the consequences were of...just concentrating on the oil field 

rather than the general public? 

R: Well,...for one thing, it was a way to reduce overhead. You didn’t have...to do the 

sales work on the industrial end of it with the building. They were able to eliminate a 

whole division there and operate with a little more stream line. 

While the experience of Firm #10 was one of focusing activities and streamlining the business, 

we find mergers do not necessarily have a lasting impact on the mission or scope of the business. 

Firm #30 

R: [Our firm] in its early years has gone through several name changes through all these 

years but it bought the [firm xxx] company. They were the largest oil manufacturer in 

the world. [Firm xxx] owns [firm xxx]. In 1995 the company I am with which is now 

called [firm xxx] was spun off,...we merged with another offshore construction company 

called [firm xxx]. We were spun off and we are majority owned by [firm xxx]. 

I: That has been since 1995? 

R: 1995, right. 

I: Since they took over have you seen a lot of changes in the structure? 

R: No. 

I: So you pretty much maintained your own identity. 

R: The joke is we all still act and smell alike. There is no difference what-so-ever. 

I: Nothing has changed in your organizational structure? 
8 

R: No. We are a separate corporation. But for all practical purposes...the marine 

construction business we are involved in...all of that was spun off as one separate 

corporation so it all looks the same. Yes it has been restructured, we have a president, a 

board and what have you. Day in and day out activities are no different. 

Mentioned numerous times in the conversations was the effect of the downturn on the industry in 

1998. Of particular concern in this regard was the impact this has on the ability to keep an 

adequate workforce in anticipation of a resurgence in the industry. 

Firm #31 

I: How do you think changes in the industry have affected your company? If somebody 

said...what kind of changes have there been that...affected your company, what would 

come to mind? 

R: It has affected us in trying to hire quality people. The industry has affected us in 

hiring quality people because when you drop from [a] 200 work force to 50 overnight and 

then have to gear back up a month later to 200. It is very difficult. When you have to 

gear up you are accepting because of nutrition to feed the work force you are accepting 

lower qualified person to do a certain criteria job. You have to. 

I: I understand. Is your company now at that location having problems finding qualified 

workers? 

R: No, because everybody else is laying off. 

Firm #30 

I: Have you seen an increase or decrease in the number of full-time employees? 

R: Decrease. 

I: Could you tell me a little bit about that. Is that perhaps due to the bust back in the 80s? 

R: No, the cause was the bust of 1998. 

I: 1998? 

R: If you would have called me last year I would have told you we were above 3000. 

I: So this year you have...? 

R: It is activity based. The difference between now and the bust in the 80s is that the ship 

building industries in this area are currently doing very well. We are not in the ship 

building business. We have a lot of attrition to [the ship building industry] but it has 

helped us too. We like to see our guys remain employed. We just don’t have enough 

activity here right now. 

I: So you have fallen from 3000 from 1997 to 2200 in 1998? 

R: Yes. At the end of 98. We are in the construction business so that is not very low. 

Four respondents spoke of the establishment of new managerial/administrative positions within 

their companies. “Running a tighter ship,” “increase in quality control,” and “to build a better 

company” were mentioned as consequences of these positions. 

Also mentioned twice as a major change in the industry was the shift to deepwater activities. 

When asked about this shift, one respondent put it this way: 
9 

Firm #30 

R: Yes, I would say and you really hit on the main thing... [It] went to the offshore from 

shallow waters to ultra deep waters. And, you want to talk about the greatest changes in 

the oil business, it has got to be that. We survive on the very deep waters. 

Despite organizational adjustments to changes in the industry, most companies reported 

relatively little change in the focus of their operations. 

Firm #20 

R: Boy, this company changes on a daily basis. The changes are structural changes 

within the organization. Client needs--we change to adapt to client needs and requests. 

I: [Given] what they intended to do when they were first established, have those 

activities remained pretty constant? 

R: Yes. The core company as it was established is still the core company, which is 

diving services. 

I: So that is what it has always been? 

R: Yes. We have branched out from there to...remotely operated vehicles...things of that 

nature. We have changed but diving work is our core business. Probably will continue 

to be, unless something drastic happens. 

