The U.S. Has Lost More Than 100,000 Oil and Gas Jobs
The US oil and gas labor market is among the world’s most severely hit by the downturn that the COVID-19 pandemic has brought, a Rystad Energy analysis of the latest data from the US Bureau of Labor Statistics (US BLS) reveals. More than 100,000 oil and gas jobs have already been lost in total, with most of them coming from the support activities market.
The data shows that the four oil and gas segments most affected are support activities for oil and gas operations (44,550 jobs cut from a pre-COVID-19 level of 233,550), pipeline and gas and related construction (16,000 jobs cut from 227,000), drilling of oil and gas wells (13,450 jobs cut from 79,450) and oil and gas extraction (9,600 jobs cut from 156,600).
In addition to the above four segments from the US BLS, Rystad Energy has included more components of the oil and gas industry chain, thus independently estimating the total job cuts to exceed 100,000 to date. The support activities segment in particular reveals a staggering employment slump of 20% compared to February’s pre-COVID-19 levels.
Heavy construction labor demand in the US increased by 3.4% in May, but the oil and gas industry did not contribute to this increase. Since the outbreak of the pandemic in the US in early February, oil and gas construction jobs have decreased by more than 10%. We believe this sector within the oil and gas industry will take a more cautious approach to new construction activity, waiting for the safety risks associated with COVID-19 to recede.
While onshore construction workers can social distance and execute their tasks on duty, issues arise during tool-box talks, mid-morning, lunch, and mid-afternoon breaks. Spreading out the times for breaks and installing additional breakout trailers to minimize the risk from these situations can result in increased indirect costs.
In addition to battling the safety risks with ongoing work, various large operators are now delaying or pulling out of new facility construction. In Louisiana alone, more than 40% of liquefied natural gas (LNG) investments scheduled for this year have been postponed or canceled.
Some parts of the US have been affected more than others. Texas has lost more than 45,000 jobs in its upstream sector since February 2020. Similarly, Louisiana will likely see a decline of nearly 25% in its total oil and gas workforce, according to the Louisiana Oil and Gas Association.
