The US oil industry saw record volumes with fewer workers

While U.S. crude oil production tops record highs, upstream and oil services jobs are steady and have begun to decline, indicating that U.S. oil and gas producers are now “doing more with less” , as efficiency and automation in the shale zone increase. .

The oil and gas sector continues to support hundreds of thousands of upstream and service jobs and millions of associated jobs in the energy value chain and hospitality industry.

However, the post-pandemic rebound in oil and gas hiring — after the 2020 crash and thousands of layoffs — may have run its course.

The decline in employment is not because production is falling. In fact, it continues to grow, albeit at a slower rate. It’s because shale firms are now even more focused on efficiency and cost control so they can deliver higher shareholder returns amid mild production growth.

Efficiency and technological advances in fracking services, as well as ongoing consolidation in the industry, have pushed headcount down this year.

Certainly, the industry still employs many people directly and indirectly. Industry associations emphasize the importance of oil and gas’s contribution to the US economy and the number of jobs.

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For example, Midland, Texas, the unofficial capital of the largest shale oil producing area, the Permian, has the lowest unemployment rate in the state of Texas and lower than the average U.S. unemployment rate, according to Texas Workforce Commission data.

However, oil and gas industry groups note that the sector is now doing more with less, keeping production high with fewer resources.

The U.S. oilfield services sector lost 2,926 jobs in May, according to Bureau of Labor Statistics (BLS) data analyzed by the Energy Workforce & Technology Council.

“While we are beginning to see some signs of a flattening of the oil services labor market, we are also experiencing continued record U.S. oil and gas production,” Energy Workforce President Molly Determan said in June, commenting the decline. in hiring oil services.

“It is clear that we are doing more with less, maintaining high productivity and innovation with fewer resources,” added Determan.

The US Energy Information Administration (EIA) expects US crude oil production to average 13.2 million barrels per day (bpd) this year, up from an average of 12.9 million bpd last year. In 2025, U.S. crude oil production is set to accelerate to an average of 13.7 million bpd, according to EIA’s latest Short-Term Energy Outlook (STEO) released this week.

In addition, record Permian production and increased efficiency in the shale zone have led many US oil producers to raise their production guidance, which could boost US output above expectations for limited gains this year.

U.S. oil production will grow much more slowly than in the past two years, but drilling efficiency is increasing output even as the number of active rigs declines.

Amid rising production, the latest employment data from the Texas upstream sector indicates that exploration and production companies are increasing productivity and efficiency without necessarily increasing their workforce.

On a note of caution, the Texas Oil & Gas Association (TXOGA) said last month that data from the Texas Workforce Commission indicated a decline in the upstream oil and gas workforce in June, marking the 5th of 6 months in this calendar year in which the number of jobs fell. .

“Operational efficiencies are driving strong production with fewer rigs, which can translate into fewer industry jobs,” said TXOGA President Todd Staples.

“Oil and natural gas companies are clearly delivering more energy with greater efficiency and lower emissions than ever before.”

By Tsvetana Paraskova for Oilprice.com

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