External/Industry Analysis: Workforce Housing in the Oil and Gas Industry

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INDUSTRY ANALYSIS 1 External/Industry Analysis: Workforce Housing in the Oil and Gas Industry Steve McKeon Westminster College INDUSTRY ANALYSIS 2 Introduction The external analysis is designed to help companies identify specific trends and events that may have an impact on their business. This concept is not difficult to understand, but many companies have fallen victim to their own complacency. This is why the external analysis is so important and must be evaluated on a regular basis. When performing an external analysis it is best to focus in on a target industry to ensure that only relevant information is analyzed. The industry we are analyzing for this purpose is the workforce housing sector of the oil and gas…show more content…
“In recent weeks, Williams County, where thousands of previously approved camp beds have yet to be built, and Mountrail County, where one-third of the population is living in temporary housing, imposed moratoriums on man camp development” (Sulzberger, 2011, p. 12). Local city and county officials are looking for alternative solutions to help ease the burden on the locals. There is a lot of work to do in the boom towns and because drilling permits are increasingly being approved, the workload will continue to increase. In a recent report “which was prepared by the Center for Community and Business Research at UTSA, noted that the first well targeting the Eagle Ford was drilled in 2009 when only 13 drilling permits were issued (NGW Oct.27 '08). Since then, the number of permits has risen to 3,823 last year, up from 1,266 in 2010” (Shafer, 2012). That is an increase of over 2,500 well permits. If one well requires over 100 workers, then over 25,000 workers will need temporary housing in West Texas where Eagle Ford oil is located. Economic The fact that demand is so high and supply is so low justifies increasing rent prices. “In Estevan, Sask., just over the border, you can 't find a one-bedroom apartment for less than $1,200 a month, says Mayor Gary St. Onge, a price that would have been unheard of even three years INDUSTRY ANALYSIS ago” (Warnica, 2012). The fact that wages in the industry are high means workers have the 5 ability to pay higher
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