Report Contents

Report#:EIA/DOE-0607(99)

Preface

Trends in Power Plant Operating Costs

Sectoral Pricing in a Restructured Electricity Market

Modeling the Costs of U.S. Wind Supply

Modeling Technology Learning in the National Energy Modeling System

Employment Trends in Oil and Gas Extraction

Price Responsiveness in the NEMS Buildings Sector Models

Annual Energy Outlook Forecast Evaluation

National Energy Modeling System/Annual Energy Outlook Conference Summary

Completed Report in
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[1]  Energy Information Administration, Monthly Energy Review, DOE/EIA-0035(99/05) (Washington, DC, May 1999), Table 9.1, p. 111.

[2]  U.S. Department of Labor, Bureau of Labor Statistics, National Employment, Hours, and Earnings, web site http://146.142.4.24/ cgi-bin/srgate: oil and gas extraction, eeu10130001.

[3]  The econometric analysis was performed by Kevin F. Forbes, Science Applications International Corporation.

[4]  Calculated from Energy Information Administration, Annual Energy Review 1997, DOE/EIA-0384(97) (Washington, DC, July 1998), Table 5.19, p. 155.

[5]  Calculated from American Petroleum Institute, 1982 Joint Association Survey on Drilling Costs (Washington, DC, November 1982); and 1997 Joint Association Survey on Drilling Costs (Washington, DC, November 1997).

[6]  Energy Information Administration, Monthly Energy Review, DOE/EIA-0035(99/05) (Washington, DC, May 1999), Table 5.2, p. 83.

[7]  U.S. Department of Labor, Bureau of Labor Statistics, National Employment, Hours, and Earnings, web site http:// 146.142.4.24/cgi-bin/srgate: oil and gas extraction, eeu10130001; Energy Information Administration, Monthly Energy Review, DOE/EIA-0035(99/04) (Washington, DC, April 1999), Table 9.1, p. 111; and Energy Information Administration, Historical Monthly Energy Review, DOE/EIA-0035(73-92) (Washington, DC, August 1994), Table 9.1, p. 250.

[8]  “Firms Adjust to Outlook for Continued Weak Prices,” Oil and Gas Journal (August 19, 1985), pp. 41-44; and Survey of Forecasters (Tulsa, OK: PennWell Publishing Company, various issues, 1988-1998).

[9]  U.S. Department of Labor, Bureau of Labor Statistics, State Employment, Hours, and Earnings, web site http:// 146.142.4.24/cgi-bin/srgate: Alaska, sau0200001130021; California, sau0600001000011, sau0600001100021, sau0600001140021; Louisiana, sau2200001130021; Oklahoma, sau4000001130021; Texas, sau4800001130021. In California the change in upstream employment was assumed to be mining minus metal mining minus nonmetallic minerals. March data are preliminary.

[10]  L. Jones and M. Dermit, “Tough Times for Texas Oil,” Texas Labor Market Review (February 1999), p. 3.

[11]  Texas Workforce Commission, Employment Estimates, web site http://www.twc.state.tx.us/lmi/lfs/type/currentestimates/ currentestimatescurrent.html (March 1999).

[12]  Previous studies have found that the direct effect of increased oil and gas prices is small in the short run but more significant when price increases are sustained. See T. Hogarty and B. Tierney, Jobs and Payrolls in the Petroleum Industry: Description and Analysis of the Declines During 1981-1993, Research Study #077 (Washington, DC: American Petroleum Institute, February 1995).

[13]  A recent analysis of a pooled cross-section time series data set of employment for 40 large oil companies active in the Gulf of Mexico in 1979 and 1989 found that several financial variables were significantly related to levels of employment, including the percentage of institutional stock ownership, change in the value of reserves, debt-to-equity ratio, and the stock price. See V. Baxter, “The Impact of Financial Restructuring and Changes in Corporate Control on Investment and Employment in the U.S. Petroleum Industry,” Sociological Quarterly, Vol. 40, No. 2 (Spring 1999), pp. 269-291.

