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Cities Hit Hardest by the Drop in Oil Prices

The COVID-19 pandemic has sent the world economy into turmoil as lockdowns around the world have caused economic activity to grind to a halt. The demand for oil has crashed in the wake of the growing pandemic, sending oil prices diving and even dipping below $0 per barrel. According to the most recent data from the U.S. Census Bureau, the U.S. employs close to 130,000 people in the oil and gas extraction industry. Many of these workers now face uncertain employment.

Bureau of Labor Statistics (BLS) data from the last two decades shows that employment in the oil and gas sector tends to rise and fall with crude oil prices. Price drops in 2014 resulting from oil surpluses caused the oil and gas sector to shed roughly a third of its workforce. Today, the pandemic combined with a lack of storage capacity for excess oil have caused the price to fall sharply again—a trend that threatens thousands of jobs.

Chart1 Oil and gas employment vs. crude oil price

The concentration of oil and gas extraction workers varies widely by location. At the state level, Oklahoma and Wyoming have the highest concentrations of workers in oil and gas extraction at 7.7 and 6.7 times the national average respectively. Texas, with a relative concentration of 5.8 times the national average, boasts the largest number of total oil and gas workers of any state. Many states such as Hawaii, Maine, and Rhode Island don’t produce oil or natural gas and have no employees reported by the Census Bureau.

Chart2 Oil and gas employment by state

To find the metropolitan areas hit hardest by the drop in oil prices, researchers at Construction Coverage–a review website for construction project management software and commercial auto insurance–used data from the U.S. Census Bureau and the Bureau of Economic Analysis. The researchers ranked metro areas according to the relative concentration of employment in the oil and gas extraction industry. Researchers also looked at the total number of oil and gas extraction workers, the median earnings for those workers, and cost of living.

To improve relevance and accuracy, only metropolitan areas with at least 100,000 people were included in the analysis. Here are the U.S. metropolitan areas with the highest concentrations of oil and gas workers.

Metros With the Highest Concentration of Oil and Gas Workers

West Virginia Charleston KH4JNC copy

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25. Charleston, WV

  • Relative concentration of oil and gas workers: 2.3 times the national average
  • Number of oil and gas workers: 151
  • