As oil and gas companies increased production, they hired many workers for years, enriching communities across the United States. That is no longer true.
The country is pumping more oil than ever and almost record amounts of gas. But the companies that extract, transport and process these fossil fuels employ roughly 25 percent fewer workers than they did a decade earlier, when they produced less fuel, according to a New York Times analysis of federal data.
Now that some are concerned about a looming oversupply of oil, producers are tightening their belts. Spending in North America is expected to fall 3 percent this year, according to Barclays. That raises the specter 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 announced new sanctions on Russia's oil industry, but it is not clear how these restrictions could affect commodity prices and U.S. producers in the long term.
The thinning of U.S. oil and gas jobs is reminiscent of the long decline of the U.S. coal industry, where employment peaked for decades before production fell as mining companies extracted more rock with fewer people.
Twenty years after the shale boom, companies are drilling wells that reach deeper into the earth, unlocking more oil and natural gas. New technology allows them to monitor drilling, fracking and production remotely, with fewer people on site. And larger companies are conquering smaller players, shedding accountants, engineers and other workers.
Although the overall number of jobs has increased since the bleakest days of the pandemic, far fewer people are working in the sector than before Covid.
One of the cost-saving techniques Exxon Mobil and Chevron are pursuing is hiring engineers and geologists in India, where labor is cheaper, to support operations in the United States and elsewhere.
The decline in oil and gas activity also reflects the ongoing transition to cleaner forms of energy, even if that shift is slower than many analysts expected a few years ago.
“You're not going to see a lot of job growth in just the basic act of producing oil and natural gas,” Chris Wright, CEO of the oilfield services company Liberty Energy, said in an interview before Mr. Trump asked him to lead. the Energy Department.
The sector, Mr Wright said, “is now in a trend of flat to perhaps gradually declining employment.”
Trump will “protect our energy jobs” while lowering costs for consumers, said Karoline Leavitt, spokeswoman for the president-elect's transition team.
During the first half of the US fracking boom, oil and gas companies added workers at a much faster rate than other industries. The industry has nearly doubled in size in a decade, boosting the economies of places like North Dakota, home to the Bakken shale formation.
Then the oil price collapsed in 2014. It took a few years, but U.S. production eventually recovered, rising to a record of nearly 13.5 million barrels per day last fall. However, employment never fully recovered and entered a wave of decline punctuated by booms and busts, most recently during the pandemic, when oil prices briefly fell below zero.
Matthew Waguespack was drilling a well in early 2020 when a representative from the oil company his team had hired to do field work walked into the crew's mobile office in eastern New Mexico.
“Pump all your sand, pump all your chemicals, pack in,” Mr. Waguespack recalled the man telling the team. “And go away.”
It wasn't long before Mr. Waguespack, an engineer at the oilfield services company then known as Schlumberger, was out of work. Like more than 100,000 other oil and gas workers who had lost their jobs when fuel demand dried up that year, he wondered, “What do I do now?”
While Mr. Waguespack looked for work, oil and gas companies cut budgets and did what they could to survive. They drilled larger and larger wells and installed sensors and other technology that made remote work possible. Many switched to natural gas to power fracking equipment, instead of diesel, and found it was cleaner and faster.
Highly indebted companies did not survive: according to law firm Haynes Boone, more than a hundred manufacturers and service companies filed for bankruptcy protection in 2020.
By the end of 2024, the number of oil rigs in the United States had fallen about 28 percent in five years, federal data show. And yet production increased.
“We're getting three times as many wells from a drilling rig today as we did in 2018 or 2019,” Bart Cahir, who heads Exxon's shale division, said in an interview last year. “We produce much more per person.”
That the oil and gas industry has become more productive is good news for the economy, which benefits when people can do more with less, said Jesse Thompson, an economist at the Federal Reserve Bank of Dallas.
“But in the meantime,” he added, “there are businesses, individuals and communities that stand to lose.”
One consequence of the industry's drive for efficiency is that oil and gas companies, known for paying well, no longer offer as much of a premium over other industries. Before the pandemic, average wages in oil and gas production were more than 60 percent higher than those in manufacturing, construction and other related industries, federal data show. By last fall, that premium had dropped to just over 30 percent.
Mr. Waguespack found his way back to the oil patch in 2021, more than a year after he was laid off. But by then, the day rates and other incentives that had made his job in the Permian Basin so lucrative had all but disappeared. Without them, Mr. Waguespack said, his annual salary fell to about $105,000 from about $130,000 in 2019, in line with what he could earn if he worked in an office or factory at home in Louisiana.
“I started looking for other jobs, trying to get away from the oil field,” said Mr. Waguespack, 30.
With the post-Covid economy doing well and unemployment having been below 4 percent for more than two years as of early 2022, he and workers like Cody Owlett, who spent a decade crisscrossing Pennsylvania's pressure-cleaning equipment like oil rigs searched, other options.
Mr. Owlett's job paid well for where he lived on the northern edge of the state: about $35 an hour, with more than 60 hours of overtime some weeks. But all the time spent on the road meant he missed holidays and was rarely able to pick up his boys from school.
“I was tired of missing everything with them,” said Mr Owlett, 34.
Realizing in 2023 that he could make a similar income by buying discounted merchandise and reselling it on eBay, Mr. Owlett left the gas field.
Jobs like Mr. Owlett's are among the most cyclical, with oil and gas prices rising and falling. These service positions are responsible for most of the work that has returned after the pandemic.
Refining – the process by which crude oil is converted into gasoline, diesel and other fuels – is experiencing longer-term job losses. Even as global oil demand rises, many believe gasoline demand in the United States and elsewhere has already peaked and companies are closing their fuel production facilities.
Other job losses are the result of mergers and acquisitions. After acquiring a pipeline company, Pittsburgh-based natural gas driller EQT said last fall it had cut its workforce by 15 percent. In Texas, about 500 people lost their jobs as part of the recent takeover of Marathon Oil by oil producer ConocoPhillips, state data show.
At the same time, oil companies have expanded their workforces in countries where salaries are lower.
Five to 10 years ago, Western oil and gas companies turned to places like India's tech hub Bengaluru to fill information technology, human resources and supply chain management roles, says Timothy Haskell, who heads EY's energy people consulting practice industry in the United States. United States. Today, they bring in engineers and other technical professionals who form the backbone of the industry.
“While the U.S. workforce may be shrinking, in some cases it is growing strongly in other parts of the world,” Mr. Haskell said.
Last year, Chevron said it would open an engineering and technology outpost in India, a $1 billion venture that Chevron has described as part of a broader cost-cutting effort.
“We're going to change where and how we do some of our work,” Chevron CEO Mike Wirth told Bloomberg in November. More than half of Chevron's employees are based in the United States, and that ratio has been steady since at least 2014, said a company spokesperson, describing the oil producer as “a proud American company.”
Exxon has a growing presence in Bengaluru. The scope of work that workers do there has expanded over time from smaller, more routine tasks to more important ones. Engineers and geoscientists in the southern Indian city have worked on some of the company's flagship projects, including those off the coast of Guyana and in the United States, three former employees said.
Exxon declined to comment on its Indian operations.
Mr. Waguespack eventually got the job he was looking for in Louisiana. In his new technical role at an industrial gas supplier, he is leading several projects, including replacing aging equipment at facilities around the Gulf Coast.
He makes a little more than he did during his second stint in the oil patch. And instead of commuting from Louisiana to West Texas for weeks, he lives five minutes from his office.
“To this day I still wonder what could have happened if I had stayed,” Mr Waguespack said. “But I think I have something good going on now.”
Ben Casselman reporting contributed.
