I’ve been involved with the drilling industry for many years, and have seen booms and busts come and go. The present economic situation reminds me of the Great Depression of ‘83, and while I think it might get worse before it gets better, so far, it still is better than what I’ve seen in other countries. I say “so far” because, while we have not quite yet given up our freedoms and our heritage, we are sliding in that direction. Want to know how far it could go? I was involved in a real-world example some years ago that I’ll share with you.
During the 72 years (1917 to 1989) that the communists were in charge of the
Soviet Union, building their workers’ paradise, they owned ALL the drilling
rigs in the country. They assigned people to work on them. They provided bits,
fuel, casing, pumps – everything needed to drill wells. The driller never had
to bother to figure out payroll; the government took care of that. The driller
never had to shop for, price or buy bits, casing, mud or anything else; it was
provided for him. Also, the driller never made a profit, either; he just had a
job – for life.
This scheme finally came to an end in 1989 when the government realized they
were bankrupt. Seems like about 71 years, 11 months, 29 days too late, but
that’s just my opinion. They decided the best way to handle it was just to give
the rig to the driller and tell him he was in business for himself –
entrepreneurial freedom and all that stuff. It didn’t take long for the driller
to figure out that he wasn’t making any money. Hey, those bits cost money, and
he had that pesky payroll, taxes (you have to pay your fair share, you know)
and all sorts of hidden costs nobody ever told him about, plus he had to
collect money from the customers who probably didn’t have any to begin
This is where I got involved. It seems that a small group of these drillers
came to the United States to see how we did it and try to improve their lots in
life. We met with them on one of the upper floors of some fancy building in
downtown Houston, and reviewed their drilling operations. What they wanted were
suggestions to improve their productivity. While looking over one of the
operations, I found that a lot of the formations and depths and such were
pretty similar to what I had been drilling at home. We generally made two to
three wells a week with a two-man crew, and had a pump guy come behind us and
finish the job. They were drilling three to four wells a year, with a 15-man
crew, and wanted to know how to improve productivity.
Since they asked, I told them. Most of you know me as a soft-spoken, diplomatic
kinda guy, so I told them, “Run off 12 helpers, and tell the rest to show up
sober.” That led to several coughing fits, two cases of apoplexy and one case
of the vapors. I was invited to take my unworkable capitalist propaganda
elsewhere. So much for giving advice to someone who doesn’t want to hear it.
What did they expect me to say, “Get a government grant”?What brought this
story to mind is the present economic and political situation. For years, our
government, with the approval of the dumb masses, slowly has been edging in
this direction. But here lately, we’ve greased the skids on a runaway train.
Anyone who’s been around for a while and learned history knows just where we’re
headed. The problem is that there aren’t enough of us to win any elections when
the government just keeps promising more and more goodies to the people. It is
like two wolves and a lamb voting on what’s for dinner – the majority
Since the election, the government now either owns or controls two out of three
U.S. automakers and a bunch of big banks, they have an eye on the entire
healthcare industry, and that’s just for starters. This is called socialism,
and will work just as well here as it has everywhere else it’s been
I have owned Chevy trucks for 40 years, but there is NO way I’m ever going to
buy anything from Government Motors. Same with Fiat; oops, I mean Chrysler.
I’ve never been much of a Ford man, but I guess I am now. At least they still
are a free company. I’ll just get used to the fix-or-repair-daily thing.
Some things are immutable truths, whether we want to believe them or not, such
as tax something you want less of. Tobacco comes to mind. We tax the tobacco
user to subsidize the health-care costs of the tobacco user. How much is that
last pack of cigarettes going to cost when everybody, but one, has quit? The
corollary to this is re-ward something you want more of.
It is going to get interesting when the government tells you what kind of rig
you can have (environmentally friendly, of course – can you say, Algore 3000?),
where you can drill, and that they send you all the hands you need, whether you
need them or not. It won’t happen right away, but it will happen if we don’t
I’m not smart enough to know how to fix all this, but I do know we’re in for a
tough time until we get up on our hind legs and make a change.
The World According to Wayne: Some Unpleasant Similarities
July 1, 2009