BRYAN, TX — The oil and gas industry is what fuels Texas. The year 2020 was one of the hardest years for the economic driver. A recent report from the Texas Alliance of Energy Producers says Texas lost nearly 60,000 oil and gas jobs last year alone.
“The 60,000 jobs lost are mainly field jobs,” says Ed Hirs, an energy Fellow for the University of Houston. “You know we have laid down more than 100 rigs. Each rig accounts for 100 works plus everybody who supports them, so these are direct high paying jobs in the oil patch, out in the fields operating, drilling, and managing our oil production.”
The report also notes there are now about 150,000 upstream oil and gas workers in Texas, the fewest in more than 15 years. In December of 2018, the sector employed more than 228,000 workers.
The global pandemic coupled with the plummeting demand for crude oil throughout last year led to the loss of thousands of jobs.
“It’s the low-cost producers [Saudi Arabia and Russia] that can start a price war that can really hammer those of us in Texas, and that’s what they were doing in January and February, and then when you think it couldn’t get any worse, the pandemic hits,” said Hirs.
Experts say while 2020 was a horrific year for the oil and gas industry, the problem goes beyond the last year, back nearly a decade.
“You know, it’s just not 2020. If we look at the return on capital that oil and gas have delivered to the market, it’s awful over the last ten years. Of all of the different industrial sectors in the Standard & Poor’s 500 (S&P 500) oil and gas has delivered roughly zero,” Hirs stated.
In an interview with 25 News last week, Texas Senator John Cornyn (R.) says with a new administration in the White House, President Joe Biden’s decision to stop the construction of the Keystone XL pipeline is devastating for an economy already crippled by the global pandemic.
“I think this is largely symbolic, but it’s not symbolic to the people who are losing their jobs,” said Sen. Cornyn.
However, Texas’ oil and gas industry appears to be slowly recovering. As of Friday, February 5, crude is trading $56 a barrel, a trend in the right direction that began shortly after the rollout of the coronavirus vaccine. Experts say it’s still too difficult to determine if we will see those 60,000 jobs lost return to the Lone Star State.
“Not only do we need the world economy to rebound from the pandemic recession, but we also need OPEC to allow the price of oil to increase to the level where this plays in Texas and in Bakken and in Colorado and Wyoming to become economic again,” said Hirs. “If OPEC wants an $80 for a barrel price, we’ll see those jobs come back. If OPEC wants a $40 a barrel price, we won’t see any new jobs returning to the oil patch.”
Texas represents about 44% of the U.S. crude production. The Houston Chronicle reports nationally, the oil and gas industry lost an estimated 107,000 jobs during the pandemic, according to global consulting firm Deloitte.