Of all the places that America's new jobs are, the emerging energy business, directly or indirectly, might be responsible for more of them than almost anything else. Since 2002, the exploration of natural gas deposits embedded in shale, followed by oil drilling that began in earnest late in the decade, has created more than 1 million jobs, says Moody's Analytics economist Chris Lafakis. That's out of 2.7 million the whole country created.
"It's really huge," Lafakis says. "And the jobs pay very well." Jobs directly in the oil and gas extraction business pay an average of just under $150,000 a year, Lafakis says — almost exactly three times the national average.
Big jobs in small towns
Just counting positions directly in the energy industry, the shale boom has accounted for as many as 33,000 new jobs this year, according to Bright Labs, a startup whose website provides job-hunt data and tips.
More than 3,500 are in metropolitan Houston, Bright says. But the job expansion stretches through cities of all sizes. Oklahoma City's 400 jobs are near the top of the list, Bright says. Denver, Pittsburgh and Williston, N.D., all near newly exploitable oil and gas deposits, also are seeing big changes from shale-related jobs.
The most plentiful jobs — at least, of those that end up being advertised online — seem to be in engineering. Six of the top eight most-filled new jobs in the industry are for some kind of engineer, says Bright senior data scientist Jacob Bollinger.
But the shale job surge is more broad-based than those numbers alone would suggest, thanks to the energy industry's complicated infrastructure and supply chain, researchers say. While oil and gas deposits are concentrated in a handful of places, more than 30 states saw oil and gas support employment, including suppliers and service companies that work with energy companies, rise at least 50 percent in the past decade, Moody's says.
Because new rigs have to be built, and oil and gas have to be moved to market either via newly built pipelines or by truck and rail, new jobs abound at both drilling companies and their suppliers, says Tom Tunstall, research director for the Institute for Economic Development at the University of Texas at San Antonio. It has closely studied the development of the Eagle Ford shale field that spans more than a dozen counties in South Texas.
In Pennsylvania, where officials say shale added 18,000 new energy industry jobs between 2008 and last year, another 5,000 jobs were added for freight trucking, and 500 more were created to build roads, according to a state-sponsored study this summer.
One company that's gotten a big boost is the Union Pacific railroad, which gets about 2 percent of its business from shale-based companies, hauling everything from tank cars of oil to sand used in extracting gas and oil from deep underground, CEO John Koraleski says.
Rising U.S. energy production also is creating manufacturing jobs for everything from steel for piping to rail cars. Among the biggest: a $650 million, 350-job plant by French tubing manufacturer Vallourec to make products for shale drilling in Youngstown, Ohio, and a planned natural gas cracking plant outside Pittsburgh that could add 10,000 construction jobs and hundreds of permanent positions at Shell, if it goes forward.
"Every week, I see a billion-dollar investment," Navigant Consulting energy economist Julie Carey says.
Vets may apply
Pioneer Natural Resources, an Irving, Texas-based driller, has hired 400 people in the South Texas area in the last two years, says Joey Hall, vice president in charge of Pioneer's South Texas Asset Team. About three-quarters are blue-collar workers in the fields, he said. But the company has retained at least another 1,000 outside contractors to build rigs, drive trucks and do other work.
On top of that, the company added scientists and engineers at headquarters to support both Eagle Ford and other operations, he said. In all, the company added 850 staffers last year and another 500 so far this year — to a team of about 4,000.
"These are good, decent, honorable jobs," Hall said. "People can and do leave satisfied and provide for their families."
The picture is similar at ConocoPhillips, the nation's biggest independent exploration company. Conoco added more than 500 jobs in Texas and North Dakota related to shale in the last three years, spokeswoman Davy Kong said. More than half were professional staff such as engineers, and the rest were field staff, such as mechanics and construction workers.
About 15 percent of the 54,000 new jobs expected in the Eagle Ford shale by 2021 will require a college degree, and a little more than 10 percent will require direct experience in the energy business, Tunstall said.
Community colleges and business groups are organizing training programs. A federally funded $15 million program called ShaleNet plans to train pipeline operators and oil-field technicians nationwide, who are expected to follow work to new places as new fields open, said Laura Fisher, senior vice president for the Allegheny Conference, a business group in Pittsburgh.
At Pioneer, field hands and supervisors include everyone from military veterans to former schoolteachers, Hall said.
Pipeline technician James Laake took about a $20,000 raise from his old job as a prison guard; the 24-year-old high school graduate, who has a welding certificate, said he needed only brief on-the-job training.
"The transferable skills for veterans are leadership, logistics and working with large equipment," Hall said. "Electronics are electronics, and a truck is a truck."
Contractors and spinoffs
Because jobs related to shale are in more places, more job categories and more industries than you might suspect, figuring out which jobs are really caused by the shale boom is a bit tricky.
Only about a quarter of employment growth driven by the shale boom has happened at energy companies, Moody's found. Another 308,000 jobs have been "indirectly" created by the boom — those include some at transportation companies or equipment firms, Lafakis said. More than half a million are "induced" jobs, created to serve the needs of the other half-million people, once oil and gas brings more wealth to towns.
The boom is causing everyone from law firms to banks to add white-collar staffers, as well — and to open everything from hotels to the Red Dog Ice House, a big-screen sports bar coming to Carrizo Springs, Texas.
At Huntington Bancshares in Columbus, Ohio, executives give shale drilling in Ohio, Pennsylvania and West Virginia much of the credit for the bank's move to No. 3 among Small Business Administration lenders, from No. 15 three years ago, says CEO Stephen Steinour. The company has added 500 bankers, from loan officers to private bankers serving landowners whose petroleum-rich property turned out to be more valuable than they ever thought.
"It's not all about shale, but shale is what's driving the confidence to keep investing," says Jim Dunlap, Huntington's director of regional and commercial banking.
Hard to predict
Because the industry is still new, predicting its future growth is difficult, Lafakis said. Moody's is projecting much less growth in the next decade than in the last, but its analysts think it's more likely than not that estimates will prove conservative, he added.
The big question mark is the price of oil and natural gas. Hiring for gas fields has slowed as drillers have pulled back in response to lower gas prices. Companies are moving money to developing shale oil instead.
Most agree that large-scale oil hiring has another year or two to run, before the infrastructure of the new fields is put into place, Hall says. Operating rigs will require less labor, and job growth will moderate, he adds.
Then keeping shale's job boom going will depend on how many manufacturers in chemicals, autos and other energy-intensive fields will boost hiring by growing in the U.S., rather than abroad, to exploit energy prices that are lower than the world average, says George Schink, energy economist at Navigant Economics.
"We've done most of our hiring," Pioneer's Hall says. "But we'll do some for another couple of years."