Copyright 2002 by the Wyoming Department of Employment, Research & Planning

 

Regional Employment and Wages in Wyoming's Oil & Gas Industry

by: Tony Glover, Senior Research Analyst

"The lower wages of oil & gas jobs in the Northeast region may be a by-product of the occupational composition of the oil & gas industry."

The feature article in this month's issue of Wyoming Labor Force Trends, "Forecasting Oil & Gas Employment for the State of Wyoming," analyzes oil & gas employment from a statewide perspective. This article looks at the impact coalbed methane has on different regions of the State.

Figure 1 represents average quarterly employment (the number of jobs) from first quarter 1996 to fourth quarter 2001 for the oil & gas industry (SIC1 13) for four of Wyoming's five regions (see Wyoming Regions, Counties, and County Seats map). Data for Wyoming's Southeast region were omitted because employment levels throughout the study period remained below 100 jobs. 

Most regions experienced some seasonal changes in oil & gas employment, but job levels in all regions remained fairly stable from first quarter 1996 to first quarter 1999. After third quarter 1999, all regions experienced job growth with the exception of the Northwest. The Northeast region, in particular, experienced dramatic growth, as employment doubled from less than 1,500 jobs in third quarter 1999 to more than 3,000 jobs by third quarter 2001. Anecdotal evidence suggests the bulk of this increase in oil & gas employment is related to increases in coalbed methane drilling and exploration in this area.

Figure 2 shows average quarterly wages from first quarter 1996 to fourth quarter 2001 for Wyoming's oil & gas industry. Again, data for the Southeast region have been omitted. Average quarterly wages have increased over time for all regions. However, wages for the Northeast region are generally lower than the other regions. 

The lower wages of oil & gas jobs in the Northeast region may be a by-product of the occupational composition of the oil & gas industry. Because the coal in the Northeast region lies at shallow depths, coalbed methane wells in this region are relatively easy to drill.2 The ease of drilling requires a less experienced, and thus lower paid, extraction labor force. Possibly more influential to the average wage of oil & gas jobs is the low number of exploration jobs (e.g., geologists) required for coalbed methane extraction.3 Methane occurs in most coals, and the location of coal in the Northeast region is already known. Most occupations involved in exploration require post-secondary education and pay relatively large salaries. Having fewer skilled exploration jobs in the Northeast may cause average wages to be lower.

Coalbed methane drilling and exploration has had a positive impact on employment levels throughout Wyoming, especially in the Northeast region. However, due to the lower wage occupations and reduced need for exploration associated with coalbed methane drilling, average wages have not increased as dramatically as employment.

1For purposes of this analysis, the oil & gas industry is defined as firms in Standard Industrial Classification (SIC) 13. It includes firms engaged in crude petroleum and natural gas production, drilling oil and gas wells, oil and gas exploration, and all other oil and gas field services. 

2U.S. Department of the Interior, U.S. Geological Survey, "Coal-Bed Methane: Potential and Concerns," USGS Fact Sheet FS-123-00, November 22, 2000, <http://pubs.usgs.gov/factsheet/fs123-00/> (July 22, 2002).

3U.S. Department of the Interior, U.S. Geological Survey, "Coal-Bed Methane: Potential and Concerns," USGS Fact Sheet FS-123-00, November 22, 2000, <http://pubs.usgs.gov/factsheet/fs123-00/> (July 22, 2002).

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