FILE - Texas oil

Oil well and storage tanks in the Texas Panhandle.

(The Center Square) – The decrease in oil prices in the middle of the global coronavirus pandemic has dealt a significant blow to the Texas oil and gas industry.

“Low oil prices and the decrease in demand caused by the pandemic resulted in significant reductions in capital expenditures and job loss in the oil and natural gas industry, which were necessary to survive during this historic period," Todd Staples, president of the Texas Oil and Gas Association, told The Center Square.

"The downturn will impact state and local government budgets considering that the Texas oil and natural gas industry paid more than $16 billion in state and local taxes and state royalties in fiscal year 2019, revenue that is used to support education, transportation, health care and infrastructure through the State Highway Fund," Staples said.

The industry has lost 107,000 jobs during the pandemic, according to Reform Austin News, and oil field employment is down by half from its peak in December 2014.

Job recovery will come as the price of oil begins to rise again. Staples said the upstream sector of the oil and natural gas industry added 700 jobs in September, bringing the total upstream employment in Texas to 170,500 jobs. These jobs pay among the highest wages in the state.

This is the first uptick since February.

The upstream sector involves oil and natural gas extraction and excludes other industry sectors such as refining, petrochemicals, fuels wholesaling, oilfield equipment manufacturing, pipelines and gas utilities, which support hundreds of thousands of additional jobs.

“At a time when some question the future of oil and natural gas, this small but positive job growth is an indicator of better days ahead," Staples told The Center Square.

The impact reaches far beyond those in the industry.

"The state’s Economic Stabilization Fund (commonly known as the Rainy Day Fund), the Permanent School Fund and the Permanent University Fund are all funded with oil and natural gas tax and royalty revenue,” Staples said.

"This industry is indispensable to our daily lives and will be a valuable part of the energy mix for future generations. Beyond transportation fuels and power generation, oil and natural gas form the building blocks for 96% of the products we use every day like computers and cell phones, medical devices and hand sanitizer, and eyeglasses and zippers, just to name a few,” Staples said.

Some fear that as companies merge, more employees will be laid off. Recently, ConocoPhillips, Pioneer Natural Resources, Chevron and Devon Energy announced that they would be taking over other energy companies. The combined efforts will reduce costs, but redundant positions will also be eliminated.

“Mergers and acquisitions are actually, historically, part of the oil and natural gas industry, but the current conditions highlight the need to optimize operations and create efficiencies that will allow United States’ producers the ability to compete globally," Staples said.

"Too often we take domestic production for granted and fail to realize jobs and investment could go elsewhere. As a state and nation, we must continue to cultivate policies that encourage job growth in Texas and the United States rather than in other countries,” said Staples.