New Study: Gas and Oil Drilling Doesn’t Create Very Many Jobs

Fossil fuel industry groups always emphasize how many jobs rely on oil and gas drilling. A new study shows they’re lying.

Natural gas drilling equipment on the Pinedale Anticline, Wyoming, on June 17, 2008. (Richard Waite / World Resources Institute via Flickr)

The oil and gas industry routinely claims that it employs millions of Americans as a way to perpetually delay action on climate change. New research shows it’s a total lie.

In 2020, the American Petroleum Institute (API), Washington’s top oil and gas lobby, published a study asserting that a national ban on fracking and federal oil and gas leasing could cost a whopping 7.5 million US jobs. Another API report in 2021 claimed that the oil and gas industry directly employs 2.5 million people.

According to a new analysis by the corporate watchdog Food and Water Watch, the actual number of people directly employed by the fossil fuel industry is only about half a million. Moreover, the Food and Water Watch report shows that the fossil fuel industry has been shedding jobs for years, even with oil and gas output at record levels.

The new report is the latest and most extreme example of how the fossil fuel industry has regularly inflated jobs numbers to falsely suggest that taking much-needed climate action amounts to a war on workers.

In reality, oil and gas companies have gotten ever better at doing their jobs — burning fossil fuels — with fewer and fewer employees. Oil and gas production increased in the United States by a third between 2014 and 2020. In that same time period, employment in those sectors has fallen by a third, too.

“While oil and gas production has overall increased, jobs have not increased in tandem,” explained Oakley Shelton-Thomas, a senior researcher at Food and Water Watch who worked on the report. “So, we’re presented with the idea that there’s a choice between, we have pollution and we also get jobs, but in reality we’re getting more pollution and fewer jobs.”

The Food and Water Watch report presents a very different picture of employment in the fossil fuel industry than the one industry groups like the API have provided to further their political aims.

In February 2020, as Democratic presidential candidates were debating a fracking ban, API released a study finding that banning federal leasing and fracking could cost 7.5 million jobs.

The report, entitled “America’s Progress at Risk,” warned that nearly 5 percent of America’s workforce could lose their jobs by 2022 if these policies were implemented. In truth, only about 0.5 percent of the American workforce is involved in oil and gas. The inflated numbers, according to the Food and Water Watch report, may come from “what appear to be basic arithmetic errors such as double counting and the inclusion of entirely unrelated jobs in their estimates.”

For example, people employed at gas stations — including those who work in the convenience stores attached to gas stations — constituted about half of the jobs that the API said were “directly” tied to the oil and gas industries.

“With regards to the impact of a federal leasing and drilling ban, the 7.5 million number reflects the economy-wide employment impact, not just jobs lost directly in the natural gas and oil industry but across the supply chain as well as jobs lost in other sectors due to higher energy costs,” an API spokesperson told us.

But experts suggest curbing fossil fuels won’t necessarily lead to the end of gas stations. Electric vehicles will need to be charged, and the vast majority of gas station jobs are in food and retail.

That’s true of other jobs API has claimed are dependent on oil and gas drilling, such as organic chemical and fertilizer manufacturing. Fossil fuels are used in the manufacturing process, but aren’t intrinsic to the production of certain chemicals or fertilizers.

“The broad trend is that these industries use oil and gas products as inputs in their industrial processes. But it’s not necessary to use hydrocarbons as inputs,” said Shelton-Thomas. “A bunch of the manufacturing jobs they include are far afield from oil and gas production.”

Meanwhile, “indirect” jobs, and “induced jobs,” or jobs within the oil and gas supply chain or whose wages are supported by oil and gas, account for nearly three-quarters of the jobs that oil and gas companies are claiming their industry provides.

The fossil fuel industry has weaponized these inflated job numbers to delay a transition to renewable energy.

“The oil and gas industry uses promises of employment to gain political leverage, which has impeded the necessary transition to clean, renewable energy,” said Shelton-Thomas.

These promises have informed media narratives and political discussions around climate policy.

During the 2020 Democratic presidential primaries, corporate media spent months railing against Democratic presidential candidates who promised to ban fracking, arguing that such a job-killing position would amount to “political suicide,” especially in Pennsylvania.

One such New York Times article cited an API-provided statistic that fracking “supports more than 350,000 related jobs” in Pennsylvania. But according to the Bureau of Labor Statistics, only about 25,000 people were employed in the fossil fuel industry in Pennsylvania in 2020. And oil and gas jobs in Pennsylvania declined by more than 20 percent in 2020, even while the state produced record amounts of natural gas, according to the Food and Water Watch report.

This is all part of a national trend. Not only have oil and gas companies overstated how many jobs they create, but their job numbers have presented a dishonest narrative of how the boom in domestic fracking has actually impacted the American economy.

Part of the reason for those job losses is automation in the fossil fuel industry, including through collaborations with tech companies to make humans obsolete on drilling rigs. Over the next decade, the number of workers required to operate a drilling rig could fall by as much as 20 to 30 percent due to automation, Kate Aronoff has reported in the New Republic.

During the COVID pandemic, even as fossil fuel companies were raking in federal aid, fossil fuel companies continued to conduct mass layoffs.

There’s another way forward that could be better for workers and the future of the planet. Mounting research has found that, dollar-for-dollar, investments in renewable energy create far more jobs in the near term than fossil fuel investments.