Image for article titled Oil Companies Are Making Record Profits—but Not More Jobs

The Q2 earnings reports of five major oil and gas companies will be released this week. Shell made a stunning $11.5 billion in profit in the last quarter, smashing its previous record. The industry is expected to make a record $50 billion profit, while ExxonMobil is expected to make its biggest quarterly profit to date. The influx of cash may not translate into more jobs in the U.S. according to new labor numbers.

Despite a short-term burst of jobs over the past few months, the oil and gas industry in Texas, the nation's biggest oil and gas producer, has not changed. Despite a financial windfall over the past few months, jobs in Texas are still behind pre-pandemic numbers.

The industry was behind the curve when it came to production, and now they are trying to catch up. Less hiring means they don't need as many people to create production as they did in the past.

During the early months of the Pandemic, the oil and gas industry was faced with record low prices, including a panicked week where prices for a barrel of oil dipped into the negative. There were 76,300 jobs in the industry in Texas by the September of that year. In the 22 months since, the industry has added just 39,400 of the jobs that were lost. The downturn in oil and gas production is tracked by national statistics. According to an analysis of Bureau of Labor Statistics data by the Energy Workforce & Technology Council, there are over 600,000 jobs in the industry as of this June.

The Texas oil and gas industry has been adding jobs at a rapid pace. The industry will eventually employ as many people as it once did, but that doesn't mean that the pace of growth will continue. Most of the huge profits the industry is raking in right now are going back to the investors who lost money in the last decade. Supply chain and workforce issues have affected all industries. Tech has changed the name of the oil and gas game to make jobs that once required more workers automated or able to be done with less hands.

Over the years there have been a lot of innovations. There is automation going on and a lot of times they are figuring out ways to improve the process in case of drilling.

Major oil producers agree. The company has lost 16,000 workers due to technology shifts as well as trying to cut costs during the Pandemic, according to the company. Many of the jobs that were removed as a result of the changes will not come back.

Pro-oil politicians don't seem to understand the reality that oil and gas companies hire fewer and fewer workers. The Biden administration has been accused of hurting the industry's ability to provide jobs by a group of GOP figures.

Cowan thinks it is a red herring. The industry is figuring out how to do more with less jobs in order to be more efficient. It's not related to Biden. They want to drive as much profit as they can.

It is unsurprising that the GOP would try to make a scapegoat out of the Biden administration's opposition to the industry. Oil companies used public money to shore up payouts for executives instead of re-hiring their workers, even though they received public money to save jobs. The bottom line of the oil industry never changes.