NIOSH Program Portfolio

Oil and Gas Extraction

Input: Economic Factors

Activity in the Oil and Gas Extraction Subsector is driven by multiple international factors. Oil prices have ranged from less than $15 to over $100 per barrel during the last decade. These fluctuations in prices are due to changes in supply as controlled by many private, national, and international organizations, as well as government stability and issues with refining and delivering petroleum products. High prices can increase the viability of small drilling companies and increase interest in maintaining existing wells.

Figure 1: Annual Average Crude Oil Price and Number of Active Oil and Gas Rigs, 1993-2008

Sources: Crude oil price – Energy Information Administration, Department of Energy; Rig Count – Baker Hughes Inc. (1993-2008 Sum of annual average for Active and Workover Rigs for the United States). Well Service Rig Count - Weatherford/AESC (1993-2008 Sum of annual average).

Drilling activity can be measured by the number of wells actively being drilled and the number of workover rigs maintaining existing wells. Drilling activity is associated with the price of the commodity involved (Figure 1) and varies over time, having a direct effect on the industry. The United States is currently in a time of increased oil prices, which corresponds with an increase in the drilling activity occurring both on-land and off-shore.

Improvements in technology can decrease the number of workers required to drill a well, but these improvements require capital investments in equipment. During 2003-2007 the number of workers grew 32% from 293,000 to 428,000 (Quarterly Census of Employment and Wages). Shortages of trained workers in this industry have led to several grants from the Department of Labor to specific oil and gas training facilities in the Western United States: Midland College in West Texas; San Juan College in Farmington, New Mexico; and the High Plains Technology Center in Woodward, Oklahoma.

Sources

Baker-Hughes North American Rig Count
External link: http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

Historical Crude Oil Prices, Energy Information Administration, Department of Energy
External link: http://www.eia.doe.gov/

Quarterly Census of Employment and Wages, BLS, Department of Labor
External link: http://www.bls.gov/cew/

Weatherford/AESC Well Service Rig Count
External link: http://www.c-a-m.com/content/dps/drl/rigcount/

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NIOSH Program:

Oil and Gas Extraction

Program Description
Inputs
• Sector Description
• Economic Factors
• Occupational Risks
• National Research Agenda (NORA)
• NIOSH Strategic Goals
• Emerging Issues
• Partners
• NIOSH Contacts
Activities
• NIOSH Research Projects
Outputs
• Publications
• Topic Pages
• Products
• Research to Practice