Now Showing: Oil Downturn’s Effect on Oklahoma Employment Numbers

• Joe Wertz
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  Joe Wertz was a reporter and managing editor for StateImpact Oklahoma from 2011-2019. He reported on energy and environment issues for national NPR audiences and other national outlets. He previously worked as a managing editor, assistant editor and staff reporter at several major Oklahoma newspapers and studied journalism at the University of Central Oklahoma.

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Oklahoma lost about 500 mining industry jobs between December and January, data from the Oklahoma Employment Securities Commission show.

Almost all in-state “mining” jobs are actually in oil and gas drilling, The Journal Record‘s Sarah Terry-Cobo reports. And while the job losses haven’t yet affected the state’s unemployment rate, currently 3.9 percent, oil sector employment will likely take a big hit in the months to come, according to the Federal Reserve Bank of Kansas City’s bulletin The Oklahoma Economist.

“Based just on these past basic relationships between oil prices and Oklahoma economic activity, it seems likely that mining employment in the state will decline significantly in 2015,” according to the bulletin.

Layoffs have already hit Oklahoma’s oil patch as operators idle rigs and service companies make cutbacks. Estimates on the number of potential job losses vary wildly, Terry-Cobo reports:

Lynn Gray, chief economist for the state’s employment-tracking agency, said the OESC doesn’t provide a forecast for expected job losses in the energy sector.

However, the Federal Reserve Bank of Dallas has studied the effect of commodity prices on Texas’ industry. Based on that model, the Dallas Fed extrapolated data for Oklahoma’s energy industry, and found a large range for possible job losses in the coming year: between 5,000 and 20,000, Gray said.

Oklahoma has faced six oil downturns since 1980, and each boom/bust cycle has “unique circumstances” that don’t always offer insight on future downturns, Terry-Cobo reports,

During four of those previous downturns, total employment stayed below its previous peak for at least three years.