For years, as oil and gas companies increased production, they employed many workers, enriching communities across the United States. This is no longer true.
The country is pumping more oil than ever and a near-record amount of gas. But the companies that extract, transport and process these fossil fuels employ roughly 25 percent fewer workers than they did a decade ago when they were producing less fuel, according to a New York Times analysis of federal data.
Now, with some worried about a looming oil glut, producers are tightening their belts, with spending across North America 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, heart, drill.”
Oil prices have risen in recent days after President Biden announced new sanctions on Russia’s oil industry, but it’s not clear how those restrictions could affect commodity prices and American producers in the long term.
The decline in oil and gas jobs in America is reminiscent of the long decline of the US coal industry, where employment rose decades before production fell as mining companies extracted more rock with fewer people.
Two decades into the shale boom, companies are drilling wells that go deeper into the earth, unlocking more oil and natural gas. New technology is allowing them to oversee drilling, fracturing and production from afar, with fewer people on site. And bigger companies are buying up smaller players, shedding accountants, engineers and other workers as they go.
While the overall number of jobs is up from the darkest days of the pandemic, far fewer people are working in the industry than they were before Covid.
Among the cost-cutting techniques being 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 transition to cleaner forms of energy, even if that shift is happening more slowly than many analysts predicted a few years ago.
“You’re not going to see a lot of job growth just in the basic act of producing oil and natural gas,” Chris Wright, chief executive of oilfield services company Liberty Energy, said in an interview before Mr. Trump appointed him to direct. Department of Energy.
The industry, said Mr. Wright, is “now on a flat and possibly gradually declining trend in employment.”
Mr. Trump will “protect our energy jobs” by lowering costs for consumers, said Karoline Leavitt, 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 clip than other industries. The industry nearly doubled in size over 10 years, turbocharging the economies of places like North Dakota, home of the Bakken shale formation.
Then, in 2014, oil prices fell. It took a few years, but U.S. production eventually rebounded, rising to a record nearly 13.5 million barrels per day last fall. Employment never fully recovered, however, entering an undulating decline punctuated 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 of the oil company that had hired his crew to do field work walked into the crew’s mobile office in eastern New Mexico.
“Pump all your sand, pump all your chemicals, pack,” recalled Mr. Waguespack the man who told the team. “And get out of here.”
Before long, Mr. Waguespack, an engineer for 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 as demand for fuel dried up that year, he found himself wondering, “What do I do next?”
While Mr. Waguespack looked for work, oil and gas companies slashed budgets and did whatever they could to survive. They drilled ever larger wells and installed sensors and other technologies that enabled more remote work. Many turned to natural gas to power fracking equipment, instead of oil, and found it was cleaner and faster.
Heavily indebted companies fell short, with more than 100 manufacturers and service firms seeking bankruptcy protection in 2020, according to law firm Haynes Boone.
By the end of 2024, the number of drilling rigs operating in the United States had fallen roughly 28 percent in five years, federal data show. And still production increased.
“We get three times more wells off 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 person, we’re producing a lot more.”
That the oil and gas industry has become more productive is good news for the economy, which benefits when people are able to do more with less, said Jesse Thompson, an economist with the Federal Reserve Bank of Dallas.
“But in the meantime,” he added, “there are firms, 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, are no longer offering 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 similar industries, federal data show. By last fall, that premium had narrowed 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 work in the Permian Basin so lucrative were gone. Without them, Mr. Waguespack said, his annual salary shrunk to about $105,000, down from roughly $130,000 in 2019, in line with what he could make working in an office or a home factory in Louisiana.
“I started looking for other jobs, trying to get out of the oil field,” said Mr. 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 criss-crossing pressure washers of Pennsylvania, like drilling rigs, had other options.
Mr. Owlett’s job 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 could rarely pick up his sons from school.
“I was tired of losing everything to them,” Mr Owlett, 34, said.
When he realized in 2023 that he could earn a similar income by buying discounted goods and reselling them on eBay, Mr. Owlett left the gas field.
Jobs like the one Mr. Owlett held are among the most cyclical, rising and falling with oil and gas prices. These service positions account for most of the work that has returned since the pandemic.
Refining — the process of turning crude oil into gasoline, diesel and other fuels — has experienced more steady job losses. Although demand for oil is rising globally, many believe that the appetite for gasoline in the United States and elsewhere has already peaked and companies are shutting down fuel production facilities.
Other job losses have followed mergers and acquisitions. After buying 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 purchase of Marathon Oil, state data show.
At the same time, major oil companies have expanded into countries where wages are lower.
Five to 10 years ago, Western oil and gas companies turned to places like India’s tech hub Bengaluru to fill roles in information technology, human resources and supply chain management, said Timothy Haskell, who heads the practice. of EY people advising the energy industry in the United States. Today, they are bringing together 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 is very much growing 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 has 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 consistent since 2014, a company spokesman said, describing the oil producer as “a proud American company.”
Exxon has had a growing presence in Bengaluru. The scope of work that employees do 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 major projects, including those off the coast of Guyana and in the United States, three former employees said.
Exxon declined to comment on its operations in India.
Mr. Waguespack eventually found the job he was looking for in Louisiana. In his new engineering role at an industrial gas supplier, he leads various projects such as replacing aging equipment at facilities around the Gulf Coast.
He earns slightly more than he did during his second stint in the oil field. And instead of commuting from Louisiana to West Texas for weeks at a time, he lives five minutes from the office.
“I, to this day, still wonder what might have happened if I had stayed,” said Mr. Waguespack. “But I think I have a good thing going on right now.”
Ben Casselman contributed to the reporting.
