U.S.

Analysis: Texas, Louisiana cities dominate list of those hit hardest by drop in oil prices

The COVID-19 pandemic has sent the world economy into turmoil as lockdowns around the world have caused economic activity to grind to a halt. The demand for oil has crashed in the wake of the growing pandemic, sending oil prices diving and even dipping below $0 per barrel. According to the most recent data from the U.S. Census Bureau, the U.S. employs close to 130,000 people in the oil and gas extraction industry. Many of these workers now face uncertain employment.

Bureau of Labor Statistics (BLS) data from the last two decades shows that employment in the oil and gas sector tends to rise and fall with crude oil prices. Price drops in 2014 resulting from oil surpluses caused the oil and gas sector to shed roughly a third of its workforce. Today, the pandemic combined with a lack of storage capacity for excess oil have caused the price to fall sharply again – a trend that threatens thousands of jobs.
The concentration of oil and gas extraction workers varies widely by location. At the state level, Oklahoma and Wyoming have the highest concentrations of workers in oil and gas extraction at 7.7 and 6.7 times the national average respectively. Texas, with a relative concentration of 5.8 times the national average, boasts the largest number of total oil and gas workers of any state. Many states such as Hawaii, Maine, and Rhode Island don’t produce oil or natural gas and have no employees reported by the Census Bureau.
To find the metropolitan areas hit hardest by the drop in oil prices, researchers at Construction Coverage used data from the U.S. Census Bureau and the Bureau of Economic Analysis. The researchers ranked metro areas according to the relative concentration of employment in the oil and gas extraction industry. Researchers also looked at the total number of oil and gas extraction workers, the median earnings for those workers, and cost of living.

To improve relevance and accuracy, only metropolitan areas with at least 100,000 people were included in the analysis. Here are the U.S. metropolitan areas with the highest concentrations of oil and gas workers.
Metros With the Highest Concentration of Oil and Gas Workers:

25. Charleston, WV
Relative concentration of oil and gas workers: 2.3 times the national averageNumber of oil and gas workers: 151Total number of workers: 79,033Median earnings for oil and gas workers: $90,000Cost of living: 14% below average.

24. Baton Rouge, LA
Relative concentration of oil and gas workers: 2.4 times the national averageNumber of oil and gas workers: 760Total number of workers: 393,009Median earnings for oil and gas workers: $80,000Cost of living: 7% below average.

23. State College, PA
Relative concentration of oil and gas workers: 2.4 times the national averageNumber of oil and gas workers: 153Total number of workers: 76,627Median earnings for oil and gas workers: $65,000Cost of living: 3% above average.

22. Pittsburgh, PA
Relative concentration of oil and gas workers: 2.7 times the national averageNumber of oil and gas workers: 2,514Total number of workers: 1,144,232Median earnings for oil and gas workers: $75,000Cost of living: 6% below average.

21. Lubbock, TX
Relative concentration of oil and gas workers: 2.9 times the national averageNumber of oil and gas workers: 359Total number of workers: 151,707Median earnings for oil and gas workers: $86,000Cost of living: 7% below average.

20. Roanoke, VA
Relative concentration of oil and gas workers: 3.1 times the national averageNumber of oil and gas workers: 397Total number of workers: 158,089Median earnings for oil and gas workers: Not availableCost of living: 10% below average.

19. Santa Maria-Santa Barbara, CA
Relative concentration of oil and gas workers: 3.5 times the national averageNumber of oil and gas workers: 618Total number of workers: 213,397Median earnings for oil and gas workers: $70,000Cost of living: 10% above average.

18. Morgantown, WV
Relative concentration of oil and gas workers: 3.5 times the national averageNumber of oil and gas workers: 193Total number of workers: 66,346Median earnings for oil and gas workers: $72,000Cost of living: 9% below average.

17. Denver-Aurora-Lakewood, CO
Relative concentration of oil and gas workers: 3.6 times the national averageNumber of oil and gas workers: 4,899Total number of workers: 1,677,095Median earnings for oil and gas workers: $85,000Cost of living: 6% above average.

16. Bismarck, ND
Relative concentration of oil and gas workers: 4.1 times the national averageNumber of oil and gas workers: 259Total number of workers: 76,382Median earnings for oil and gas workers: $100,000Cost of living: 7% below average.

15. Bakersfield, CA
Relative concentration of oil and gas workers: 4.3 times the national averageNumber of oil and gas workers: 1,228Total number of workers: 348,917Median earnings for oil and gas workers: $120,000Cost of living: 4% below average.

14. Shreveport-Bossier City, LA
Relative concentration of oil and gas workers: 4.4 times the national averageNumber of oil and gas workers: 645Total number of workers: 179,726Median earnings for oil and gas workers: $58,000Cost of living: 11% below average.

