Reports of what gets stolen from gas and oil fields read like an exhaustive hardware supply list: Drill bits, valves, metal piping, copper wiring, vehicles, trailers, hand tools, pumping unit engines and, of course, oil – perhaps millions of barrels’ worth. Such theft has long been a problem in Western oil fields, but it has spiked in recent months.
The surge in crime has exacerbated financial woes in an industry suffering from cratering prices. National employment in oil and gas extraction is at its lowest level since February 2012, down nearly 9 percent from the peak levels of 2014, according to the Bureau of Labor Statistics. The slowdown has coincided with a rise in theft, as idle well sites are raided for equipment of value, often by laid-off workers with knowledge of the rigs.
“The people that are doing the theft know the value of these things,” said John Chamberlain, executive director of the Energy Security Council. He and other industry insiders say that, in general, incidents of theft correspond with job layoffs.
Over the past 12 months, oil and gas prices have slipped lower and lower. As a result, Russell Winn, an account executive with IMA, Inc., a brokerage firm closely involved with the gas and oil industry, says, “We probably are seeing a 30 to 35 percent increase in our theft of equipment over what we saw the last two years.”
Values of stolen items vary, but one truckload of drill pipe can be worth $100,000, while pilfered scrap metal from a single worksite can fetch more than $10,000. Last April, seven drill bits worth $267,000 were reported stolen from a site in Weld County. All that adds up to tens of millions of dollars lost annually. In Texas alone, the Energy Security Council estimated that 1 to 3 percent of the state’s 700 million barrels of oil production was stolen in 2013.
The problem: Unattended and out-of-service oil wells are easy targets.
“You have a million dollars worth of assets in the middle of nowhere, just sitting there,” said Brad Roberts, an oil well servicer and owner of Tool Branding, a company that stencils marks on machinery to help with recovery. “During depressed times, you have people that are unemployed and they’re looking for ways to turn anything into cash. ... It’s a horrible situation.”
Experts like Chamberlain see the crimes mostly as an “individual, opportunistic thing.” But organized, interstate crime networks can be involved, with stolen assets being moved across state lines and even international borders.
“Equipment could be stolen from Colorado and end up in Mexico in 24 hours,” said Kenny Jordan, executive director for the Association of Energy Service Companies, which runs the website stopoilfieldtheft.com.
While oilfield theft is an area of growing concern for industry officials and law enforcement alike, underreported cases and jumbled jurisdiction make it hard to quantify the issue’s magnitude.
Industry organizations say that while exact figures aren’t available, the price tag is substantial. Even a Texas-based FBI oil field theft task force does not have an estimate about the cost incurred locally or on a broader scale. “We’re going to try to track this better in the coming year,” says task force coordinator Andrea Simmons.
But law enforcement is devoting special attention to the issue in some areas. Along with the FBI task force in west Texas, a similar unit is operating in Oklahoma. On the local level, enforcement falls to certain sheriff departments, such as in San Juan County, New Mexico.
Meanwhile, others are taking do-it-yourself approaches to cracking down. Jordan’s organization built an online serial number database to help recovery efforts, though he says the response has been underwhelming.
Stamping, like that done by Roberts, provides some opportunity to recover stolen equipment, but experts say that an item is typically gone for good once it’s nabbed from the oil field.
