Texas lost 60K drilling jobs during 2020

Oil exploration and production hammered as the pandemic crushed demand for crude

Nearly 60,000 oil exploration and production jobs in Texas were lost in 2020, a staggering figure that underscores the deep industry wounds caused by the pandemic and oil crash.

Employment in Texas’ oil drilling and extraction sector fell by more than a quarter as the pandemic crushed demand for crude and petroleum products, forcing oil and gas companies to cut production and lay off thousands of workers.

There are about 150,000 upstream oil and gas workers in Texas, the fewest in more than 15 years. Just more than two years ago, in December 2018, the sector employed more than 228,000 workers, according to the Texas Alliance of Energy Producers, a trade group.

“The job loss is devastating,” said Karr Ingham, the alliance’s petroleum economist. “In addition, wages were pushed down sharply for those who remained on oil and gas company payrolls. The combined effects of lost jobs and lower industry wages only served to worsen the effects of COVID on the statewide economy, and on local and regional economies with strong ties to oil and gas production.”

Nationally, the oil and gas industry — including exploration, production, services and petrochemical sectors — lost an estimated 107,000 jobs during the pandemic, according to global consulting firm Deloitte. The job losses came amid the sharpest drop in global crude demand in the shortest amount of time on record. Texas crude oil production hit a record 5.4 million barrels per day in March before it plunged by nearly 20 percent to about 4.3 million barrels a day by May.

The number of drilling rigs in Texas plunged by more than 60

percent in 2020, dropping to 155 in December, the lowest level since oil field services giant Baker Hughes started tallying the weekly rig count in 1944. The number of Texas rigs bottomed out in August at 100 rigs.

The number of drilling permits issued by the Texas Railroad Commission fell by nearly half to 6,295 in 2020, the lowest since at least the

1960s. A record low 251 permits were issued in May.

The state’s oil and gas industry appears to be recovering since crude prices climbed above $40 a barrel during the summer and above $50 a barrel last month as COVID-19 vaccines rolled.

Since May, oil and gas companies in Texas have added back 407,000 barrels per day of crude production, ending 2020 with about 4.8 million barrels a day. Texas produces about 44 percent of the nation’s crude.

The oil job losses stemming from the pandemic appear to have reached a low in August, after which an estimated 2,300 jobs were added during the final months of 2020, according to the Alliance.

“That the industry is adding jobs is encouraging, pointing to at least somewhat better times ahead in 2021,” Ingham said.