A bright spot for jobs

Aug. 15, 2011
Although less-than-stellar US employment figures have been announced on a regular basis for a couple of years, there is some good news regarding jobs numbers in one area.

Marilyn Radler
Senior Editor-Economics

Although less-than-stellar US employment figures have been announced on a regular basis for a couple of years, there is some good news regarding jobs numbers in one area.

The expansion of oil and gas operations in Texas has led to a jobs milestone, according to a monthly index that follows such employment.

The Texas Alliance of Energy Producers, the Wichita Falls-based association of independent oil and gas producers in the state, announced the new numbers in its latest Texas Petro Index (TPI), released on July 25.

An 18-month-long expansion of the Texas oil and gas economy has propelled estimated petroleum industry employment beyond a level reached in late-2008, contributing to the creation of about two thirds of all jobs added in the state in the past year, according to the latest TPI.

Texas' postrecession job growth has been among the strongest in the US, and the oil and gas industry in Texas deserves most of the credit for that, noted Karr Ingham, the economist behind the TPI.

Total oil and gas industry employment in Texas in June reached an estimated 224,200, up nearly 15% from June 2010. This marked the first time more Texans worked in the state's oil and gas industry than in October 2008, at the peak of the industry's last boom, when Texas Workforce Commission estimated the count at 223,200, according to the TPI.

"In the past 12 months, the industry has added more than 28,600 jobs, which is nearly 13% of all jobs added to the Texas economy," Ingham said. "That's really an accomplishment, considering the TPI in June indicates the industry still has not recovered to the level of economic health that created the last jobs milestone," he said.

Ingham added that more importantly, when a conservative multiplier of 5.0 is used to model the direct, indirect, and induced effects of petroleum industry employment on the statewide economy, one discovers that industry activity accounted for 66% of total job growth in Texas over the past 12 months.

A composite index based on a comprehensive group of upstream economic indicators, the TPI increased in June for the 18th consecutive month to 243.5, from a low in December 2009 of 186.6. The TPI peaked at 286 in both September and October 2008.

Other indicators

Some other indicators from the TPI for June include the following:

• Crude oil production in Texas totaled 34.1 million bbl, up 0.4% from June 2010. Crude production in this year's first 6 months totaled nearly 211 million bbl, a 3.5% increase.

• The value of oil produced in Texas was nearly $3.16 billion, 29.5% more than a year earlier. The value of Texas crude produced during the first 6 months of 2011 totaled more than $20 billion, up 31.3% compared with first-half 2010.

• Natural gas output in Texas was almost 576.5 bcf, a year-over-year monthly decline of about 6.1%. Texas operators in first-half 2011 produced more than 3.47 bcf of gas, down about 6.5% from a year earlier.

• The value of Texas-produced gas totaled $2.46 billion, up 0.2% from June 2010, whereas the value of gas produced by Texas operators in this year's first half totaled nearly $14.4 billion, a decline of more than 17%.

• The Baker Hughes Inc. count of active drilling rigs in Texas averaged 839, up 26.5% from June 2010, when an average of 663 rigs were active. The number of rigs working in Texas during first-half 2011 averaged 780 units. Drilling activity in Texas peaked in September 2008 at a monthly average of 946 rigs before falling to a trough of 329 in June 2009.

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