Record Permian Basin production fuels Texas oil, natural gas job growth
(The Center Square) – The Texas oil and natural gas industry has maintained its status as a behemoth in U.S. in energy production, adding jobs and breaking production records despite federal policies attempting to stifle it.
Upstream jobs grew by an additional 2,200 jobs in October, largely fueled by record Permian Basin production. October’s job growth also represented a 9.9% increase from October 2022, according to the data.
Over 16,500 jobs in the upstream sector were added this year, with current upstream employment totaling around 212,900 jobs.
“In spite of turbulent economic times and increasing geopolitical tensions, Texas’ oil and natural gas industry continues to grow,” Todd Staples, president of the Texas Oil & Gas Association, said. “The industry remains committed to continuing to produce affordable, reliable energy to provide energy security for our nation and our allies around the world.”
TXOGA notes that since the COVID-low point of September 2020, the industry has added or recovered 55,900 jobs, averaging growth of 1,511 jobs a month.
Months with an increase in upstream oil and natural gas employment outnumbered months with a decrease by a margin of 32-to-5.
The upstream sector includes oil and natural gas extraction and some mining. It excludes the sectors of refining, petrochemicals, fuels wholesaling, oilfield equipment manufacturing, pipelines, and gas utilities, supporting hundreds of thousands of additional jobs. The Texas oil and natural gas industry pays among the highest wages in Texas, with an average salary of roughly $115,000 in 2022.
The employment data “yet again indicated strong job postings for the Texas oil and natural gas industry during the month of October,” the Texas Independent Producers and Royalty Owners Association (TIPRO) said.
According to its analysis, there were 10,843 active unique jobs postings last month, including 3,965 new jobs listed. Texas, by a wide margin, has the greatest number of oil and natural gas jobs in the country. California had 3,066 unique job postings last month, followed by Oklahoma’s 1,512, Louisiana’s 1,409 and Pennsylvania’s 1,041. Nationwide, there were over 47,517 unique job postings listed in the sector last month, TIPRO found.
The Texas Comptroller also reported that Texas oil and natural gas producers paid more in taxes and royalties last month than they did in October 2022: $586 million in oil production taxes (8% increase) and $192 million in natural gas production taxes.
Texas’ production and employment gains are fueled in large part by west Texas production in the Permian Basin. The U.S. Energy Information Administration (EIA) projects that producers in the Permian, the top shale-producing region in the U.S., will pump a record 5.98 million barrels per day (bpd) in December.
This is a marked reversal from previous projections estimating a decline.
Natural gas production in the Permian is also expected to increase next month, reaching 24.86 billion cubic feet per day (bcf/d), higher than 24.75 bcf/d, expected to be produced this month.
The EIA also projects a decline in output in other basins nationwide before the end of 2023.
“We are pleased to see continued growth in employment, production and direct economic contributions from the Texas oil and natural gas industry,” TIPRO president Ed Longanecker said. “Market volatility will continue due to competing factors, including inflationary pressures and geopolitical tensions, but we expect global supply to remain tight and demand growth to continue, supported in large part by the state of Texas.”
He also points out that, despite record production in Texas a number of factors that include conflict in the Middle East and OPEC+ countries cutting supply, oil prices are expected to go up in early 2024.
He also projects that “Russian and Iranian supply will largely remain flat in 2024, with Russia expected to maintain its mid-2023 production despite facing new U.S. sanctions over price cap violations. Iran may see a small increase in crude production as it continues to export to China. However, with insufficient upstream investment, sanctions on their crude oil and limited oil consumption growth in China, production in Iran will also remain limited.”
“The West Texas Index forecast of $75-$80/barrel for the rest of the year, points in part to continued uncertainty in the market,” he said. This is because of inflation and “poorly conceived U.S. energy policy and federal fiscal policy having its desired economic dampening effect on consumer spending, which will continue to play out in early 2024,” he said in a statement emailed to The Center Square.
Natural gas demand in the U.S. “remains bullish,” he adds, with LNG exports continuing to increase in the long-term.
Despite the Biden administration’s relentless attacks on the industry, Longanecker emphasized, TIPRO expressed its “sincere gratitude to the hundreds of thousands of hardworking men and women in the Texas oil and natural gas industry for providing the critical energy needed to meet growing demand here and abroad and the outsized contributions from an economic and national security perspective.”
