Oil - Loss And Volatility Of Oil Industry Jobs

As mergers in the oil industry restructure companies and make combined operations more efficient, not only are there fewer refineries, there are fewer jobs. From 1982 to 1992, for example, there was a loss of 28% of petroleum refining jobs.

In 1996, after a decade of low oil prices, drilling slowed and the demand for rigs collapsed. New rig construction stopped altogether. Thousands of rigs were left idle, sold for scrap metal, or shipped overseas, and their crews were put out of work. Idle rigs became a source of spare parts for those still operating. In 1997, following a rise in oil prices, the demand for rigs soared, but by 1998 the market for rigs had once again dwindled as oil prices sank. Rising oil prices resulting from OPEC restrictions in 1999 eventually boosted the demand for drilling equipment. Although crude oil prices declined in 2001, they rose again in 2003 and reached an all-time high in late 2004, again spurring demand for oil rigs. According to Baker Hughes Inc., a company that has tallied weekly U.S. drilling activity since 1940, domestic oil drilling has rebounded sharply since late April 1999, when a low point was reached following the oil price collapse of late 1997.

Job loss has also occurred in other facets of the oil industry. The number of seismic land crews and marine vessels searching for oil in the United States and its waters decreased sharply after 1981. From 1982 to 1992, oil-extraction companies lost 51% of their workforce. In Texas, once the center of the U.S. oil industry, jobs plummeted from 80,000 in 1981 to 25,000 in 1996. In 1998 the Texas Comptroller of Public Accounts estimated that for every $1 drop in the price of oil per barrel, 10,000 jobs are lost in the Texas economy. That translated into 100,000 jobs lost in the Texas oil industry from October 1997 to December 1998. According to a February 6, 1999, article in the New York Times ("Oil Industry Sees More Losses"), the oil industry lost 24,415 jobs between November 1997 and February 1999 because of the decline of oil prices during that period. But domestic oil drilling rebounded sharply between mid-1999 and late 2004, creating an upswing in numbers of oil industry jobs.