How many jobs in Texas are related to oil, gas?
No doubt about it: The oil and gas industry employs a lot of people in Texas.
But if you ask how many, the answer depends on who’s counting.
Last week Texas Railroad Commissioner David Porter announced that, as of June, “a record-breaking 297,800 Texans appeared on oil and gas industry payrolls.”
A day earlier, Lee Tillman, president of Marathon Oil, used an even higher number. “Texas leads the nation in job creation,” he said in a speech at a convention. The state “counted more than 400,000 jobs in the oil and natural gas sector in the first quarter of this year.”
In a nation still struggling to gain economic traction for all but an increasingly wealthy few, stories of job creation carry great power. Traveling the country to explore a presidential campaign, Gov. Rick Perry speaks of cutting taxes and regulations to foster employment.
Greg Abbott, the Republican candidate for governor, has promised more of the same in a television advertisement. “Unleash our oil and gas industry,” Abbott said. “Together we’ll keep Texas number one in jobs.”
His Democratic opponent, Wendy Davis, also promises to provide energy jobs. But her platform focuses on expanding the use of cleaner natural gas and renewable energy sources like wind and solar power.
In the end, voters judge the policies of their elected leaders in part by the numbers they deliver.
So how do the figures, cited one day apart in equally celebratory tones by industry experts, vary by so much?
The question resonates well beyond oil and gas career expos in Texas, where the energy industry is a diverse sector – upstream, downstream, oil, natural gas or alternative – in which each sector often cites its own number and espouses its own agenda. Exxon Mobil is so large and encompasses so many parts of the industry that different parts of the company have different agendas.
But clarity is needed here, especially when it comes to jobs.
“We have to use the same numbers,” says Daniel Hamermesh, a labor economist at the University of Texas. “Otherwise every industry that wants to make itself sound good will claim more people for more political power, and we end up in a state of 35 million employment and 24 million people.”
“There are no facts,” he stressed, “if we abandon that.”
Fear not: The 100,000-job gap between the two industry employment figures does not represent an abandonment of the facts. The two numbers actually came from the same source: Payroll data compiled by the Bureau of Labor Statistics.
But the split helps explain the power struggles within an industry that has gained broad influence over the economy, politics and culture of Texas.
“On one level, everyone associated with the oil-and-gas industry is ‘pro-industry,'” said William Keffer, an energy law expert at Texas Tech University. But “like with most things in life, as the family tree divides, different agendas evolve.”
For the 300,000-job figure, Commissioner Porter cited the work of Karr Ingham, an Amarillo-based economist who works for the Texas Association of Energy Producers. Based in Wichita Falls, the group represents the upstream side of the business, companies that work underground to extract oil and gas.
“I do work for the upstream guys,” Ingham said. “I am not including, of course, the midstream and downstream guys.”
Many of those guys belong to the Texas Oil & Gas Association, an expansive trade group based in Austin. Its preferred economist, James LeBas, offered the 400,000-job figure last month in a legislative hearing. He tracks 10 employment categories, from “upstream” drilling to “midstream” pipeline transportation to “downstream” petrochemical manufacturing.
“The first thing we want to do,” LeBas said, “is define what oil and gas is.”
Others define it more narrowly, including the Texas Pipeline Association, the Texas Independent Producers & Royalty Owners and even the Houston-based International Association of Geophysical Contractors.
“Specialization,” said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University, “allows them to focus on a distinct set of issues.”
On some of the biggest issues facing the industry, “specialization” is putting it politely. Natural gas associations promote their relative cleanliness, alienating their sometime partners on the gasoline and diesel fuel side. As the Keystone XL Pipeline faces opposition, railroads take over the transportation of crude oil, prompting fights over the relative safety of their delivery methods. Production companies seek to open foreign markets for crude oil, while many refiners push to maintain the exclusive access they receive under a 40-year-old exportation ban.
“The same company, Exxon Mobil for example, might have a different position depending on what part of the building you ask,” said Michael Webber, deputy director of the Energy Institute at the University of Texas. “They speak with different voices because they have different economic interests.”
Some oil and gas giants, including ConocoPhillips, Marathon and Hess, have split apart to pursue those different interests. Upstream to downstream, their interests tend to realign when it comes to promoting their role as job creators. Advocates of wind, solar and other renewable energy sources, still seeking to build economies of scale, struggle to compete for influence against the authors of so many paychecks.
But even the mighty oil and gas industry, even during the biggest boom in a generation, must compete against other voices. In a speech this month, Richard Fisher, president of the Federal Reserve Bank of Dallas, acknowledged the industry’s new jobs.
“We are grateful for every one of them,” Fisher said. Then, directing his audience to a slide showing bigger gains in transportation, hospitality, construction, government, finance and educational services, he emphasized the diversification of the state’s economy. “Clearly,” he said, aiming to please a broad constituency, “Texas employment is growing at an impressive clip.”