Today, Securing America’s Future Energy (SAFE) released its quarterly update to the Energy Security Fact Pack, a data-driven overview of the latest trends in energy security, including domestic and global oil production, and consumption patterns, oil market dynamics and prices, and up-to-date information on fuel efficiency and alternative fuel vehicles. This Fact Pack contains a number of data points showing the job potential in oil and transportation, key sectors that will be crucial in reducing U.S.’ dependence on petroleum imports.
The U.S. oil industry took major hits during the price downturn that began in 2014, as global supply remained well ahead of demand and OPEC pumped at high levels to undermine competition outside the cartel. With the drop in shale production and a string of bankruptcies, job losses in the U.S. oil sector jumped considerably for almost two years straight. With oil sector employment closely linked to oil production levels and oil prices, between September 2014 and June 2016, roughly one third (or 212,000) of U.S. oil and natural gas industry jobs were lost as low oil prices affected activity and production declined.
The extended period of low prices, which undermined higher-cost producers such as those in the U.S. shale patch, OPEC was able to increase its market share. Between September 2014 and September 2016, OPEC output grew by approximately 2 mbd, giving OPEC more than one percent additional market share.
Although U.S. oil producers have been hurt from increased OPEC market share and having to lay off workers, the longer-term outlook is improving. Just recently, signs of life in shale have re-emerged, with total U.S. crude output rising by about 400,000 barrels per day since its low point in September to the 9 million barrel per day level. This rebound should bring back jobs. The U.S. Energy Information Administration (EIA) expects further increases, forecasting production to average 9.5 mbd in 2018. Amid a strong industry on the back of shale, the Bureau of Labor Statistics (BLS) says employment should continue to rise for the extraction and services sectors. Technology and prices helped oil industry job growth frequently outpace BLS forecasts in recent years. At peak employment in 2014, the shale oil revolution helped create 219,000 jobs, a 180% increase over 2001 levels, most of which was in support services.
Innovation in auto industry to boost jobs
It’s not just the oil industry where technology will foster job growth. The transportation sector also promises opportunities that are not only positive for the labor market but also help the U.S. reduce dependence on oil and imports from OPEC. Sales of plug-in electric vehicles (PEVs) reached historic highs in Q4, propelled in part by a wider selection of new vehicle models. U.S.-based manufacturing of PEV and autonomous vehicle technology is expected to grow significantly. Both will help improve transportation sector efficiency and reduce oil intensity, helping the United States against oil price volatility and OPEC’s actions.
Automakers are increasingly focused on PEV and autonomous vehicle technology. Over the past several months, they have announced the construction of new plants and changes to existing ones set to create thousands of jobs.