For years, as oil and gas companies expanded production, they employed large numbers of workers, enriching communities across the United States. That is no longer true.
The country is pumping more oil than ever before and gas prices are near record highs. But companies that extract, transport and process these fossil fuels employ about 25 percent fewer workers than they did a decade ago when they produced less fuel, according to a New York Times analysis of federal data.
Now, as some worry about a future oil oversupply, producers are tightening their belts, as spending across North America is expected to drop 3 percent this year, according to Barclays. That raises the prospect of continued job losses, even as President-elect Donald J. Trump urges companies to “drill, drill.”
Oil prices have risen in recent days after President Biden announced new sanctions on the Russian oil industry, but it is unclear how those restrictions will affect prices and American producers in the long run.
The decline in American oil and gas jobs is reminiscent of the long-term decline of the US coal industry, where employment rose for decades before production fell as mining companies put out more rock and fewer people.
Two decades into the shale boom, companies are drilling wells deeper into the earth, unlocking more oil and natural gas. New technology allows them to direct drilling, fracking and production remotely, with fewer people on site. And big companies are snapping up smaller players, shedding accountants, engineers and other workers as they go.
While the number of jobs has increased since the worst days of the pandemic, there are far fewer people working in the industry than before Covid.
Among the cost-cutting strategies pursued by Exxon Mobil and Chevron: hiring engineers and geologists in India, where labor is cheaper, to support operations in the United States and elsewhere.
The decline in oil and gas activity also reflects a continued shift to cleaner energy sources, even if that shift is happening more slowly than many analysts expected a few years ago.
“You're not going to see an increase in jobs in the basic act of producing oil and natural gas,” said Chris Wright, chief executive of the oil company Liberty Energy, in an interview before Mr. Trump tapped him to lead. Department of Energy.
Industry, Mr. Wright said, “it's at a low point now that it's probably going to slow down in employment.”
Mr. Trump will “protect our energy jobs” while lowering costs for consumers, said Caroline Leavitt, a spokeswoman for the president-elect's transition team.
During the first half of the American fracking boom, oil and gas companies added workers at a faster clip than other industries. The industry has nearly doubled in size in 10 years, boosting the economy of places like North Dakota, home of Bakken shale production.
Then in 2014, oil prices dropped. It took a few years, but US production finally bounced back, rising to a record of nearly 13.5 million barrels per day last fall. Employment has never fully recovered, however, going into a sad slump caused by booms and busts, most recently during the pandemic, when oil prices dropped slightly below zero.
Matthew Waguespack was drilling a well in early 2020 when a representative of an oil company that had hired his crew to do road work walked into the crew's mobile office in eastern New Mexico.
“Pump all your sand, pump all your chemicals, collect,” Mr. Waguespack remembered the man telling the group. “And get out of here.”
Not long after Mr. Waguespack, an engineer for the oil company then known as Schlumberger, lost his job. Like the more than 100,000 other oil and gas workers who lost their jobs due to reduced demand for gasoline that year, he found himself asking: “What do I do next?”
While Mr. Waguespack looking for work, oil and gas companies slashed budgets and did whatever they could to survive. They hold larger wells and install sensors and other technologies that allow for more remote operations. Many are turning to natural gas powered engines, instead of diesel, and are finding that it is cleaner and faster.
Heavily indebted companies did not make it, with more than 100 manufacturers and service companies seeking bankruptcy protection in 2020, according to law firm Haynes Boone.
By the end of 2024, the number of drilling rigs operating in the United States had dropped nearly 28 percent over five years, federal data show. And still production went up.
“We're getting three times the number of wells in the rig today that we did in 2018 or 2019,” said Bart Cahir, who heads Exxon's division in an interview last year. “With each person, we produce a lot more.”
That the oil and gas industry has become more productive is good news for the economy, which benefits when people can do more with less, said Jesse Thompson, an economist with the Federal Reserve Bank of Dallas.
“But in the meantime,” he added, “there are companies and individuals and communities that can lose.”
One result of the industry's efficiency is that oil and gas companies, which are known to pay well, are no longer paying more than other industries. Before the pandemic, average wages in oil and gas production were 60 percent higher than those in manufacturing, construction and other related industries, federal data show. Last fall, that premium dropped to more than 30 percent.
Mr. Waguespack found its way back to the oil field in 2021, more than a year after it was laid off. But by then, the day rates and other incentives that had made his work in the Permian region so profitable were gone. Besides them, Mr. Waguespack said his annual pay dropped to about $105,000, up from about $130,000 in 2019, in line with what he would have made working in an office or plant at home in Louisiana.
“I started looking for other jobs, trying to escape the oil field,” said Mr. Waguespack, 30.
With the post-Covid economy doing well and unemployment below 4 percent nationally for more than two years starting in early 2022, he and workers like Cody Owlett, who spent a decade cutting Pennsylvania pressure washers like drill rigs, had other options.
The work of Mr. Owlett paid well where he lived near the state's northern border: about $35 an hour, with more than 60 hours of overtime some weeks. But all the time he spent on the road meant he missed holidays and rarely picked up his boys from school.
“I was tired of missing everything I have,” said Mr. Owlett, 34.
When he realized in 2023 that he could make the same money by buying discounted goods and reselling them on eBay, Mr. Owlett left the gas station.
Jobs like that Mr. Owlett had been caught between cycles, ups and downs in oil and gas prices. Those service positions are doing a lot of work that has come back after the pandemic.
Refining – the process of turning crude oil into gasoline, diesel and other fuels – has seen steady job losses. Even as demand for oil continues to grow around the world, many believe that the appetite for gasoline in the United States and elsewhere has already peaked, and companies are shutting down gasoline production facilities.
Some job losses have followed mergers and acquisitions. After acquiring a pipeline company, Pittsburgh-based natural gas driller EQT said last fall it was cutting its workforce by 15 percent. In Texas, about 500 people lost their jobs as part of oil producer ConocoPhillips' recent acquisition of Marathon Oil, state records show.
At the same time, oil executives have been working in countries where wages are low.
In the past five to 10 years, Western oil and gas companies have turned to places like India's technology hub Bengaluru to fill roles in information technology, human resources and procurement management, said Timothy Haskell, who leads EY's energy consulting practice. United States. Today, they make up the engineers and other technical experts who form the backbone of the industry.
“Although the workforce may be shrinking in the US, in some cases it is growing significantly in other parts of the world,” said Mr. Haskell.
Last year, Chevron said it was opening an engineering and technology center in India, a $1 billion project that Chevron described as part of a broader cost-cutting effort.
“We're going to change where and how we do some of our work,” Mike Wirth, Chevron's chief executive, told Bloomberg in November. More than half of Chevron's workforce is based in the United States, and that ratio has been stable since at least 2014, a company spokesman said, describing the oil producer as a “proud American company.”
Exxon has had a growing presence in Bengaluru. The scope of work performed by workers there has increased over time from small, routine tasks to more important tasks. Engineers and scientists from the southern Indian city have worked on some of the company's most prominent projects, including those off the coast of Guyana and the United States, three former employees said.
Exxon declined to comment on its Indian operations.
Mr. Waguespack finally found the job he was looking for in Louisiana. In his new engineering role, at an industrial gas company, he is managing various projects such as replacing aging equipment at facilities on the Gulf Coast.
He did a little more than he did during his second tenure in the oil field. And instead of commuting from Louisiana to West Texas for weeks at a time, you live five minutes from the office.
“To this day, I still wonder what would have happened if I had stayed,” said Mr. Waguespack. “But I think I have a good thing going on now.”
Ben Casselman reporting contributed.
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