For years, as oil and gas companies increased production, they hired many workers, enriching communities across the United States. That is no longer true.
The country is pumping more oil than ever and near record amounts of gas. But the companies that extract, transport and process these fossil fuels employ about 25 percent fewer workers than a decade earlier, when they produced less fuel, according to a New York Times analysis of federal data.
Now, while some are worried about a looming oil glut, producers are tightening their belts, with spending in North America expected to fall 3 percent this year, according to Barclays. That raises the specter of more 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 the Russian oil industry, but it is unclear how those restrictions may affect commodity prices and U.S. producers in the long term.
The decline in U.S. oil and gas jobs recalls 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 after the shale boom, companies are drilling wells that extend deeper into the earth, releasing more oil and natural gas. New technology allows them to monitor drilling, fracking and production from afar, with fewer people on site. And larger companies are picking up smaller players, shedding accountants, engineers and other workers as they go.
While the total number of jobs has increased since the darkest days of the pandemic, there are far fewer people working in the industry than before Covid.
Among the cost-cutting techniques Exxon Mobil and Chevron are pursuing: 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 work also reflects the continuing transition toward cleaner forms of energy, even if that shift is happening more slowly than many analysts had anticipated a few years ago.
“You're not going to see a lot of job growth just from the basic act of producing oil and natural gas,” Chris Wright, chief executive of oilfield services company Liberty Energy, said in an interview before Trump tapped him to lead the Department of Transportation. Energy.
The industry, Wright said, is “now on a trend of stagnant or perhaps gradually declining employment.”
Trump will “protect our energy jobs” while reducing costs for consumers, said Karoline Leavitt, a spokeswoman for the president-elect's transition team.
During the first half of the U.S. fracking boom, oil and gas companies added workers at a much faster rate than other industries. The industry almost doubled in size in 10 years, boost the economies of places like North Dakotahome of the Bakken shale formation.
Then, in 2014, oil prices plummeted. It took a couple of years, but U.S. production finally recovered and hit a record of nearly 13.5 million barrels per day last fall. However, employment never fully recovered and entered an undulating decline marked by booms and busts, most recently during the pandemic, when oil prices briefly fell below zero.
Matthew Waguespack was fracking a well in early 2020 when a representative from the oil company that had hired his team to do field work walked into the team's mobile office in eastern New Mexico.
“Pump out all your sand, pump out all your chemicals, pack it out,” Waguespack recalled the man telling the team. “And get out of here.”
It wasn't long before Waguespack, an engineer at the oilfield services company then known as Schlumberger, was out of a job. Like more than 100,000 other oil and gas workers who had lost their jobs when fuel demand dried up that year, he asked himself, “What do I do next?”
While Waguespack looked for work, oil and gas companies cut budgets and did everything they could to survive. They drilled larger and larger wells and installed sensors and other technologies that enabled more remote work. Many turned to natural gas to power fracking equipment, rather than diesel, and found it to be cleaner and faster.
Heavily indebted companies failed to do so, and more than 100 producers and service companies sought bankruptcy protection in 2020, according to law firm Haynes Boone.
By the end of 2024, the number of operating drilling rigs in the United States had fallen about 28 percent over five years, federal data show. And yet production increased.
“We are getting three times as many wells from a platform today as we were in 2018 or 2019,” Bart Cahir, who heads Exxon's shale division, said in an interview last year. “Per person, we are producing 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, individuals and communities that stand to lose.”
One consequence of the industry's efficiency drive is that oil and gas companies, known for paying well, no longer offer such a high 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.
Waguespack found his way back to the oilpatch in 2021, more than a year after being laid off. 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, Waguespack said, his annual salary dropped to about $105,000, from about $130,000 in 2019, in line with what he could earn working in an office or plant in Louisiana.
“I started looking for other jobs, trying to get away from the oil field,” said Waguespack, 30.
With the post-Covid economy doing well and unemployment below 4 percent nationally for more than two years starting in early 2022, he and workers like Cody Owlett, who spent a decade touring pressure washing equipment in Pennsylvania, like drilling rigs, had other options.
Owlett's job paid well 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 she spent traveling meant she missed vacations and was rarely able to pick up her children from school.
“I was tired of missing out on everything with them,” Owlett, 34, said.
When he realized in 2023 that he could make a similar income by buying discounted products and reselling them on eBay, Owlett left the gas field.
Jobs like the one Owlett had held are among the most cyclical, rising and falling with oil and gas prices. Those service jobs represent the majority of the work that has recovered after the pandemic.
Refining (the process of converting crude oil into gasoline, diesel and other fuels) has seen more sustained job losses. Even as demand for oil is rising globally, many believe the appetite for gasoline in the United States and elsewhere has already peaked, and companies are closing fuel production facilities.
Other job losses have followed 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, Big Oil has been hiring in countries where wages are lower.
Five to 10 years ago, Western oil and gas companies looked to places like India's tech hub of Bangalore for positions in information technology, human resources and supply chain management, said Timothy Haskell, who leads EY's people consulting practice for the energy industry in the United States. Today, they are hiring engineers and other technical professionals who form the backbone of the industry.
“While the workforce may be shrinking in the United States, in some cases it is growing a lot in other parts of the world,” Haskell said.
Last year, Chevron said it was opening 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,” said 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 proportion has remained stable since at least 2014, a company spokesperson said, describing the oil producer as “a proud American company.”
Exxon has had a growing presence in Bengaluru. The scope of work employees perform there has expanded over time from smaller, more routine tasks to more important jobs. 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 India operations.
Waguespack finally got the job he was looking for in Louisiana. In his new engineering position at an industrial gas supplier, he leads several projects, such as replacing obsolete equipment at facilities around the Gulf Coast.
He earns a little more than during his second period in the oil patch. And instead of traveling 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,” Waguespack said. “But I think I have something good to do now.”
Ben Casselman contributed reports.