Firm #31 

R: Other than being bought out in 1997 by (Firm xxx), the organization is still pretty 

much the same as it was in 1977. It is still run by (two names),...those guys are still 

pretty much at the top of the chain. 

I: Do you find that surprising or is that pretty normal in this case? 

R: I find it very normal in this type of industry because in this industry it is who you 

know. 

Two additional observations merit comment. First, only one company indicated that technology 

was driving down demand for labor (doing same amount of work with half as many people), yet 

this same company had increased the number of employees overall, and was finding it difficult 

to get enough qualified workers. Second, in terms of technological and organizational changes 

in processing activities, respondents frequently spoke in terms of licensing requirements, 

certification, increased demand for technological skills, safety training programs, and 

compliance with environmental laws. Clearly, companies were finding it increasingly difficult to 

comply with various regulations and associated paperwork. 

Changes in Interrelationships Among Firms 

The second question in our analysis has to do with changes in the interrelationships among firms. 

Our hunch was that changes in the industry would include a propensity to contract out functions 

that had originally been handled by the firms themselves. However, when we asked our 

informants about such activities, we were generally met with questions about what we meant by 

“contracting out.” Most respondents indicated little change in such activities. We were unable 

to discern if this was due to diversification and/or acquisitions. For example, two of the firms in 
10 

our sample were owned by a parent company where one was a shipyard and the other a ship 

repair facility. 

In another example, one company was created for the sole purpose of building vessels for the 

other. 

Firm #1

R: Actually we are in a very unique situation...our company is fully owned by [Firm 

#34]. They are our only client. They [go] to oil companies or vendors...that require 

specific custom-made vessels. Then they come to us.... 

R: Actually we were created from the ground up. We were created to give [Firm #34] 

clients the personal custom built vessels that they required. We have our own 

engineering department so everything we do is ours from scratch paper to design to 

marching the vessel. It is individually done for our client and done completely by our 

company. 

However, this type of relationship was atypical. The majority of the firms we interviewed did 

not have built-in organizational ties. 

Perceptions of the Capacity of Local Communities of Supply Labor

Central to our research interest was the question of how oil and gas industry firms viewed the 

viability of the local labor supply in Louisiana. In this regard, we asked whether firms hired 

workers from Louisiana or elsewhere, and if they felt that the local labor supply was adequate 

both in terms of skill level and availability. Table 3 summarizes the responses. 

Table 3 

Changes in Skill Level of Workers and Problems Finding Qualified Workers by Firm Type 

Type of Firm 

Workforce 

Characteristics 

All Firms 

(N=34) 

Oil/Gas Services 

(N=15) 

Ship Building 

(N=8) 

Metal 

Fabrication 

(N=6) 

Air/Water 

Transport 

(N=5) 

Skill Level of Workers 

Increased 

Decreased 

No Change 

4 

11 

19 

3 

3 

9 

0 

3 

5 

1 

1 

4 

0 

4 

1 

Problems Finding 

Qualified Workers? 

Yes 

No 

20 

14 

9 

6 

6 

2 

2 

4 

3 

2 

With few exceptions, respondents indicated that the skill level of workers had not improved over 

the last decade. They felt that skill levels either remained the same or decreased. Directly 

related to skill levels is the problem of finding qualified workers. Twenty of the firms in our 

sample indicated that finding qualified workers was problematic. We asked each respondent to 
11 

speculate about why they were (or were not) having problems finding qualified workers. The 

following excerpts from our data reflect both positive and negative assessments of the local labor 

force. We begin with examples of positive assessments. 

Firms with Positive Impressions of the Labor Force 

As revealed in these excerpts, one reason some firms were expressing little concern over 

availability of labor stemmed from the current downturn in the industry. However, even taking 

the current lack of activity into account, these firms saw themselves as attractive employers with 

relatively loyal employees. Their attractiveness lies in firms’ willingness to train employees 

and/or their proximity to rural communities to which workers are attached. 

Firm #30 

I: The majority of your workers do come from Louisiana? 

R: Yes. We have Heberts and Boudreauxs all over the place. 

I: So, would you say that finding qualified labor for your company is, or is not, a 

problem? 

R: It has not been a problem. We are in a downturn right now which we anticipate to 

change back at some point in time. Will it be a problem then I couldn’t tell you. At the 

time everybody down here was really having a difficult time finding labor. We had our 

laborers. They had been here a long time. Everything is in good shape. Because of the 

downturn and people leaving us going into the ship building business... If the offshore 

business picks up next year I may have a different answer. As of now, we have not had a 

difficult time getting labor. That is contrary, I am sure, to what other people have said. 

Firm #1 

I: Why do you think finding qualified labor is, or isn't, a problem for you? 

R: At the moment I would say it is not tragic. Others are laying off and we are hiring, 

and we do have a history and a back log of work and that attracts people. There is also 

the problem when things start taking an upswing... There are so many companies in the 

local area...that we have to get in the competition. It is the type of work force that will 

jump from job to job. If this week [competitors] are paying one thing and [we] are 

paying another, [workers] will go there. It becomes a battle over who is going to give the 

benefits or the pay which is really what they want. They have the pick of the litter. Of 

course you have Mississippi and Alabama who are also in competition. 

Firm #20 

I: Is your company having problems finding qualified workers now? 

R: Yes...well, now, no. Now we are in the downturn. 

I: So you are not looking to hire? 

R: No we are not. 

I: Let us say three or four months ago were you having trouble? 

R: Yes, we were. 

I: And those workers that you were having trouble finding...these were welders? 

R: Welders and fitters. Skilled craft people rather than the college graduate. 
12 

I: Are most of your employees Louisiana residents? 

R: Most are yes. 

Firm #18 

I: Why do you think finding qualified workers hasn't been a problem for you, 

or at least not at this time? 

R: Because we have like a pool and we use...about 4 companies within the area that use 

the same type of workers and they go from one place to the other when things are slow. 

I: I see. So, if they are working at some place last week, they could be at your company 

this week? 

Firm #23 

R: We are in the rural area so we basically have to train everyone. When we interview 

for our skill professions like machinists...or stuff like that, we look at their math scores 

before we even know we have a cut off on math scores. We have an agreement with the 

Ville Platte Vo Technical which is across the street which is real handy. We have done 

real well in training our folks because...you can’t get to Ville Platte unless you really 

want to. Most of our work force is locally grown and we have had real good luck. They 

tend to stay with us. They want to live here in Ville Platte they don’t want to leave. 

Negative Labor Impressions 

As shown in Table 3, the majority of the firms in our sample were less than positive about the 

labor situation in Louisiana. Although most respondents agreed that a “labor problem” exists, 

not all agreed on the root, or cause, of the problem. We found that our respondents’ viewpoints 

in this regard could be organized into three relatively distinct categories – human capital 

deficiencies, personal attitude/motivational deficiencies, and industry-related circumstances. The 

first two categories place the cause of the labor problem on individual characteristics and the 

third category is more structural, it relates to the cyclical history of the oil and gas industry. 

Human Capital Deficiencies 

The lack of specific skills and low educational attainment were cited by some as major 

impediments to finding adequate labor locally. The following excerpts are illustrative of this 

interpretation. 

Firm #4 

I: Would you say that you are having problems finding qualified workers for your 

company? 

R: Yes. 

I: What kind of workers? 

R: People who have experience with aluminum materials and welding and fitting area. 

I: Specifically in that area? 

R: Yes. 

I: Would you say that your labor needs are met by Louisiana residents? 
13 

R: No. 

I: So do you feel like you have to...? 

R: We do have a group of employees that live in Texas but they are on-sight during the 

week. 

I: So they are working like a 7 and 7? 

R: They work more like four days a week and go home for three days. 

I: How many employees are coming in from Texas? 

R: About 50. 

I: So you think...? 

R: That is wrong I am sorry, about 30. 

I: You feel that the problem is Louisiana related. 

R: I think the problem is more because of our area... The jobs that we demand are 

[needed by] just a few other companies, but again, we are in a [specialized] area looking 

for the same type of positions. Therefore, our demand is high and [there is] a lot of 

competition between people that have particular skills. 

Firm #21 

R: Well, I think from what I have seen having been in Lafayette for a long time prior to 

coming to [firm name]. A lot of the skills that are needed today are not being taught in 

the classroom curriculum. Whether that be in a trade school or a major university. 

I: Do you see that as having changed over the years, or has that always been a problem? 

R: Back when the oil field was thriving in the late 70s there were a lot of trade schools 

that dealt more with welding certification and things of that nature. When the decline of 

the oil field came...in the early 80s, you saw those things go away and they have not been 

re-established. 

Firm #16 

I: You have told me that the company is having trouble getting qualified workers. 

R: Underline qualified. A lot of jobs call for qualified divers, welders, fitters and you are 

just not finding those anymore. 

I: Again, why do you think that is? Is it because there are so many jobs out there? 

R: There is a lot of work for the technical skills and there are so few with those technical 

skills. 

I: Why would [it be] so different now than say in the late 70s and early 80s? 

R: I don’t know, we didn’t have the business then. 

Firm #10 

I: Have you seen any changes in the skill level of your employees? 

R: Yes. The skill level is way down in new kids coming up. 

I: Why do you think that is true? 

R: I guess lack of experience is the main thing. They just don’t know how to work. 

I: What does that mean for your company? 

R: It means we have to spend a lot more in safety training,....a lot more time with them in 

the yard before we can send them out to customers so we don’t have accidents. It puts a 

burden on our company. 
14 

Attitudinal/Motivational Deficiencies 

A recurrent perception among the respondents was that the “labor problem” had to do with 

attitudinal or dispositional characteristics of workers or potential workers. Those in the local 

labor pool were viewed as not understanding the rigors of work in the oil and gas industry, not 

wanting to work, or, in general, lacking a positive work ethic. Several mentioned the reluctance 

of workers to spend lengthy periods of time away from their homes. One respondent went on in 

some detail about the extent to which drugs have become a major problem with the labor force. 

These critical views of the current work force were often couched as a contrast to earlier 

generations of workers who were considered to be more hard working and loyal to their 

employers. 

Firm #21 

I: What kind of workers are you having trouble finding? 

R: Most of ours are entry level helpers that are going to be anything from a deck hand on 

a boat to a helper in a wire line capacity. Meaning that they are going to assist an 

operator who is assigned a particular task. Finding individuals with those particular 

skills or individuals who truly understand what it means to work offshore. It is one thing 

to say you do that, but when you get stuck out there for 25 days and can't come home, it 

takes a different mind set to be able to accept that kind of work environment. 

Firm #11 

I: Have you seen any kind of change in the skill level of your employees? 

R: I have seen a big change from the past in people wanting to work because it is hard to 

find people that actually want to work... 

I: You don’t see as many people that actually want to work? 

R: Yes. Like I said, if I could find 200 that want to work, I would be sitting good. 

I: Yes? 

R: You have all kind of excuses why they can’t make it to work. 

I: Do you think that is more of a problem now than it used to be? 

R: Oh, three times more. 

I: Do you know why? 

R: The only thing I can figure is...that one problem we have now that we didn’t have in 

the past is the problem with dope. There are a lot of people that are having a problem. 

I: So they have failed their drug test? 

R: Yes. 

I: Do you think that people fail drug test now because there are more people using drugs 

or because tests are more closely regulated and administered? 

R: I think right now that it is a little of both. There are more people using it because it is 

more available. Right now there are more tests being done because people are noticing 

when somebody has an accident so you check them out. They might have some kind of 

drug in their system that is not suppose to be there. Everybody is checking it more, and 

more, and more to safeguard employees not on drugs. 
15 

Firm #2 

R: We had an apprentice program (first one established in Louisiana) that would allow 

high school kids to work toward...acquiring skills as welders or ship builders. 

I: It is going pretty well then? 

R: Well we have people who are participating in it, but you still go back to the same 

consideration. If you don’t find kids who are mature enough, focused enough to 

recognize that they are not going to go to college, and [who] recognize when they get out 

they don’t want to get a job flipping hamburgers. They have to be willing to put in the 

effort, and it is not a ticket out of school because they still have curriculum requirements 

to fulfill and then they have work requirements--on the job training...and they have to go 

through the shipyard. So it has been a success. It has been a success to the extent that we 

have gotten some kids who are involved who are progressive. It hasn’t been a success to 

the extent that we don’t have many kids involved. The numbers haven’t been there. 

I: So your problems in finding workers are more... 

R: Our biggest problem is finding people who are willing to want to work. People who 

want to acquire a skill or trade and who will avoid absenteeism problems. People who 

will come to work. That is the biggest problem we have. 

