Texas is set to break its oil production record this year, but the oil industry’s drive to cut costs and increase efficiencies is now enabling drillers to pump record volumes of oil with fewer workers—the current workforce numbers are roughly the same as they were in 2011, according to petroleum economist Karr Ingham of the Texas Alliance of Energy Producers.
Texas drillers are pumping more oil with about 50 percent fewer rigs and about 25 percent fewer employees than at the peak in late 2014, Ingham said last week at the presentation of his Texas Petro Index that measures the oil economy in Texas taking into account rigs, employment, production, and oil prices.
“I don’t see how we don’t break this record in 2018,” Ingham said, expecting Texas oil production to beat the previous record from 1972.
Ingham predicts that both Texas and the United States as a whole will break oil production records. For the Lone Star State, Ingham predicted total production of 1.423 billion barrels this year, or around 3.9 million bpd, beating the record of 1.263 billion barrels (3.46 million bpd), set in 1972.
Now oil companies are doing more with less, and not all jobs lost during the downturn will return to the sector. Oil companies could extract oil with 75,000 fewer workers than at the peak of the previous boom in 2014, when some 300,000 people worked in the oil industry. Related: Cold Snap Heats Up Natural Gas Prices
“What are the chances it’s going to get back to that level anytime soon?" Ingham told the Houston Chronicle. “Pretty slim, frankly,” he added.
According to the Dallas Fed, Texas oil and gas employment expanded in November by 1,600 jobs to around 222,600, with most of the increase coming from support activities for mining. Since January 2017, support activities for mining have added 24,900 jobs, while oil and gas extraction has only added 1,300 jobs. Total U.S. oil and gas employment rose in November by 3,500 jobs to around 413,400, with Texas accounting for 54 percent of the total.
While employment has been rising in Texas oil over the past year, the numbers now are roughly the same as in 2011, economist Ingham said.
By Tsvetana Paraskova for Oilprice.com
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