November 24, 2022 [HoustonChronicle] – Texas continued to add oil and gas jobs in October, a sign that energy companies expect global demand for oil will remain strong as a supply crunch continues to keep prices high.
Oil and gas companies added 2,800 jobs last month, according to an analysis of Texas Workforce Commission data from industry trade group the Texas Oil and Gas Association (TXOGA). Employment in the state’s upstream sector, which includes extraction and production, reached 207,000 in October, a more than 20 percent increase from the 170,500 jobs at the same time last year.
The group also said September numbers were revised upward from 900 to 2,200 jobs added.
“Texas oil and natural gas producers are steadily adding jobs as our state’s economy continues to strengthen even amidst high inflation,” said Todd Staples, president of the Texas Oil & Gas Association.
Businesses have been reporting increasing costs for resources due to inflation, according to a survey of energy executives from the Dallas Fed in September, and expect those cost pressures to continue into next year.
Earlier this year when Russia invaded Ukraine it pushed up oil prices to multi-year highs. The war also exacerbated supply chain issues lingering from the pandemic, making it harder for companies to get needed resources. Inflation has meant when they are able to secure parts and equipment, they’re paying more than in recent years.
Companies also told the Dallas Fed they’re still short on workers. Another industry group, the Texas Independent Producers and Royalty Owners Association (TIPRO), analyzes job postings for work in oil and gas. It said right now in Texas there are over 1,500 postings for petroleum extraction jobs and another 3,800 for support services for oil and gas.
Still, companies have managed to add around 50,000 upstream jobs in Texas since the lows experienced during the COVID-19 downturn, according to TXOGA. Since September 2020, which the group defines as the COVID-low point, the upstream sector has averaged growth of 2,000 jobs per month.
While the industry has added jobs since drilling came to a near standstill in 2020 due to the pandemic, analysts say growth has been more measured as companies respond to demands for capital discipline from investors. Jobs have climbed back above 200,000 in Texas this year thanks to high oil prices, but when oil was over $100 in 2014 the state employed more than 300,000 people in the upstream sector.
Even with high prices this year, companies have chosen to mostly stick with planned production schedules, resulting in record profits. That’s allowed companies to offer bigger payouts to investors, many of whom were burned by companies overspending in shale basins during the past decade. Investors have pressured companies to focus less growth and more on increasing efficiency and shareholder returns.