Oil Price Drop Halts Drilling in Eastern U.S.

Oil drilling in Pennsylvania, New York, Ohio and West Virginia has virtually stopped, and thousands of workers have lost their jobs because of the recent plunge in oil prices, industry analysts say.

“It hardly justifies going out to operate,” said Ray Stiglitz, 30, whose Allegheny Well Service Co. of Franklin, Penn., provides rig repairs, maintenance services and steel tubes at well sites.

In January, Pennsylvania-grade crude--the dark green, paraffin-based oil known for its lubricating qualities--sold for $26 a barrel. Now it goes for $13.50, the lowest price since 1978.

As a result, thousands of workers, from semiskilled laborers to surveyors, have been laid off, and drilling is on the decline.

Last week, 17 rotary drilling rigs were operating in the four states that produce Pennsylvania crude, compared to 49 a year ago, according to the Independent Petroleum Assn. of America.

The effects can be seen throughout the Appalachian oil fields, which are the oldest in the world:

- A third of West Virginia’s 6,000 oil industry workers have been laid off, said Stanley Pickens, chairman of that state’s Independent Oil and Gas Assn.

- Halliburton Services, which supplies cementing, water injection and other services at drilling sites, has laid off nearly 500 of 1,200 employees in its Pittsburgh division since the first of the year, spokesman Malcolm Rosser said. The division operates in eight states.

- Earlier this month, Pennzoil Exploration & Production Co., Pennsylvania’s biggest producer, announced the permanent termination of 26 jobs in its Bradford district, which covers western Pennsylvania and southern New York. The layoffs were the first in 25 years, district manager A. L. Richmond said.

- Quaker State Oil Refining Corp., another major producer, has offered early retirement benefits to employees older than 57, said Bernard Henderson, manager of public relations.

- Haddad & Brooks Inc., which operates wells in western Pennsylvania and northern West Virginia, has laid off half of its 55 employees in the past year, company President Richard Haddad said.