The Texas oil industry’s attempt to do more with less may have left the state’s oil and gas workforce permanently smaller.
Since crude prices collapsed more than three years ago, U.S. shale drillers have cut costs, gotten discounts on oil field services and drilled in more prolific sweet spots in an effort to pump more crude at lower costs.
Drillers in Texas are on the cusp of beating the state’s 45-year-old oil-production record, even though the workforce supporting the oil industry in Texas is about the size it was in 2011.
In fact, several measures of economic activity in the Texas oil industry – the number of working rigs, drilling permits, bringing wells into production – have come in pretty low recently, Amarillo economist Karr Ingham said.
Seven years ago, as the U.S. economy recovered from a downturn, oil companies had just managed to transfer the technology and techniques that opened up once-inaccessible U.S. shale gas reserves into the nation’s oil patches. The workforce was around the same size it is today.
By December 2014, the Texas oil and gas workforce grew to its largest size in decades, at about 300,000 employees. But after the oil-market crash, that workforce shrank by more than a third, to 192,000 workers by September 2016. Since then, with higher oil prices supporting Texas drilling activity, the state’s oil and gas headcount has grown to only 223,000.
But the Texas Petro Index, which tracks the various leading indicators of oil activity, is still well below its peak in 2014, thanks to more efficient oil and gas output. But Texas oil producers are expected to harvest 1.42 billion barrels in 2018, beating the 1972 record of 1.26 barrels.
The index “is nowhere close to where it was in late 2014,” Ingham said. “What are the chances it’s going to get back to that level anytime soon? Pretty slim, frankly.”
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.