Dallas Fed: Energy Jobs Still Below Pre-Pandemic Levels

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Though production trends for both crude oil and natural gas remain elevated, jobs in the energy sector are scarce as upstream efficiencies improve, the Federal Reserve Bank of Dallas said.

Federal data show both the Eagle Ford and Permian shale basins, the two main oil- and gas-producing regions in Texas, are on pace for moderate expansion. Combined oil production from the two basins is around 7.2 million barrels per day (BBL/d) on average.

Of those, the Permian is the most lucrative basin by far. The Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, said it expects crude oil production in the Permian to increase from 6.3 million BBL/d to 6.6 million BBL/d by next year.

Gas production increases too, by around 1 billion cubic feet per day (Bcf/d) to average 25.8 Bcf/d in 2025. Gains, EIA said, are partly due to improvements in drilling productivity.

Drillers are going longer with horizontal drilling and multi-bore wells. The Dallas Fed found drilling in a horseshoe pattern for horizontal laterals could improve efficiency even further.

That, however, may be creating job strains over the long-term, even though the sector experienced a hiring rush through July.

"Despite a robust recovery of energy markets, energy employment is still not at pre-pandemic levels, partly due to increasing oilfield efficiency and consolidation in the energy sector," the Dallas Fed said on Thursday.

In a June employment survey, meanwhile, the Dallas Fed found the oil and gas sector was one of the few that saw job losses month-on-month. Apart from improved efficiency, upstream operators may be chasing profits over new discoveries at a time when commodity prices are suppressed.

West Texas Intermediate, the U.S. benchmark for the price of crude oil, was trading at around $74 per barrel early Friday, compared with around $85 per barrel at this time last year.

A slowdown in the global economy, particularly in China, is behind the slump in energy prices. Elsewhere, the Dallas Fed said that Hurricane Beryl, which made landfall in Texas in July, helped suppress weekly earnings in Houston because of disruptions to work hours.

Over the three months to July, the Houston job market contracted by 1.3%, with Beryl adding to the numbers on the unemployment line.

Year-on-year, the Houston labor market was relatively balanced, with a 1.7% increase between July 2023 and July 2024. The largest contributor to job growth was government and information services.

"However, over that period, trade, transportation and utilities and professional and business services were flat," the Dallas Fed stated. "Oil and gas employment was mostly flat with a 0.8% decline."

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