I: I have heard that. Why do you suppose that is? Do they just not have a... 

R: I guess the very trite or pat answer would be that, as parents, we haven’t instilled the 

work ethic into our kids. They expect things to be... I am going to make a general 

statement. It doesn’t apply to everyone but they want something for nothing. 

I: Yes, and they don’t want to get dirty and they don’t want to work that hard perhaps? 

R: When they start they want to go to the top. 

I: Yes. 

R: Right away. So their expectations are unrealistic. 

I: So that problem, you don’t think, is necessarily a Louisiana problem? 

R: Oh no. 

I: How much do you go out of the state to hire professional or production people? 

R: We have professionals that come in from out of state. 

I: So you recruit for engineering type jobs? 

R: Right. 

I: Are most of your professional people recruited outside the state? 

R: No, most of them are recruited in state. 

I: The majority come from LSU and Southeastern? 

R: Most of our professionals come from places like UNO. 

Firm #3 

I: Are your labor needs met by Louisiana Residents? 

R: No, because people don’t want to work. I may end up having to go out of state to look 

for people with better work ethics, although it’s probably going to be the same 

everywhere . 

I: Are your workers from Louisiana? 

R: The “bust” may have scared people off. A lot of people lost their jobs and were out on 

the street; lost their homes, cars, etc. -- think they lost their work ethic too -- now they 

want to be taken care of, work less and fish more. 
16 

Industry-Related Circumstances 

Although the respondent from Firm #3 suggests that laborers have lost their work ethic, this 

respondent also mentions the potential effects of the “bust” on the labor force. Placing the 

source of the labor problem on such structural factors was another recurring theme in the 

comments we received. Essentially, the argument is that the recurring busts and booms in the 

industry have pushed many workers out of the oil and gas industry or left a disillusioned residual 

labor pool. 

Firm #29 

R: Yes, lack of skilled craftsman. Because the oil industry is so volatile people don't 

stay. They get in and they say its not for me and I need something more secure and steady 

so they do something else. They go deliver water for Kentwood or they go work at the 

hospital or something like that. 

Firm #31 

R: Because the industry has burned the employee over and over again and they went into 

another industry. You can't keep hiring them, work them for a year and a half and two 

years, and lay them off for 6 months. That is what the industry has done. That is why 

you have a very difficult time getting anybody to come in this industry. 

Firm #24 

I: Is your company having problems finding qualified workers? 

R: We have had that problem for a good while. We just try to deal with it. We try to 

train them to be skilled workers. 

I: What kind of workers are you having trouble finding, sir? 

R: Fitters and welders. 

I: Why do you think that finding qualified labor has been a problem? 

R: It is due to the business picking up and the number of people in the industry. It 

doesn’t do well and, then, it does well, and it out did the number of people that were 

interested in that industry. 

It is important to reiterate that opinions about the “labor problem” varied considerably. Some 

firms were not experiencing problems and spoke of a relatively loyal and well skilled work 

force. Others found that securing adequate labor has become increasingly problematic and 

suggested that this is largely due to either a declining skill or educational level. Still others 

argued that the work ethic found in previous generations of workers has changed and that it is 

now difficult to find motivated employees. Finally, some of our respondents see the labor 

problem stemming from the volatile nature of the oil and gas industry itself. With a history of 

busts and booms, workers have become discouraged and moved on to other kinds of work. 
17 

SUMMARY AND CONCLUSIONS 

The impetus for the research reported here was to empirically examine the demand side of labor 

in the oil and gas industry in the Gulf of Mexico (GOM) during a period of economic expansion. 

When we began the project, the oil and gas industry was experiencing an eleven-year high point 

in activity, yet growth in oil and gas related employment levels continued to be low. Although 

this slow growth in employment was attributed to a shortage of qualified workers, there was little 

evidence to support this supposition. Our intention was to shed some light on this slow 

employment growth. 

However, the high level of production that the oil industry enjoyed up through 1997 took a rapid 

downturn beginning in late 1997. This became evident only after our fieldwork was under way. 

Hence, the core question driving our project dropped in relevance as the availability (or lack of 

availability) of workers became less of a pressing concern for the firms included in our study. 

