Over the years, as oil and gas companies increased production, they hired many workers, enriching communities across the United States. This is no longer true.
The country is pumping out record amounts of oil and gas more than ever before. But according to a New York Times analysis of federal data, companies that extract, transport and process these fossil fuels employ about 25 percent fewer workers than they did a decade ago, when They were running low on fuel.
Now, with some concerned about rising oil supplies, producers are tightening their belts, with spending across North America expected to fall 3 percent this year, according to Barclays. That raises fears of further job losses, even as President-elect Donald J. Trump urges companies to “drill, baby, drill.”
Oil prices have risen in recent days after President Biden. New sanctions on Russia’s oil industry have been announced.but it is unclear how the sanctions will affect commodity prices and U.S. producers in the long run.
The thinning of U.S. oil and gas jobs is reminiscent of the long decline of the U.S. coal industry, where employment fell decades before production declined as mining companies dug out more rock with fewer people.
Two decades into the shale boom, companies are drilling wells that extend deeper into the earth, unlocking more oil and natural gas. New technology is letting them monitor drilling, fracking and production remotely, with fewer people on site. And big companies are snapping up smaller players, leaving behind accountants, engineers and other workers.
Although the total number of jobs has increased since the darkest days of the pandemic, fewer people are working in the industry than before Covid.
Among the cost-cutting techniques used by Exxon Mobil and Chevron: hiring engineers and geologists in India, where labor is cheaper, to support activities in the United States and elsewhere.
The decline in oil and gas activity also reflects a continuing shift toward cleaner forms of energy, even if the shift is happening more slowly than many analysts predicted a few years ago.
“You’re not going to see a lot of job growth just in the core process of oil and natural gas production,” Chris Wright, chief executive of oilfield services company Liberty Energy, said in an interview before Mr. Trump was tapped to lead. ” Department of Energy
Mr. Wright said the industry “is on a flat trend right now and probably a gradual decline in employment.”
Carolyn Levitt, a spokeswoman for the president-elect’s transition team, said Mr. Trump would “protect our energy jobs” while lowering costs for consumers.
During the first half of the U.S. fracking boom, oil and gas companies added workers at a faster clip than other industries. The industry nearly doubled in 10 years. Turbocharging the economies of places like North Dakotahome of the Beacon Shale Formation.
Then in 2014, oil prices fell. It took a few years, but U.S. production eventually bounced back, reaching a record of nearly 13.5 million barrels a day last fall. Employment has never fully recovered, though, entering an unprecedented recession due to booms and busts, most recently during the pandemic, when oil prices briefly fell below zero.
Matthew Wagespeak was drilling a well in early 2020 when a representative from the oil company that had hired his team to do fieldwork walked into the crew’s mobile office in eastern New Mexico.
“Pump all your sand, pump all your chemicals, pack,” Mr. Wagespack recalled the man telling the team. “And get out of here.”
It wasn’t long before Mr. Wagospec, an engineer at the oilfield services company then known as Schlumberger, was out of a job. Like the more than 100,000 oil and gas workers who lost their jobs this year due to falling fuel demand, he found himself wondering: “What do I do next?”
While Mr. Waguespack was looking for work, oil and gas companies cut budgets and did what they could to survive. They drilled ever-larger wells and installed sensors and other technology that enabled more remote work. Many have turned to natural gas-powered fracking equipment instead of diesel and found it to be cleaner and faster.
Not many heavily indebted companies made it, with more than 100 producers and service firms seeking bankruptcy protection in 2020, according to law firm Hans Bohn.
By the end of 2024, the number of drilling rigs operating in the United States had fallen by about 28 percent over five years, federal data show. And yet production increased.
“We found three times more wells per rig today than we did in 2018 or 2019,” Bart Kahr, who leads Exxon’s shale division, said in an interview last year. “Per capita, we’re producing a lot more.”
