The moon was a waning crescent sliver Sept. 9 when a
man emerged from an oil tanker, sidled up to a well outside Cotulla,
Texas, and siphoned off almost 200 barrels. Then, he drove two hours to a
town where he sold his load on the black market for $10 a barrel, about
a quarter of what
West Texas Intermediate currently fetches.
“This is like a drug organization,” said Mike Peters, global security manager of San Antonio-based
Lewis Energy Group, who recounted the heist at a Texas
legislative hearing. “You’ve got your mules that go out to steal the oil
in trucks, you’ve got the next level of organization that’s actually
taking the oil in, and you’ve got a gathering site -- it’s always a
criminal organization that’s involved with this.”
More from Bloomberg.com:
France Bombs Islamic State as Valls Warns of More Attacks
From
raw crude sucked from wells to expensive machinery that disappears out
the back door, drillers from Texas to Colorado are struggling to stop
theft that has only worsened amid the industry’s biggest slowdown in a
generation. Losses reached almost $1 billion in 2013 and likely have
grown since, according to estimates from the Energy Security Council, an
industry trade group in Houston. The situation has been fostered by
idled trucks, abandoned drilling sites and tens of thousands of lost
jobs.
“You’ve got unemployed oilfield workers that unfortunately
are resorting to stealing,” said John Chamberlain, executive director of
the Energy Security Council.
In Texas, unemployment
insurance claims from energy workers more than doubled over the past
year to about 110,000, according to the Workforce Commission. In North
Dakota, average weekly wages in the Bakken oil patch decreased nearly 10
percent in the first quarter of 2015, compared with the previous
quarter, according to the Federal Reserve Bank of Minneapolis.
More from Bloomberg.com:
Putin Goes From G-20 Pariah to Player at Obama Turkey Talk
With
dismissals hitting every corner of the industry, security guards hired
during boom times are receiving pink slips. That’s leaving sites
unprotected.
“There are a lot less eyes out there for security,”
said John Esquivel, an analyst at security consulting firm Butchko Inc.
in Tomball, Texas, and a former chief executive of the U.S. Border
Patrol in Laredo. “The drilling activity may be quieter, but I don’t
think criminal activity is.”
Special Charges
States are
trying to get a handle on the theft, which can include anything from
drill bits that can fetch thousands on the resale market, to copper
wiring that can be melted down, to the crude itself. Texas lawmakers met
earlier this month in Austin to craft a bill that would increase
penalties related to the crime. A similar measure passed both houses of
the legislature this year, but Republican Governor
Greg Abbott vetoed it, saying it was “overly broad.” Lawmakers,
at the urging of industry, are hoping to revive it next legislative
session.
More from Bloomberg.com:
Smashing Islamic State After Paris Attacks a Huge Challenge
In Oklahoma, law-enforcement officers recently teamed with the
Federal Bureau of Investigation to intensify their effort. In
North Dakota, the FBI earlier this year opened an office in the heart of
oil country to combat crimes including theft, drug trafficking and
prostitution.
The lull in drilling has given oil companies more time to scrutinize their operations -- and their losses.
During
booms “they are moving at such a rapid pace there’s not a lot of
auditing and inventorying going on,” said Gary Painter, sheriff in
Midland County, Texas, in the oil-rich Permian Basin. “Whenever it slows
down, they start looking for stuff and find out it never got delivered
or it got delivered and it’s gone.”
Oil theft is as old as
Spindletop, the East Texas oilfield that spewed black gold in 1901 and
began the modern oil era. In the early 1900s, Texas Rangers were often
deployed to carry out “town taming” in oil fields rife with roughnecks,
prostitutes, gamblers and thieves. In 1932, 18 men were indicted for
their role in a Mexia ring that included prominent politicians and
executives and resulted in the theft of 1 million barrels.
The allure of ill-gotten oil money remains strong.
In
April, the Weld County Sheriff’s office in Colorado recovered almost
$300,000 worth of stolen drill bits. In January, a Texas man pleaded
guilty to stealing three truckloads of oil worth nearly $60,000 after an
investigation by the FBI and local law-enforcement officers. Robert
Butler, a sergeant at the Texas Attorney General’s Office whose primary
job is to investigate oil theft, said in the legislative hearing that he
is investigating a case of 470,000 barrels stolen and sold over the
past three years worth about $40 million.
In Texas, oilfield theft
has become entangled with Mexican drug trafficking, as the state’s
newest and biggest production area, the Eagle Ford Shale region, lies
along traditional smuggling routes. That’s thrust oil workers in the
middle of cartel activity, and made it even more difficult to track
stolen goods across the U.S.-Mexico border, said Esquivel, the retired
Border Patrol agent.
Trickling Away
Oil thieves are a
slippery bunch. Criminals sand off serial numbers of stolen goods to
evade detection or melt them for scrap. Tracking raw crude is even
trickier, since tracing it to its originating well is almost impossible
once it’s mixed with other oil. Many companies fail to report the crime,
making it difficult for investigators to trace the origins of stolen
goods.
Many of the crimes are inside jobs, with thieves doubling
as gate guards, tank drivers or well servicers. Last year, a federal
grand jury indicted three Texas men in connection with the theft of $1.5
million worth of oil from their employers, including Houston’s Anadarko
Petroleum Corp.
“Your average person wouldn’t know the value of a
drill bit or a piece of tubing or a gas meter,” said Chamberlain. “It’d
be like breaking into a jewelry store; unless you know what’s valuable,
you wouldn’t know what to steal.”
More from Bloomberg.com
end quote from:
No comments:
Post a Comment