This resulted in mid-stream modification of our questions about the current labor situation to a 

more general set of questions dealing with changes experienced by firms in the oil and gas 

industry in the GOM. In particular, we focused on the following three issues as they relate to 

labor demand. 

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

2. Changes in interrelationships among firms. 

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

Our data were derived using a qualitative research strategy. The information presented is largely 

in the form of excerpts from guided conversations with representatives of firms identified as 

playing a major role in supporting the oil and gas industry in the GOM. Our informants included 

either CEOs or personnel officers from the firms. The three issues mentioned above were the 

organizing stimuli for the guided conversations. Our sample of firms was drawn from two multiparish labor market areas in Louisiana – Lafayette and Houma. We selected firms from existing 

listings in phone books and from lists published by professional groups. We also solicited names 

of firms from our respondents and added them to our sample in the course of the field work. In 

all, our sample included 36 firms, only two of which declined to participate. 

One of the first tasks with our data was to place the firms in our sample into meaningful 

categories. This was not as straightforward as anticipated, revealing the diversity among the 

firms supporting the oil and gas industry in the GOM. We found that the companies fit roughly 

into four categories: air and water transportation, metal fabrication, ship and boat building, and 

oil and gas services. While the first three categories fit existing categorizations, the last category 

– oil and gas services – is a residual category which turned out to have the largest number of 

firms of any category. This category involves a wide span of services including, among other 

things, catering, painting, welding, electric line installation, tool rental, and labor supply. 

Although many of our respondents reported that their companies were not hiring at the time of 

our field work, about two-thirds of them said that the number of employees in their firms had 
18 

increased over the last decade. And, contrary to trends in other industrial sectors, there was no 

apparent shift from full-time to temporary or part-time employees. 

We examined how firms adjusted organizationally and technologically to changes in the oil and 

gas industry over the last two decades. Although no clear pattern seemed to define the industry 

experience, it was clear from our directed conversations that the industry did undergo change. 

Nearly one third reported that they were less specialized in comparison to the 1980's. This could 

possibly be attributed to “being bought out” by another company or through acquisition of a 

company which helped them expand into other areas. Despite the organizational adjustments 

mentioned by respondents, most companies maintained their core interests and activities, with 

relatively little change in the focus of their operations. 

Another of our questions addressed changes in the interrelationships among firms. With few 

exceptions (a ship repair facility and a ship building company owned by the same parent 

company; a ship rental organization that created its own ship building company), our 

respondents mentioned very little change in the extent to which they contracted out for services 

or products. 

In response to our queries about the ability of local communities to supply labor needs, fourteen 

indicated that they had no problems securing adequate labor, but significantly, twenty of the 

respondents told of problems with maintaining an adequate workforce. It should be added that 

most of those who reported little problem with the labor supply were concerned about the future 

viability of local workers for when the industry was again in an upswing. 

The issue of the quality of workers brought out the most intense comments in the directed 

conversations, and these comments tended to be negative. Respondents’ reasons for the “labor 

problem” fell into three general categories: human capital deficiencies, attitudinal/motivational 

deficiencies, and industry-related conditions. Some respondents mentioned human capital 

deficiencies, such as a lack of job-related skills and low educational attainment, as being a major 

impediment to finding an adequate workforce. Several companies mentioned having to train 

their employees (at expense and burden to themselves), and two stated they work with 

vocational-tech and/or high schools in their area. Attitudinal and motivational deficiencies came 

up in the conversations several times. These respondents felt that the “labor problem” is at base 

a type of generational shift from a positive to negative work ethic (e.g., “people want more 

money for less work”, “there’s no loyalty to an employer nowadays”, “people don’t want to 

work”). Finally, there are those who attribute the local labor problem structural concerns. That 

is, the erratic behavior of the oil and gas industry, with its boom and bust cycles, has left 

discouraged and disgruntled workers, many of whom chose not to return to the industry. 

Had we probed more, we may have reached a better understanding of specifically what 

companies are doing or plan to do in times of upswings. As it stands, none of our respondents 

mentioned any strategies for extending the workforce beyond the current state of affairs. 

