Texas stands alone as an oil and gas producer in the United States. If Texas were a country, it would be the fifth largest oil producer in the world. Like in much of the rest of the United States, oil and gas production in Texas increased significantly after 2000 thanks to the development of fracking technology and a surge in oil prices, which lasted until about 2014. As part of the boom, employment in the United States oil and gas sector grew 58% during this period. But how were these gains distributed across different populations in an industry that historically has had low representation of women and people of color?1
Some insight to that question was provided by a study of employment growth in the Texas oil and gas industry that showed that employment benefits accrued differently across gender, race, and ethnicity.2 The employment rate for men in the industry increased from 2.9 to 4.3 times that of women in the early part of the boom. Thus, men in the state have a much higher overall employment rate compared to women, and men had a stronger oil and gas employment response to the boom than women.
Significant gains were made by some minority workers. The likelihood of a Black or Hispanic man gaining employment in the industry during the booms was higher than that for a White man. On the other hand, Hispanic and White women were the most likely to gain employment while Black women were the least likely. A reasonable conclusion from the research is that the oil and gas boom was demonstrably beneficial for some minority groups that had historically low representation.
The Texas boom also produced economic benefits beyond the specific regions of oil and gas operations. An influx of laborers in a booming industry can spur growth in other supporting sectors of the economy. These are known as “spillover” effects. Less than 3% of Texas workers are employed in the oil and gas industry, but the stimulus of the boom increased employment in construction, transportation, and manufacturing across the state. Income spillovers were also economically important and generally similar in magnitude for white males and females and Hispanic males and females.
The Texas oil and gas example demonstrates that at least some energy booms can produce widespread economic benefits, although they are not uniformly distributed. This may have implications for low carbon energy systems that are promoted by large, specific government incentives. Care must be taken to ensure that the stimulation packages produce an equitable distribution of economic benefits.
1 Price, Susan, August 4, 2015. This industry has even fewer women than tech. Fortune http://fortune.com/2015/08/04/women-energy-industry/.
2 Cai, Zhengyu, Karen Maguire, and John V. Winters. “Who Benefits from Local Oil and Gas Employment? Labor Market Composition in the Oil and Gas Industry in Texas and the Rest of the United States.” Energy Economics 84 (October 1, 2019): 104515. https://doi.org/10.1016/j.eneco.2019.104515.