Report: Productivity Gains Have Driven Headcount Losses in the Oil Patch

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A new report from the Institute for Energy Economics and Financial Analysis provides an interesting perspective on the relationship between productivity/efficiency improvements in the oil and gas industry and total employment. The report points out that total industry headcount fell 20% from 2014 to 2024 and suggests that payrolls could fall to below pre-shale drilling (2006) levels by 2026. Unfortunately, the report doesn’t provide the corresponding data for production, although you can glean it from the employees per 1000 barrel ratio that is cited. According to the report, efficiency gains from “technological advances in equipment and processes” cut the number of employees needed to produce a barrel of oil by 50% from 2014 to 2024. Finally, the report references data from the Dallas Fed which indicates that regions with a high concentration in oil and gas extraction have underperformed the US both in terms of employment and wage growth.


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