U.S. Oil and Gas Jobs Plummet Despite Record Production
by Felicity Bradstock
OilPrice.com
January 16, 2025
During the Covid-19 pandemic, when oil prices fell to a record low, millions of oil and gas jobs were cut worldwide. This was owing to a decrease in oil and gas operations due to work and movement restrictions, as well as many companies going bankrupt. During this time, several oil and gas companies sought to automate operations by investing heavily in artificial intelligence (AI), robotics, and other digitalisation efforts. As oil and gas operations have become more automated in the past half a decade, oil companies are finding they can produce more oil with fewer workers, as oil and gas jobs continue to fall into decline even in the face of rising production.
Last year it was reported that while the U.S. was breaking records for its high crude output, employment figures fell during five of the first six months of 2024 due to improved operational efficiencies. U.S. oil companies now need fewer rigs and workers to pump the same amount of oil as before the pandemic when employment figures were much higher. In June last year, the Texas Workforce Commission said that the number of jobs had fallen by 2,000 compared to May. Meanwhile, Baker Hughes stated that the U.S. rig count decreased by about 14 percent between June 2023 and June 2024.
Industry experts worry that this trend will continue as oil and gas companies across the U.S. invest heavily in digitalisation and automation. Greater advances in AI, machine learning, robotics, and other innovative technologies are expected to help boost efficiency in the sector and reduce the need for workers in certain roles. Hundreds of thousands of workers are still employed in oil and gas in the U.S. but most companies are not creating any new jobs and are reducing the number of employees in their operations. In 2014, it took over 600,000 workers to produce oil and gas in the U.S. By August of last year, this figure had fallen to around 380,000, while oil companies were producing around 45 percent more gas and 47 percent more crude.
Patrick Jankowski, the senior vice president for research at the business group Greater Houston Partnership, stated, “In the first boom, the oil and gas industry over-hired and overpaid.” Jankowski explained, now companies “have rigs that get up and walk.” Before, workers had to disassemble and reassemble rigs each time they moved, now “you just press a button.” This has led companies to cut some of the positions that oil and gas workers once filled.
In addition to improving efficiency and automation, some companies are now outsourcing jobs. For example, Exxon Mobil and Chevron are just two of the companies to hire engineers and geologists in India because of the cheaper labour available. These employees are able to work on projects remotely at a lower cost.
According to a New York Times analysis of federal data, companies that extract, transport, and process oil and gas employ around 25 percent fewer workers than they did around a decade ago when they produced less. With an oil glut expected in 2025, producers are cutting costs, with spending expected to decline by around 3 percent in North America this year, which will likely mean more job cuts.
This trend has previously been seen in the coal industry, with several regions of the U.S. falling into an economic depression as thousands of workers in coal-rich regions lost their jobs. While the number of jobs in the renewable energy sector is continuing to grow year on year, an employment rebound in the oil and gas sector seems unlikely.
Chris Wright, the CEO of oil field services company Liberty Energy and expected head of the Energy Department under President-elect Donald Trump, stated, “You won’t see a lot of job growth in just the basic act of producing oil and natural gas.” Wright added that the industry is “on a trend now of flat to maybe gradually declining employment.”
Another concern for oil and gas workers is the decrease in pay and benefits. As fossil fuel companies look to boost efficiency, many firms are no longer paying employees as well as they once were. Average pay before the pandemic stood at around 60 percent more than that of jobs in manufacturing, construction and other related industries. By late 2024, this figure declined to just over 30 percent.
Despite the sharp rise in U.S. oil and gas production in the post-pandemic period, the number of jobs in the sector has fallen significantly, a trend that is set to continue. Greater automation and efficiency, the outsourcing of labour, and cost-cutting have led to a sharp decline in oil and gas jobs, as well as a wage reduction across the industry.
