For years, as oil and gas companies increased production, they hired more workers and enriched communities across the United States. That’s no longer true.
The country is pumping more oil than ever before and near-record amounts of gas. But companies that extract, transport and process these fossil fuels are hiring fewer workers than they were a decade ago, when fuel production was down, according to a New York Times analysis of federal data. has decreased by approximately 25%.
Spending across North America is expected to fall by 3% this year as producers tighten, partly due to concerns about an impending oil glut, according to Barclays. Despite President-elect Donald J. Trump’s call for companies to “drill, baby, drill,” fears of further job losses are growing.
Oil prices have risen in recent days after President Biden announced new sanctions on the Russian oil industry, but how will these restrictions affect commodity prices and U.S. producers in the long term? It is not clear whether
The decline in U.S. oil and gas jobs reflects a long decline in the U.S. coal industry, where employment peaked decades before production declined as mining companies mined more rock with fewer people. It’s reminiscent of.
Two decades into the shale boom, companies are drilling wells deeper into the earth to extract more oil and gas. New technology reduces the number of people on site and allows drilling, hydraulic fracturing, and production to be overseen from remote locations. And large companies are buying up small and medium-sized companies and eliminating accountants, engineers, and other employees.
Although the total number of jobs has increased since the darkest days of the pandemic, there are far fewer people working in the industry than before the pandemic.
Cost-cutting measures being pursued by Exxon Mobil and Chevron include hiring engineers and geologists in India, where labor costs are lower, to support operations in the United States and elsewhere.
The decline in oil and gas jobs also reflects the continued transition to cleaner forms of energy, even if that transition is happening more slowly than many analysts expected a few years ago. I am doing it.
“The basic act of producing oil and natural gas alone is a huge job loss,” Chris Wright, CEO of oil field services company Liberty Energy, said in an interview before Trump nominated him to lead. We haven’t seen any increase.” Department of Energy.
Wright said the industry is “currently trending toward flat to gradual decline in employment.”
Caroline Levitt, a spokeswoman for the president-elect’s transition team, said Trump will “protect energy jobs” while lowering costs for consumers.
During the first half of America’s fracking boom, oil and gas companies added workers at a much faster pace than other industries. The industry has nearly doubled in size in 10 years; Boosting the economies of regions like North Dakotahome of the Bakken Shale Formation.
Then in 2014, oil prices collapsed. It took several years, but U.S. production eventually recovered, surging to a record of about 13.5 million barrels per day last fall. But employment never fully recovered, entering into waves of decline punctuated by booms and busts, most recently when oil prices briefly fell below zero during the pandemic.
In early 2020, Matthew Wagspack was hydraulically fracturing an oil well when representatives from the oil company that hired his team for field work arrived at the crew’s mobile office in eastern New Mexico. came into.
“Pump all the sand, pump all the chemicals, and pack up,” Wagspack recalled the man telling his team. “And get out of here.”
It didn’t take long for Mr. Wagspack, an engineer for the oil field services company then known as Schlumberger, to lose his job. Like the more than 100,000 other oil and gas workers who lost their jobs that year as fuel demand dried up, he found himself wondering, “What next?” Ta.
While Mr. Wagspack looked for work, oil and gas companies cut budgets and did whatever they could to survive. They drilled even bigger wells and installed sensors and other technology that will enable more remote work. Many people have turned to natural gas rather than diesel to power their hydraulic fracturing equipment, finding it to be cleaner and faster.
According to law firm Haynes Boone, more than 100 manufacturing and service companies sought bankruptcy protection in 2020, as companies with large debts cannot survive.
By the end of 2024, the number of operating drilling rigs in the United States has fallen by about 28% over five years, according to federal data. Still, production increased.
“Rigs are producing three times as much oil today as they were in 2018 or 2019,” Bart Kjaer, head of Exxon’s shale division, said in an interview last year. “We are producing even more per person.”
Jesse Thompson, an economist at the Federal Reserve Bank of Dallas, said the rising productivity of the oil and gas industry is good news for the economy and will benefit from people being able to do more with less. said.
“But in the meantime, there are businesses, individuals and communities who may suffer losses,” he added.
One result of the industry’s efficiency drive is that oil and gas companies, known for their high revenues, no longer offer such high premiums compared to other industries. Before the pandemic, average wages in oil and gas production were more than 60% higher than average wages in manufacturing, construction and other related industries, according to federal data. By last fall, that premium had shrunk to just over 30%.
Wagspack returned to the oilfield in 2021, more than a year after being fired. But by then, the daily wages and other incentives that had made his work in the Permian Basin so lucrative had all but disappeared. Without them, his annual salary would have dropped from about $130,000 in 2019 to about $105,000, Wagspack said. This is in line with the income earned working in home offices and factories in Louisiana.
“I started looking for other jobs to get away from the oil fields,” Wagspack, 30, said.
With the post-COVID-19 economy strong and the national unemployment rate below 4% for more than two years starting in early 2022, he and other workers at Pennsylvania’s pressure-washing equipment sites, including drilling rigs, have been working for 10 years. Workers like Cody Ouellette, who spent over $500,000, had other options.
Mr. Ouellette’s job paid well for where he lived near the northern tip of the state, earning about $35 an hour and some weeks with more than 60 hours of overtime. But all the time he spent on the road meant he missed holidays and barely got to pick up his sons from school.
Ouellette, 34, said she was “tired of missing everything about them.”
In 2023, Ouellette quit the gas field when he realized he could make a similar income by buying discounted products and reselling them on eBay.
Jobs like Ouellette’s are among the most cyclical, rising and falling depending on oil and gas prices. These service jobs account for most of the jobs that have returned since the pandemic.
Refining, the process of turning crude oil into gasoline, diesel, and other fuels, has caused further continued job losses. Despite rising global demand for oil, many believe gasoline demand in places like the United States has already peaked and companies are closing fuel production facilities.
There are also job losses associated with mergers and acquisitions. Pittsburgh-based natural gas drilling company EQT announced last fall that it would cut its workforce by 15% after acquiring a pipeline company. About 500 people lost their jobs in Texas as part of oil producer ConocoPhillips’ recent acquisition of Marathon Oil, according to state records.
At the same time, oil majors are adding staff in countries where salaries are lower.
Timothy Haskell, head of EY’s energy industry talent consulting practice, says that five to 10 years ago, Western oil and gas companies moved to Bangalore, India’s technology hub, to fill information technology, talent and supply chain management roles. He said he has set his sights on places like Le. US. Now, they are discovering the engineers and other technical experts who make up the backbone of the industry.
“While the U.S. workforce may be shrinking, in some cases it’s growing significantly in other parts of the world,” Haskell said.
Chevron announced last year that it would open an engineering and technology outpost in India, a $1 billion undertaking that Chevron described as part of a broader cost-cutting effort.
“We’re going to change where and how some of our work is done,” Chevron CEO Mike Wirth said. told Bloomberg in November.. More than half of Chevron’s employees are based in the United States, a percentage that has remained stable since at least 2014, a company spokesperson said, describing the company as a “proud American company.”
Exxon is increasing its presence in Bangalore. Over time, the scope of work performed by employees has expanded from smaller, mundane tasks to more important tasks. Engineers and geoscientists from the southern Indian city have worked on some of the company’s flagship projects, including projects off Guyana and in the United States, three former employees said.
Exxon declined to comment on its India operations.
Mr. Wagspack eventually found the job he was looking for in Louisiana. In my new engineering role at an industrial gas distribution company, I’m executing a variety of projects, including replacing aging equipment at facilities around the Gulf Coast.
He earns slightly more than he did in his second stint in the oil patch. And instead of commuting from Louisiana to West Texas for weeks at a time, I live five minutes from the office.
“I still wonder what would have happened if I had stayed,” Wagspack said. “But I think good things are happening now.”
Ben Casselman Contributed to the report.