13. Tyler, TX
Relative concentration of oil and gas workers: 5.0 times the national averageNumber of oil and gas workers: 423Total number of workers: 103,429Median earnings for oil and gas workers: $100,000Cost of living: 6% below average.

12. Amarillo, TX
Relative concentration of oil and gas workers: 5.1 times the national averageNumber of oil and gas workers: 522Total number of workers: 125,842Median earnings for oil and gas workers: $100,000Cost of living: 7% below average.

11. College Station-Bryan, TX
Relative concentration of oil and gas workers: 5.3 times the national averageNumber of oil and gas workers: 460Total number of workers: 105,264Median earnings for oil and gas workers: $60,000Cost of living: 7% below average.

10. Houma-Thibodaux, LA
Relative concentration of oil and gas workers: 5.4 times the national averageNumber of oil and gas workers: 447Total number of workers: 100,206Median earnings for oil and gas workers: $95,000Cost of living: 10% below average.

9. Lafayette, LA
Relative concentration of oil and gas workers: 5.6 times the national averageNumber of oil and gas workers: 1,085Total number of workers: 238,332Median earnings for oil and gas workers: $111,000Cost of living: 12% below average.

8. San Angelo, TX
Relative concentration of oil and gas workers: 5.9 times the national averageNumber of oil and gas workers: 273Total number of workers: 56,396Median earnings for oil and gas workers: $125,000Cost of living: 7% below average.

7. Anchorage, AK
Relative concentration of oil and gas workers: 6.1 times the national averageNumber of oil and gas workers: 1,124Total number of workers: 223,143Median earnings for oil and gas workers: $130,000Cost of living: 8% above average.

6. Fort Collins, CO
Relative concentration of oil and gas workers: 7.1 times the national averageNumber of oil and gas workers: 1,078Total number of workers: 185,707Median earnings for oil and gas workers: $80,000Cost of living: 2% above average.

5. Oklahoma City, OK
Relative concentration of oil and gas workers: 7.7 times the national averageNumber of oil and gas workers: 4,577Total number of workers: 721,064Median earnings for oil and gas workers: $95,000Cost of living: 9% below average.

4. Corpus Christi, TX
Relative concentration of oil and gas workers: 8.1 times the national averageNumber of oil and gas workers: 1,451Total number of workers: 217,105Median earnings for oil and gas workers: $70,000Cost of living: 6% below average.

3. Odessa, TXRelative concentration of oil and gas workers: 10.0 times the national averageNumber of oil and gas workers: 621Total number of workers: 75,980Median earnings for oil and gas workers: Not availableCost of living: 4% below average.

2. Houston-The Woodlands-Sugar Land, TX
Relative concentration of oil and gas workers: 13.1 times the national averageNumber of oil and gas workers: 35,927Total number of workers: 3,335,536Median earnings for oil and gas workers: $120,000Cost of living: 2% above average.

1. Midland, TX
Relative concentration of oil and gas workers: 88.1 times the national averageNumber of oil and gas workers: 6,567Total number of workers: 90,888Median earnings for oil and gas workers: $85,000Cost of living: Average
Many of the locations with the highest concentration of oil and gas extraction workers are located in Texas, which is the leading producer of crude oil in the country. Texas employs over 65,000 workers in the oil and gas extraction industry, about half of the national total. The recent oil market crash will disproportionately hurt Texas cities and other locations with large oil and gas industries.
Oil and gas workers tend to have high median earnings—on average workers in the metros with the highest concentrations of oil and gas workers earn over $90,000 per year. Workers in these metros also tend to enjoy a lower cost of living.

To determine the cities hit hardest by the drop in oil prices, researchers at Construction Coverage analyzed the latest data from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS) and the Bureau of Economic Analysis’s Regional Price Parity (RPP) data. Using ACS PUMS data, the researchers ranked metros according to the relative concentration of workers in oil and gas extraction. In the event of a tie, the city with the larger share of employment in oil and gas extraction was ranked higher. Researchers also calculated the total number of oil and gas extraction workers, the median earnings for oil and gas extraction workers, and the cost of living. Median earnings is defined as the median wage and salary income for oil and gas extraction workers. Cost of living compared to the national average comes from the RPP.
To improve relevance, only metros with at least 100,000 people were included in the analysis. Due to the way the U.S. Census Bureau conducts this survey combined with low numbers of oil and gas workers in certain locations, there are sometimes large margins of error associated with the employment estimates. While the relative concentrations are directionally accurate, the absolute number of oil and gas workers (especially for some of the smaller locations) could be different from the actual number.

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