To conclude, our research reveals an industry that is concerned with the problem of supply and 

quality of labor in Louisiana, but one that has not reached consensus on the roots of the problem 
19 

nor on how to deal with the problem. The upswings and downswings of the oil and gas industry 

clearly contribute to the instability of the labor supply. Although we were not able to directly 

address this issue with workers who are affected by these swings in the fortunes of the industry, 

it contributes to a type of fatalism amongst their employers. The assumption among our 

respondents is that little can be done about these intrinsic swings in the industry and by 

extension, little can be done about retaining those who are affected. Equally daunting to the 

industry is the human capital issue. With the exception of a few firms that were willing to train 

workers, or that had ties to schools, we heard no mention of strategies to increase the human 

capital resources of potential workers and hence raise the quality of the labor supply. Finally, 

although we found considerable sentiment that local workers lack a work ethic or motivation, we 

heard little about how this could be addressed. 
20 

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August:10-15. 

The Daily Advertiser Staff. 1997. Rig count at highest level since early ‘86. The Daily 

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Darbonne, M. 1997. Drilling rig labor in short supply. The Daily Advertiser. February. 12, 

1997. 

Dodson, J. and L. LeBlanc. 1997. Operators abandoning flex trend in favor of deepwater and 

shallow gas. Offshore. January:42-46. 

Fitchen, J. 1991. Endangered spaces, enduring places: Change, identity, and survival in rural 

America. Boulder, CO:Westview Press. 

Flatern, R. 1997. Shelf exploration rejuvenation activity at full pace. Offshore. January:50-52. 

Gramling, R. 1996. Oil on the edge: Offshore development, conflict, and gridlock. Albany, 

NY: SUNY Press. 

International Petroleum Encyclopedia. 2000. Oil and Gas Journal, On-line Research Center, 

http://orc.pennnet.com/ipe/encyc_links.cfm. Volume:2000. 

Lofland, J. and L. Lofland. 1995. Analyzing social settings: A guide to qualitative observation 

and analysis. Belmont, CA:Wadsworth. 

Oi1 and Gas Journal Staff 1996. Oil and Gas Journal. September 30:26. 

Simmons, M. 1996. The Gulf of Mexico -- Silicon Valley to onshore oil and gas industry. Sea 

Technology. August:27-32. 

Tolbert, C. and M. Sizer. l996. U.S. commuting zones and labor market areas: A 1990 update. 

Rural Economy Division, Economic Research Service, U.S. Department of Agriculture. 

Staff Paper No. AGES-9614. 

U.S. Department of Labor, Bureau of Labor Statistics. 2002. Petroleum Engineers, on the 

Internet at http://www.bls.gov/oco/ocos037.htm. 
The Department of the Interior Mission

As the Nation's principal conservation agency, the Department of the Interior has responsibility 

for most of our nationally owned public lands and natural resources. This includes fostering 

sound use of our land and water resources; protecting our fish, wildlife, and biological diversity; 

preserving the environmental and cultural values of our national parks and historical places; 

and providing for the enjoyment of life through outdoor recreation. The Department assesses 

our energy and mineral resources and works to ensure that their development is in the best 

interests of all our people by encouraging stewardship and citizen participation in their care. 

The Department also has a major responsibility for American Indian reservation communities 

and for people who live in island territories under U.S. administration. 

The Minerals Management Service Mission 

As a bureau of the Department of the Interior, the Minerals Management Service's (MMS) 

primary responsibilities are to manage the mineral resources located on the Nation's Outer 

Continental Shelf (OCS), collect revenue from the Federal OCS and onshore Federal and Indian 

lands, and distribute those revenues. 

Moreover, in working to meet its responsibilities, the Offshore Minerals Management Program 

administers the OCS competitive leasing program and oversees the safe and environmentally 

sound exploration and production of our Nation's offshore natural gas, oil and other mineral 

resources. The MMS Minerals Revenue Management meets its responsibilities by ensuring the 

efficient, timely and accurate collection and disbursement of revenue from mineral leasing and 

production due to Indian tribes and allottees, States and the U.S. Treasury. 

The MMS strives to fulfill its responsibilities through the general guiding principles of: (1) being 

responsive to the public's concerns and interests by maintaining a dialogue with all potentially 

affected parties and (2) carrying out its programs with an emphasis on working to enhance the 

quality of life for all Americans by lending MMS assistance and expertise to economic 

development and environmental protection.