[14]  A few percent of the vendors for the Mars Tension Leg Platform in the Gulf of Mexico were located in each of the States of California, Illinois, and New York, for example. Private communication, Rich A. Pattarozzi, President, Shell Deepwater Development, June 8, 1999.

[15]  Brown and Hill infer that a $5 decline in oil prices would raise national employment by 0.4 percent, and they find that employment would increase in 40 States. See S.P.A. Brown and J.K. Hill, “Lower Oil Prices and State Employment,” Contemporary Policy Issues, Vol. 6 (July 1988), pp. 60-68.

[16]  Energy Information Administration, Documentation of the Oil and Gas Supply Module (OGSM), DOE/EIA-M063(99) (Washington, DC, February 1999), Chapter 4.

[17]  Survey of Forecasters, Fall 1998, E1046-F98 (Tulsa, OK: PennWell Publishing Company, January 1999); “A Year of Wait-and-See,” World Oil (February 1999), p. 58.

[18]  Calculated from Energy Information Administration, Short-Term Energy Outlook (Washington, DC, June 1999), web site www.eia.doe.gov/emeu/steo/pub/4tab.html, and National Energy Modeling System run AEO99B.D100198A.

[19]  Energy Information Administration, Annual Energy Outlook 1998, DOE/EIA-0383(98) (Washington, DC, December 1997), Table A15, adjusted to 1997 dollars.

[20]  Energy Information Administration, National Energy Modeling System run AEO99B.D100198A.

Figure 1. U.S. Petroleum Industry Employment, 1972-1998.  Source: U.S. Department of Labor, Bureau of Labor Statistics, National Employment, Hours, and Earnings, web site http://146.142.4.24/cgi-bin/srgate. Total calculated from the following series: oil and gas extraction, eeu10130001; petroleum refining, eeu32291001; asphalt paving and roofing materials, eeu32295001; pipelines, excluding natural gas, eeu41460001; petroleum wholesaling, eeu53517001; and gasoline service stations, eeu60554001.

Figure 2. Production and Service Jobs and Wells Drilled, 1970-1998.  Source: U.S. Department of Labor, Bureau of Labor Statistics, National Employment, Hours, and Earnings, web site http://146.142.4.24/cgi-bin/srgate: oil and gas production, eeu10131001; oil and gas services, eeu10138001; Energy Information Administration, Annual Energy Review, DOE/EIA-0384(97) (Washington, DC, July 1998), Table 4.4, p. 93; and Energy Information Administration, Monthly Energy Review, DOE/EIA-0035(99/05) (Washington, DC, May 1999), Table 5.2, p. 83.

Figure 3. Oil and Gas Production by State, 1997.  Source: Calculated from Energy Information Administration, U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 1997 Annual Report, DOE/EIA-0216(97) (Washington, DC, December 1998), pp. 20 and 28.

Figure 4. Changes in Total Civilian Employment and Employment in Oil and Gas Extraction, 1947-1998.  Source: Calculated from U.S. Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, civilian employment, lfu11000000, and National Employment, Hours, and Earnings, oil and gas extraction, eeu10130001, http://146.142.4.24/cgi-bin/srgate.

Figure 5. Oil and Gas Production Jobs, 1972-2010.  Note: “Production” and “service” jobs comprise most of the “extraction” jobs displayed in Figure 1. A few thousand natural gas liquids jobs are also included in “extraction.” Sources: Actual—U.S. Department of Labor, Bureau of Labor Statistics, National Employment, Hours, and Earnings, web site http://146.142.4.24/cgi-bin/srgate: oil and gas production, eeu10131001. Projections—Energy Information Administration, Office of Integrated Analysis and Forecasting.

Figure 6. Oil and Gas Service Jobs, 1972-2010.  Note: “Production” and “service” jobs comprise most of the “extraction” jobs displayed in Figure 1. A few thousand natural gas liquids jobs are also included in “extraction.” Sources: Actual—U.S. Department of Labor, Bureau of Labor Statistics, National Employment, Hours, and Earnings, web site http://146.142.4.24/cgi-bin/srgate: oil and gas services, eeu10138001. Forecasts—Energy Information Administration, Office of Integrated Analysis and Forecasting.