At a time when the U.S. economy was still recovering slowly from the worst economic recession since the Great Depression, the oil and gas industry grew by 3.4 percent, or more than 35,000 jobs, in just the first six months of 2014, according to a new report by the Texas Independent Producers & Royalty Owners Association (TIPRO).
The job gains resulted in a total oil and gas industry employment figure of 1,066,000 in June 2014.
The brunt of the growth in the industry during the first six months of 2014 came from oil and gas operations support activities, oil and natural gas extraction services, and oil and gas drilling.
When the number of new oil and gas jobs in the first half of 2014 are added to oil and gas job growth through 2013, it represents an increase of 8.6 percent. During the same time period, total job growth in the overall U.S. economy was 5.9 percent.
Rigzone talked to TIPRO’s president, Ed Longanecker, about some issues that had the potential of affecting future employment growth.
Rigzone: Could the drop in crude oil prices have an effect on employment in the upcoming year? Rig counts have slipped lately, so could that be a sign that price weakness, if prolonged, could affect job growth in the field?
Longanecker: The price of crude oil, as well as global supply and demand, could certainly impact the level of exploration and production activity in our state and country, as well as the related job growth. The decline in crude oil pricing is clearly related to a number of factors, which have been taken into consideration by many operators when planning their long term investment strategies.
Rigzone: The town of Denton, Texas voted for baning fracking within the city limits, what will the effect on fracking in general be? Some say that the most serious threat would be that it might set a precedent, prompting other locales to follow Denton’s lead.
Longanecker: The greatest threat to our industry is the overreaching regulatory oversight by our federal government, but efforts to ban the safe act of hydraulic fracturing in targeted states could certainly have an impact in the short term. Many of these local moratoriums or bans will be settled by the judicial system and the spread of these efforts will eventually stop. Clearly, what’s occurring in Denton is an infringement on property rights and an effort to exploit citizens to advance a flawed anti-oil and gas ideology through fear. Fortunately, both law and science are on the side of industry and will eventually prevail.
Rigzone: The oil and gas industry is entering a period known by many as the “great crew change,” with older voters moving into retirement, and younger voters moving to oil and gas careers in greater numbers. Is that enough to ensure continued strong growth in oil and gas employment, regardless of cyclical downturns in the price of crude oil?
Longanecker: Domestic oil and gas production will continue to increase for decades to come, particularly with the ongoing advancements and technologies being utilized by operators. While we can’t guarantee net positive job growth on a month-to-month basis, the oil and gas industry will always remain a cornerstone of the Texas economy.