Oil and gas industry employment remains depressed

Increases in per-well production offsets sharp drop in workers, rig counts.

By Bob Vavra, CFE Media August 8, 2016

Oil and natural gas production businesses have cut more than one-quarter of its jobs in the past two years due to the global slump in oil and gas prices, but this reduction has not had a similar impact on production levels.

In its weekly "Today in Energy" report, the U.S. Energy Information Agency (EIA) noted that more than 142,000 jobs have been lost in the industry since the peak employments levels of 538,000 in October 2014, "Not all production jobs are directly related to drilling," EIA officials said in a press release. "The majority of the jobs are actually for extraction or support activities, which include the operations of drilled wells, exploration, excavation, well surveying, casing work, and well construction. This also includes the maintenance of already producing wells."

But increased productivity from wells, and a reduction in drilling, has means just a small decrease in overall output during the last two years. The EIA report stated that since October 2016, U.S. crude oil production was down just 2%, while natural gas production was flat.

"The divergence between trends in rig counts and employment on the one hand and oil and the trends of natural gas production on the other are attributable to increases in production per new well in key regions, driven in part by advances in siting and drilling technology," EIA officials said in the report.

The overall rig count id down even more acutely than the employment figures. The EIA reported that by May of 2016, rig counts for oil and natural gas had dropped to 404, from a peak of more than 1,800 in the fall of 2014.

Bob Vavra is Content Manager for Oil & Gas Engineeringbvavra@cfemedia.com.

Original content can be found at Control Engineering.