The city of Houston, Texas is well-known for its contributions to the oil and gas industry. From extraction to oil services to machinery, Houston plays an integral role in the energy industry as a whole. The oil industry provides 175,000 Houston-based employees with jobs in production, machinery, and more. Tens of thousands of other individuals are also connected to the industry as suppliers or contractors. According to Forbes, oil-extraction workers based in Houston earn 64.5% of the industry’s payroll in Texas. These workers also earn almost half of the U.S. total payroll for the sector.
The outlook for Houston’s oil and gas jobs, however, may soon witness a decline. According to the Greater Houston Partnership, the industry will lose all of the jobs it’s gained since the beginning of 2019 by the end of this year. The industry seemed to have hit its high point of the year in June, and the number of jobs and rigs has declined since then. Unfortunately, some forecast that numbers will only drop as we approach the end of the year.
The Greater Houston Partnership believes that the industry has witnessed a steep drop in the rig count. Extra capital discipline has made it so that some companies can not receive the funding the need in order to continue drilling. When rigs are not able to find funding, managers are forced to make cuts to staff. As a result, we are seeing an increasing number of layoffs, and the number is only projected to grow.
These factors don’t only impact the short-term growth of the oil and gas industry, but may also influence long-term success. Some leaders doubt that we will never see as high employment rate as we did back in 2014, when the industry was at an all-time high. At the end of 2014, the industry employed about 300,000 people. When you compare that number to the current 153,000 oil and gas employees, the number is grim. Today’s number of employees includes those working in exploration, engineering, manufacturing, and more.
Although Houston’s oil industry has defined the city in the past, times are changing. Uncertainty approaches with funding cuts and job losses. Houston may very well transition to more of headquarters city and technical center rather than a place for drilling. The industry has proven to be adaptable, and we will soon be in the process of finding out what the future holds.