Want To See A Texas Oil And Gas Boom? Look At The Jobs.
The Texas energy industry might not be at the heights it reached during the shale boom, but the Lone Star State’s oil and gas jobs are unquestionably booming.
Wages and employment in the state’s oil and gas industry both saw significant hikes in the first two quarters of 2023, according to the Texas Oil & Gas Association (TXOGA), with wages rising 22% to approximately $16 billion from first-quarter 2022 to first-quarter 2023.
Direct employment in the industry also saw a spike, rising 8.1% to 445,222 jobs during the same time period, according to the study analyzing data from the U.S. Census Bureau and the Texas Workforce Commission.
“The industry’s record $19.5 billion in quarterly wages underscores its resilience amidst labor and cost challenges,” the author of the study and TXOGA chief economist Dean Foreman told Hart Energy. “While a reduced rig count could affect future growth, the most recent data highlights the indispensable role of oil and natural gas in fueling our modern society.”
The numbers are indicative of a strong job market; the U.S. Bureau of Labor statistics for July showed the Texas unemployment rate at just 4.1% and the national unemployment rate even lower at 3.5%.
“Re-expanding the oil and natural gas workforce has required attracting people back from other jobs and geographies, and competition for the best workers has remained high,” Foreman said.
Foreman said the largest wage gains were in oil and gas extraction, drilling of wells and operational support activities, which cumulatively grew by 24% to $10.1 billion.
Other growth areas include oil and gas field machinery and equipment manufacturing wages, up by 29% or $283 million; pipeline transportation wages, up by more than 23% or $259 million; and petroleum refineries wages, up by more than 31% or $245 million.
“The bigger picture for oil markets has by official estimates remained one of record-high global demand with increased reliance on U.S. and especially Texas’ production this year and in 2024. Consequently, the prospects of good news for Texas continue to look bright,” Foreman said.
His analysis also found that support activities for oil and gas added 15,415 jobs — a 16% increase. All told, those jobs paid $3.54 billion.
A potential threat to the wage bonanza lies in possible capex cuts. In a recent analysis of 18 public E&Ps, the Norwegian energy research company Rystad Energy predicted reinvestment rates—the ratio between capital expenditure and cash from operations—have already peaked and will drop this year.
TXOGA President Todd Staples said a low rig count might also be a cause for concern.
“Despite a slowdown in rig count which could have a downward impact on these numbers in the future, this analysis gives rightful cause for optimism and is continued evidence of the demand for oil and natural gas’ irreplaceable role in our modern society,” Staples said in a release. “However, growth is not guaranteed, and it is critical that we remain committed to fostering policies that promote domestic production, keep jobs and benefits here at home and reduce our reliance on foreign nations to meet our energy needs.”