For years, as oil and gas companies increased production, they hired many workers, enriching communities across the United States. This is no longer the case.
The country is pumping out more oil than ever before and near-record amounts of natural gas. But the companies that mine, transport and process these fossil fuels employ about 25 percent fewer workers than they did a decade earlier when they were extracting less fuel, according to a New York Times analysis of federal data.
Now, with some worried about a looming oil oversupply, producers are tightening their belts, with spending across North America expected to fall 3% 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 rose in recent days after President Biden announced new sanctions on Russia’s oil industry, but it’s unclear how those restrictions might affect commodity prices and U.S. producers in the long run.
The decline in American oil and gas jobs is reminiscent of the long decline of the U.S. coal industry, where employment peaked decades before production fell as mining companies extracted 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 gas. New technology allows them to oversee drilling, fracking and production from afar, with fewer people on site. And the bigger companies are snapping up smaller players, laying off accountants, engineers and other workers as they go.
While the overall number of jobs has increased since the darkest days of the pandemic, far fewer people are working in the industry than before Covid.
Among the cost-cutting techniques pursued by Exxon Mobil and Chevron: 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 work also reflects the ongoing shift to cleaner forms of energy, even if that shift is happening more slowly than many analysts expected a few years ago.
“You’re not going to see a lot of job growth just with the basic act of producing oil and gas,” Chris Wright, chief executive of oilfield services company Liberty Energy, said in an interview before Mr. Trump chooses him as head. the Department of Energy.
The industry, said Mr. Wright, “is now on a trend of steady to perhaps gradual decline in employment.”
Mr. Trump will “protect our energy jobs” while lowering costs for consumers, said Caroline Levitt, a 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 10 years, turbocharging the economies of places like North Dakota, home to the Bakken shale formation.
Then, in 2014, oil prices collapsed. It took a few years, but U.S. production eventually recovered, peaking at a record nearly 13.5 million barrels per day last fall. Employment has never fully recovered, however, entering a wave-like decline characterized 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 of the oil company that had hired his team to do field work walked into the crew’s mobile office in eastern New Mexico.
“Pump all your sand, pump all your chemicals, collect,” recalls Mr. Waguespack the man who told the group. “And get out of here.”
It wasn’t long before Mr. Waguespack, an engineer for the oilfield services company then known as Schlumberger, was unemployed. Like more than 100,000 other oil and gas workers who had lost their jobs as fuel demand dried up that year, he found himself asking, “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 turned to natural gas to power their fracking equipment, instead of diesel, and found that it was cleaner and faster.
Over-indebted companies didn’t make it, with more than 100 producers and service companies seeking bankruptcy protection in 2020, according to law firm Haynes Boone.
By the end of 2024, the number of rigs operating in the United States had fallen by about 28% in five years, according to federal data. And still production went up.
“We’re getting three times more wells out of a rig today than we did in 2018 or 2019,” Bart Cahir, who heads Exxon’s shale division, said in an interview last year. “Per capita, we produce much more.”
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 companies and individuals and communities that stand to lose.”
One consequence of the industry’s drive to yield is that oil and gas companies, known for good payouts, no longer command 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 its way back to oil in 2021, more than a year after the layoff. But by then, the day rates and other incentives that had made his work in the Permian Basin so lucrative had all but disappeared. Without them, said Mr. Waguespack, his annual salary shrunk to about $105,000, from about $130,000 in 2019, according to what he could make working in an office or factory in his native Louisiana.
“I started looking for other jobs, trying to get away from the oil field,” said the 30-year-old Mr. Waguespack.
With the post-Covid economy doing well and unemployment below 4% nationally for more than two years starting in early 2022, he and workers like Cody Owlett, who spent a decade traversing pressure washing equipment in Pennsylvania , such as drilling rigs, had other options.
The work of Mr. Owlett was paid well for where he lived near the northern tip of the state: about $35 an hour, with more than 60 hours of overtime some weeks. But all the time he spent on the road meant he missed holidays and was rarely able to pick up his boys from school.
“I’m tired of missing everything with them,” said the 34-year-old Mr. Owlett.
When he realized in 2023 that he could earn a similar income by buying discounted merchandise and reselling it on eBay, Mr. Owlett abandoned the gas field.
Jobs like the one Mr. Owlett is among the most cyclical, rising and falling with oil and gas prices. These service positions represent the bulk of work that has returned since the pandemic.
Refining — the process of turning crude oil into gasoline, diesel and other fuels — has seen more job losses. Although oil demand is rising worldwide, many believe that the appetite for gasoline in the United States and elsewhere has already peaked, and companies are closing fuel facilities.
Other job losses followed mergers and acquisitions. After acquiring a pipeline company, Pittsburgh-based 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 the recent takeover of Marathon Oil by oil producer ConocoPhillips, according to state records.
At the same time, the big oil companies are staffing in countries where wages are lower.
Five to 10 years ago, Western oil and gas companies turned to places like India’s tech hub Bangalore to fill roles in information technology, human resources and supply chain management, said Timothy Haskell, who leads EY’s energy industry consulting practice in the United States. Today, they attract engineers and other technical professionals who form the backbone of the industry.
“While the labor force may be shrinking in the US, in some cases it’s growing a lot in other parts of the world,” said Mr. Haskell.
Last year, Chevron said it was opening an engineering and technology outpost in India, a $1 billion venture 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,” Mike Wirth, Chevron’s chief executive, told Bloomberg in November. More than half of Chevron’s employees are based in the United States, and that ratio has been stable since at least 2014, a company spokesman said, describing the oil producer as “a proud American company.”
Exxon had a growing presence in Bangalore. The range of work done by workers there has expanded over time from smaller, more mundane tasks to more important tasks. Engineers and geoscientists in the southern Indian city worked on some of the company’s flagship projects, including those off Guyana and the United States, three former employees said.
Exxon declined to comment on its India operations.
Mr. Waguespack finally landed the job he was looking for in Louisiana. In his new role as an engineer at an industrial gas supplier, he performs various projects such as replacing old equipment at facilities around the Gulf Coast.
He’s doing slightly more than he did during his second stint in oil. And instead of commuting from Louisiana to West Texas for weeks at a time, he lives five minutes from the office.
“To this day, I still wonder what could have happened if I had stayed,” said Mr. Waguespack. “But I think I have a good thing now.”
Ben Casselman contributed to the report.
