Oil and gas production up, payrolls down in Texas

Energy companies working on efficiency during the recent market downturn have learned to do more with less, the Texas Alliance of Energy Producers reported.

By Daniel J. Graeber
A Texas trade group said oil and gas companies are doing more with less and that means lower payroll numbers. File Photo by Gary C. Caskey/UPI
A Texas trade group said oil and gas companies are doing more with less and that means lower payroll numbers. File Photo by Gary C. Caskey/UPI | License Photo

July 27 (UPI) -- Oil and gas producers in Texas are doing more with less, but this has a negative side as companies need fewer workers on their payrolls, an economist said.

Karr Ingham, a petroleum economist for the Texas Alliance of Energy Producers, said the pace of expansion in the Texas energy sector has been extraordinary.


"What makes this one unique is the sheer amount of crude oil and natural gas produced in the state - and the growth rates in production - at lower levels of activity compared to the peak levels from the previous growth cycle," he said in a statement.

The number of rigs deployed across the state is increasing, as are payrolls, though employment is below the peak rates from four years ago. Crude oil and natural gas production, meanwhile, are on pace to set records in 2018.

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For oil, Texas production averaged 4.3 million barrels per day in June, a 27 percent increase from the same month last year. For gas, most of it is associated with oil and not considered a primary target for producers. More than 90 percent of the active rigs in Texas are drawing oil, Ingham said.


The rig count in June was 370 less than the peak of 904 reached in November 2014. Ingham said, however, that it takes fewer rigs and fewer rigs than it did four years ago. For jobs, companies are hiring, but not as strongly as they were at the peak of exploration and production activity in Texas in 2014.

"Estimated upstream oil and gas employment as of June 2018 is down by over 68,000 jobs compared to peak industry employment levels in late-2014, and still crude oil production is at record levels and continues to climb," Ingham said.

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The Federal Reserve Bank of Dallas on Thursday reported rig counts have stalled, production is growing and employment growth was strong, but slowing down. In a possible sign of deceleration, the bank said existing-home sale prices are 6 percent higher than last year, but sales themselves have slowed from last year.

Elsewhere, the Dallas Fed said production trends could be inhibited by the lack of pipeline capacity in the region. U.S. tariffs on aluminum and steel could create headwinds in general for the domestic oil and gas sector.

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