Fewer employees needed to produce oil in Texas

Texas oil production is up more than 20 percent from last year, but sector employment is down from its peak four years ago.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  April 12, 2018 at 6:45 AM
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April 12 (UPI) -- Texas crude oil and natural gas production is accelerating along with higher commodity prices, but payroll numbers are lower, a trade group reported.

The Texas Alliance of Energy Producers estimated about 215,000 people were on the payrolls of oil and gas firms in the state, about 27.5 percent below the estimated peak in December 2014. A decade ago, one person was employed in the exploration and production sector in Texas per 2,000 barrels of production. By 2016, that ratio was closer to 6,000 barrels per employee.

Federal data show that, nation-wide, the sector is hiring. In March, about 2,000 workers were added to payrolls for oil and gas extraction, while the mining sector added 9,000. Total non-farm payroll employment edged up by 103,000 in March

For the sector as a whole, exploration and production activity is on the rise. Reported as rig counts, Baker Hughes data show activity increased more than 25 percent from last year. Activity, however, peaked in September 2008, with 946 rigs reported. The February rig count averaged 476 in Texas.

Total crude oil production in Texas, meanwhile, was more than 20 percent higher than last year at around 110 million barrels for February, the last full month for which the alliance published data. Gas production increased 3 percent.

"The implications are striking: record crude oil and natural gas production at significantly lower prices, rig counts, and number of industry workers," Karr Ingham, the chief economist at the alliance, said in an emailed statement. "It means that fewer employees are needed to produce more crude oil in Texas and the United States than has ever been produced."

A survey published late March by the Federal Reserve Bank of Dallas found uneven enthusiasm about U.S. policies in the energy sector. Survey respondents were optimistic in general about federal deregulation efforts, but uncertainty on steel tariffs.

President Donald Trump last month signed off on a 25 percent tariff on steel imports and a 10 percent tariff for aluminum. With steel a fundamental component of the exploration and production side of the industry, Ingham's group called for more consideration from the White House.

The Dallas Fed's survey found production from Texas increased for the sixth quarter in a row. Texas is the No. 1 oil producer in the country and hosts two of the more lucrative shale basins - Eagle Ford and Permian.

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