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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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A U.S. Shale Job Boom Is Coming

  • Energy research firm Rystad Energy believes the U.S. shale patch is set for a job boom, with wages for shale workers set to grow through the end of 2024.
  • The average wage growth is forecast to be between 2.5% and 7.2% in 2023 and 2024, which will contribute to higher costs for operators.
  • Executives have warned that a tight labor market, high wage pressures, and supply-chain issues are adding pressure to drilling activities.

Rising oil and gas production in the U.S. shale patch is expected to bring higher wages for workers in the sector as companies need to attract more labor in an already tight market, energy research firm Rystad Energy says.  

Wages are set to grow through the end of 2024, due to the tight labor market, retirements in the industry, and competition from clean energy jobs, Rystad Energy said in a new report quoted by the Journal of Petroleum Technology.   

Average wage growth is expected at 2.5% and 7.2% in 2023 and 2024. Wages have already grown in the key shale basins, including the Permian, the Eagle Ford, Haynesville, Williston, and Appalachia, according to Rystad Energy. Those areas saw on average over 9% growth in wages in 2022.

The growth in wages has increased the budgets of the operators in the shale patch and contributed to cost inflation.

According to the Dallas Fed Energy Survey for the first quarter, executives at Permian operators saw oil and gas expansion stall amid surging costs and worsening outlooks.

The aggregate wages and benefits index edged higher, to 43.6 from 40.2, according to the survey.

Asked about what changes they expect in the workforce at their company from December 2022 to December 2023, more than half of the executives — 55% —expect their headcount to remain unchanged from December 2022 to December 2023. However, 37% of executives expect the number of employees to increase, of which 4% expect a significant increase and 33% anticipate a slight increase. Only 8% anticipate the number of employees decreasing over the period, according to the survey.

Whereas the most-selected response among E&P firms was for employment to “remain the same” in 2023, the most-selected response of support service firms was for employment to “increase slightly” in 2023, the poll found.

One executive at a services firm said in comments to the survey, “Regulatory uncertainty is a major overhang. Labor remains tight, with continued wage pressures. Supply-chain issues remain.”  

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on April 18 2023 said:
    We have been hearing about a comeback by US shale oil production since the pandemic decimated it. Excuses for failure of the shale oil to lift production have been ranging from rising costs to capital discipline, a drop in well profitability, declining oil rigs and low crude prices. The unvarnished truth is that shale oil is a spent force incapable of lifting production meaningfully.

    No amount of hype by the likes of the US Energy Information Administration (EIA), the IEA and Rystad Energy could change this fact.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • Terrel Shields on April 18 2023 said:
    As long as pipe is short supply and extra expensive, let along rig costs, there is a real headwind to adding to supply. I expect to see an expansion of drilling eventually but we need to stop wasting gas by flaring and concentrate on converting more gasoline vehicles to natural gas or propane.

Leave a comment




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