JUST KEEP DRILLING Between September 2021 and February 2022, the number of active rigs in the U.S. increased by 128, according to the U.S. Energy Information Administration. According to energy technology company Baker Hughes’ website, the active drilling rig counts are an “important business barometer for the drilling industry and its suppliers.”
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the pandemic’s onset in March 2020, Gilmer said. Although 90% of total payroll employment has since returned to the Houstonmetro, 35,500 oil and gas jobs were lost, 10,100 of which have returned. The northwest portion of the Greater Houston area—which includes Spring and Klein—has a higher percentage of oil and gas-relatedmanufacturing jobs, said Bobby Lieb, president and CEO of the Houston Northwest Chamber of Commerce. According to Lieb, manu- facturing accounts for more than 10% of jobs in northwest Houston. “Oil and gas is ... still a very import- ant sector to our part of the city,” Lieb said. “Manufacturing is ticking back up. It’s the slowest [sector] to recover, but it is ticking back up.” As the oil and gas industry recov- ers, ExxonMobil announced Jan. 31 it will be relocating its headquarters to City Place in Spring. The existing 385-acre campus can accommodate up to 10,000 employees and visitors, although the number of employees that will be transferring as part of the move has yet to be announced. Employment bouncesback As of March 2022, the unemploy- ment rate for the Houston-Sugar Land-Baytown area was 4.4%, according to the U.S. Bureau of Labor Statistics—down from 13.3% in April 2020. However, the U.S. Bureau of Labor Statistics reported 15,535 fewer Harris County residents worked in the natural resources and mining industry—which includes oil and gas jobs—in September 2021 compared to December 2019. Locally, data shows the decline was
NUMBER OF ACTIVE RIGS IN THE U.S.
636
601
650
579
569
600
538
508
Active rig count in the U.S. increased by more than 25% between September 2021 and February 2022. ACTIVE RIG COUNT
550
500
450
0
Sept. 2021
Oct. 2021
Nov. 2021
Dec. 2021
Jan. 2022
Feb. 2022
SOURCES: U.S. ENERGY INFORMATION ADMINISTRATION, BAKER HUGHES COMMUNITY IMPACT NEWSPAPER
Local energypresence On Jan. 31, ExxonMobil announced its corporate headquarters will be relo- cating by mid-2023 to its City Place campus, which was built in 2014. ExxonMobil did not respond to requests for comment as of press time, but according to the compa- ny’s Jan. 31 news release on the deci- sion, the move will “enable closer teamwork to accelerate and increase value delivery through company- wide approaches.” “Our transformed business struc- ture enables us to more fully leverage the corporation’s scale, integration, technology advantages, and the skills and capabilities of our talented work- force to better serve our customers,” ExxonMobil Chair and CEO Darren Woods said in a statement. As oil and gas workers face a lack of jobs in the industry overall, some com- panies, such as pipeline maintenance rm Coastal Chemical Co. in Spring, are having a hard time nding quali- ed candidates, according to Houston Operations Manager Christopher Bugg. “We are facing a labor shortage, as it is di cult to nd people that want to do this work. ... It’s causing a backlog of projects that can’t be completed as scheduled, and some are having to be canceled,” Bugg said. According to Steven Kahla—the busi- ness department dean at Lone Star College-University Park, as automation is added into the oil and gas industry during economic downturns, a lot of companies are also having a hard time getting employees to return. “You lay somebody o two or three times, and you call them again to come back, and [employees] are like, ‘You
present prior to the pandemic, as 6.2% of workers living in the Spring and Klein area’s nine ZIP codes worked in oil and gas extraction or manufactur- ing in 2020, down from 7.6% in 2015, according to U.S. Census Bureau data. Although oil and gas job creation has lagged since the pandemic’s onset, the industry’s market has improved. Energy technology company Baker Hughes did not respond to a requests for comment, but according to the company’s website, the active drilling rig counts are an “important business barometer for the drilling industry and its suppliers.” As of April 29, the U.S. oil rig count was 698—a year-over-year increase of 258 rigs. Since this year’s escalation of the Russia-Ukraine war began in Febru- ary, U.S. gas prices have risen. The war pushed oil prices from about $80.33 per barrel in January to almost $90 per
barrel by the end of the month, accord- ing to the U.S. Energy Information Administration. For the second quarter of 2022, the EIA expects oil will average at $116 per barrel and gasoline will hit a national average of $4.10 per gallon. “The $100[-per-barrel] oil price [is] a product partly of a war in Ukraine and partly a failure of the oil industry around the world to invest in new oil and gas production,” Gilmer said. However, Gilmer noted the increas- ing oil prices are not factoring into local job growth. Following a crash in 2014, Gilmer said the industry shifted to a new nancial model that involves pay- ing dividends to investors instead of diverting revenue to job growth. Additionally, Lieb noted many com- panies in the industry have adopted technology to help with pro tability, and as a result, not all jobs lost during downturns will return to the industry.
PRICES ON THE RISE Over the last year, the price of oil per barrel has been on the rise. For the second quarter of 2022, the U.S. Energy Information Administration forecasts oil will hit $116 per barrel.
PRICE OF OIL PER BARREL
Second quarter 2022 forecast: $116
$120
$100
$80
$89.41
$60
$62.80
$40
$20
$0
Nov. 2021
Q2
May 2021
June 2021
July 2021
Aug. 2021 Sept. 2021 Oct. 2021
Dec. 2021
Jan. 2022
Feb. 2022
SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION COMMUNITY IMPACT NEWSPAPER
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