Industrial activities driven by the normal phases of resource extraction have changed since 2014. The industry has moved from the exploratory phase of the unconventional drilling of shale and tight oil formations to the development phase. Accompanying the development phase, oil and gas producers have been keenly focused on deploying technologies that drive down their unit costs for production volumes. Multiple wells drilled on a single pad (instead of just one well per pad) and innovations that include automation have combined to squeeze many days out of the drilling and completion process. The advances help explain how similar levels of production can be achieved with fewer rigs and fewer people in the field than a decade ago. The innovation also explains how the industry’s production continues to grow while size of the oil and gas workforce is moving in the opposite direction.
A further widening of the lens, however, reveals that the oil and gas industry is a laggard among all industries for Texas employment growth. From 1990 to the present, the total nonfarm employment payroll in Texas grew from 7.1 million jobs to 13.3 million jobs, an increase of 87 percent. Over the same three decades, employment levels for key oil and gas industries fluctuated with oil prices, from a low of 246,800 in 2003 to a record of 429,300 in 2014. Overall industry employment in 1990 was 272,600; most recently it was 330,400, up only 22 percent, or just slightly more than one-fifth the pace of overall Texas employment growth.
Over the last 32 years, key oil and gas industries in Texas have grown at an annual pace of 0.6 percent. More recently between 2020 and 2021—a time of recovery for the overall economy—the key oil and gas industries in Texas shed jobs by an average of 3.3 percent annually.
Similar observations were recorded in the recent U.S. Department of Energy’s U.S. Energy and Employment Jobs Report (USEER). The compendium reports on state and national employment trends by energy technology groups, which it breaks into five major categories: Electric power generation; motor vehicles; energy efficiency; transmission, distribution, and storage; and fuels. The fuels group offers some overlap with the key oil and gas industries we selected. The overlap consists primarily in two (natural gas, oil & other petroleum) of its seven sub-technology areas and accounts for 92% of the 265,273 fuel jobs found in Texas.
Of the 30,903 net annual employment additions in Texas reported in the 2022 Energy Employment by State USEER, about 13,000 were new jobs created in sustainable technologies like low or zero-carbon vehicles, energy efficiency, and solar. Table 1 highlights the year-over-year employment changes for the energy sectors. The fuels group was the only sector to lose jobs in 2021.