Jesse Thompson, an economist at the Federal Reserve Bank of Dallas, said the oil and gas industry becoming more productive is good news for the economy, which benefits when people are able to do more with less.
“But in the meantime,” he added, “there are firms and individuals and communities that stand to lose.”
One result of the industry’s performance is that oil and gas companies, known for paying well, are no longer offering premiums as high as other industries. Before the pandemic, average wages in oil and gas production were 60 percent higher than in manufacturing, construction and other related industries, federal data show. By last fall, that premium had dropped to a little over 30 percent.
Mr Waguespack found his way back to the oil patch in 2021, more than a year after leaving the job. But by then, the day rates and other perks that had made his job in the Permian Basin so lucrative had all but disappeared. Without them, Mr. Waguespack said, his annual salary would drop from about $130,000 in 2019 to about $105,000, which he could do in an office or plant back home in Louisiana.
“I started looking for other jobs, trying to get away from the oil field,” said Mr. Wagspack, 30.
With the post-Covid economy performing well and unemployment below 4 percent nationally for more than two years starting in early 2022, activists like him and Cody Olette, who has spent a decade in Pennsylvania With pressure washing equipment such as spent in drilling rigs, they had other options.
Mr. Oulette’s job paid well where he lived near the state’s northern edge: about $35 an hour, with more than 60 hours of overtime some weeks. But the amount of time he spent on the road meant he missed holidays and could rarely pick up his boys from school.
“I was tired of losing everything with them,” said Mr Oulette, 34.
When he realized in 2023 that he could make the same income by buying discounted merchandise and reselling it on eBay, Mr. Olette left the gas field.
Jobs like Mr. Oulette’s are highly cyclical, rising and falling with oil and gas prices. These service positions 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 experienced more permanent job losses. Even as global demand for oil continues to grow, many believe gasoline hunger is already peaking in the U.S. and elsewhere, and companies are closing fuel facilities.
Other job losses have occurred following mergers and acquisitions. After acquiring a pipeline company, Pittsburgh-based natural gas driller EQT said last fall it was cutting its workforce by 15 percent. In Texas, about 500 people lost their jobs as part of oil producer ConocoPhillips’ recent acquisition of Marathon Oil, state records show.
At the same time, major oil companies are operating in countries where wages are low.
Five to 10 years ago, Western oil and gas companies turned to places like India’s tech hub Bengaluru to fill roles in information technology, human resources and supply chain management, said Timothy Haskell, EY’s energy industry director. Lead a people counseling practice. In the United States today, they are looking for engineers and other technical professionals who form the backbone of the industry.
Mr. Haskell said that while the labor force in the United States is shrinking, in some cases it is growing much faster in other parts of the world.
Last year, Chevron said it was opening an engineering and technology outpost in India, a $1 billion project that Chevron described as part of a broader cost-cutting effort.
“We’re going to change where and how we do some of our work,” said Mike Worth, Chevron’s chief executive. told Bloomberg in November. More than half of Chevron’s employees live in the United States, and that proportion has been stable since at least 2014, with a company spokesman describing the oil producer as “a proud American company.”
Exxon has a growing presence in Bengaluru. The scope of work that employees do there has expanded over time from smaller, more routine tasks to more important tasks. Engineers and geologists in the southern Indian city have worked on some of the company’s most important projects, including off the coast of Guyana and in the United States, three former employees said.
Exxon declined to comment on its Indian operations.
Mr. Waguespack finally got the job he was looking for in Louisiana. In his new engineering role, at an industrial gas supplier, he runs projects as diverse as replacing aging equipment at facilities around the Gulf Coast.
He makes a little more than that during his second stint in the oil patch. And instead of commuting from Louisiana to West Texas for weeks at a time, he lives five minutes from the office.
“I still wonder to this day what could have happened if I had stayed,” Mr Wagespack said. “But I think I have a good thing going now.”
Ben Castleman Cooperation reporting.