Nearly 60,000 Texas oilfield workers lost their jobs last year, as the coronavirus pandemic and other factors largely out of the state’s control devastated the world’s energy markets.
Texas Oilfield Employment at Lowest Level in 15 Years
According to a recent report from the Texas Alliance of Energy Producers, the state’s upstream oil and gas industry currently employs just 150,000 people – the lowest number in 15 years. In December of 2018, Texas oilfields employed more than 228,000 workers.
“The 60,000 jobs lost are mainly field jobs,” Ed Hirs, an energy Fellow for the University of Houston, told ABC 25 shortly after the report’s release. “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.”
OPEC Price War Added to Texas’s Energy Struggles
The coronavirus pandemic is largely to blame for the job losses. Over the past year, pandemic-related shutdowns caused global energy demand to drop significantly, and oil prices naturally followed. At one point, the price of West Texas crude – the lifeblood of the Permian basin – even fell into negative territory for the first time in history.
Add in an OPEC price war at the start of 2020, and it’s easy to see why last year was one of the worst on record for the Texas energy sector.
“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,” Hirs continued.
Texas Oilfields Showing Signs of Life, But Full Recovery Remains in Doubt
Nearly a year after the crash began, the Texas energy market has begun to show some signs of life.
As of last Friday, oil prices had rebounded to $56 per barrel. The Texas rig count also increased by 7 and currently stands at 189. While that is certainly an improvement, the count remains down by about 205 rigs compared to the same period last year.
Most of the growth came from the Permian basin, with Martin County adding three rigs and Howard and Reeves County each adding one. But Midland County saw its rig count drop by two, and Loving County saw its count fall by one.
Now that vaccines are available, there is hope that the world will finally get COVID-19 under control. When that happens, the energy market will see further recovery. However, a complete rebound could well depend on Russia and Saudi Arabia.
“If OPEC wants an $80 for a barrel price, we’ll see those jobs come back,” Hirs predicted. “If OPEC wants a $40 a barrel price, we won’t see any new jobs returning to the oil patch.”
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