Posted on 11/13/2015 4:12:40 AM PST by thackney
The number of oil and gas job losses in Texas may be far worse than an industry group originally predicted, potentially reaching 56,000, according to the latest analysis by the Texas Alliance of Energy Producers.
When crude prices started collapsing late last year, Karr Ingham, a petroleum economist for the alliance, initially forecast that the state could lose 40,000 to 50,000 upstream oil and gas jobs during the downturn, but the fresh plunge in oil prices over the summer forced additional round of layoffs across Texas.
"We now appear to be well beyond that estimate and the end is not in sight," Ingham said in a statement Thursday.
He developed the Texas Petro Index, which measures the industry's health by factoring in production numbers, the number of active drilling rigs and the total number of people employed by oil and gas companies. The index derives its employment data from the Texas Workforce Commission's monthly employment statistics, which place the number of job losses at 30,000 between December and September.
But those statistics provide a full picture of the number of workers on energy companies' payrolls, many whom don't fall into traditional oil and gas classifications, and the numbers often get revised months later.
Another data set issued quarterly by the the commission measuring the state's employment and wages at the county level found that the industry likely cut 48,000 in the first six months of the year, a staggering figure, Ingham said.
The layoff announcements continued to mount in the third quarter, which means that the state may have lost as many as 56,000 jobs, an estimate that Ingham called conservative.
In all, 279,600 Texans remain employed by oil and gas companies in the state, although those figures may be overstated, Ingham said. That's down 8.3 percent from the record employment of 305,000 in December, but still substantially higher than the low point of industry employment during the recession in October 2009, when the number of Texans on oil and gas payrolls tumbled to 179,200.
As oil companies continue slashing jobs and idling rigs to save money, the Texas Petro Index slipped again in September to 226.2, down 27 percent from the prior year. Despite rampant cost-cutting, exploration and production firms managed to continue pulling more oil and gas from the ground from the same time a year ago, boosting crude production by 10.5 percent to 104.9 million barrels in September.
Natural gas output swelled by 2.6 percent to 728.5 billion cubic feet.
While I am grateful for the lower price of gasoline and heating oil, I am concerned for those that have lost their jobs b/c of the crash.
There but for the grace of God go I...
Lots of folks losing their jobs in the oil industry. However, the Middle Eastern money is taking care of Washington, so no worries.
It goes deeper than that. When oil is high, millions of other jobs are lost as it slows down the economy. When oil is low, millions of jobs are created (it’s like a big tax cut to businesses and many individuals).
So you can be more than grateful - (which is proper) - you can appreciate the fact that nothing in economics is a zero sum game.
Would there even be a “crash” if world oil prices were not artificially controlled? Would a “crash” exist if importing any oil at all, the U.S. was able to supply itself and even export?
Not sure the crash, peak oil, any need for imports is believeable.
KYPD
I think the current crash is partly due to the Saudis flooding the market to gain market share?
When the price of oil is this low, lots of jobs are lost. Drillers are idle, not purchasing replacement/new equipment. Equipment builders are not selling anything and have to lay off people. Suppliers to them aren’t selling anything and are having to lay off.
As long as the price is below the break even point, this will continue. It is a ripple effect and goes all through society. The article only refers to direct oil and gas jobs.
yes, but if you deny there’s a ripple effect in the other direction, you’re not being intellectually honest.
When gas prices are low, consumer spending explodes, and as we all know, that’s the biggest juicer of job creation.....consumer spending. Leads to booms in housing, autos, vacations, business creation, and general overall optimism.
This is how economics works. The problems really happen when the change is so big and so quick that normal economic fleshing out doesn’t have time to occur. That’s been the unhappy history of energy since 2005...spiking way up and way down rapidly.
Lol...wut?
Is that why the economy has been booming for the last year?
Oh wait...
More than just the oil industry. We have lots and lots of business in this country that are indirect, but dependent on oil business orders.
Meanwhile, consumers travel more, eat out more, shop more, and are more likely to upgrade their homes, etc. Astonishing, yes astonishing you don't see this. The relatively low cost of energy is one of the major advantages the USA has had for many decades. It's far more important than China's currency manipulation or almost anything else.
Here's one of millions of articles that you can find on the topic: http://www.pipelineandgasjournal.com/low-natural-gas-prices-create-jobs-spur-economic-growth-across-country
There is that explosion of consumer spending...
Don’t be stupid. Where the economy has been booming....energy has been a major reason. But energy is not the ONLY force in economics, and unless I had said it was, then your rebuttal has no basis, no use, no relevance, no value.
If you don’t understand how lower gas prices spur the economy overall, then I feel sorry for you. Yes, it hurts one sector....helps almost every other sector. And vice versa.
You simply cannot say that high oil prices are good for the oil industry without admitting the other. It makes no sense. It’s logically retarded not to connect these dots.
I ran a fuel dependent contracting business. When gas spiked, we cut back on everything....bought nothing new.......laid people off.....simply tried to ride out the spike. To make it a double whammy, our customers, retailers and developers, also cut back what they were paying us......duh duh duh duh duh.
I’m being factual. I’m showing actual data.
It appears you don’t understand how much of the countries spending is indirect to a prosperous oil industry.
Companies not associated by most with energy are hurting, like Caterpillar and many others.
Since they brought in in the Daisy Bradford in West Penn in 1860. That was the first boom/bust.
Many have tried to corner and control it beginning with Rockefeller and Standard Oil. The first cartel attempt to control it globally(collusion) was in 1915 with Standard Oil of NJ(Exxon), Shell, and Anglo Persian(BP).
Even today in which a sizable portion of the industry is owned/controlled by governments they are still focused on market share and/or revenue
Yep. this is how economics (supply and demand) and money management works, unless governments intervene to prop up oil and gas prices.
Texas has a long history of boom and bust in the oil patch. The smart old timers are making moves which will increase their wealth when the next boom starts. The rest have over extended their debt and will not make it through the bust not owning the assets (because of bank liens) or having the cash reserves to sustain themselves until things get better.
Now is the time to buy and sell assets for many Texas oilmen. In the meantime consumers should enjoy their windfall because prices will probably increase at some point in future. That is my concern. When the oil and gas industry begins to rebound consumers will be impacted and have to absorb the price increases.
Job losses in industry are worse than article notes, as many workers have hours cut way back too. My nephew working for a rig company went from 60 hrs to 20 hrs per week.
Companies do this to preserve talent that would not be there when things improve.
From what I saw in recent figures, that isn't the case.
(And in reality, they do not possess the infrastructure to "flood" the market anyway. They can boost world production by about 1-3 percent if they went all-in, but I'd hardly call that a "flood".)
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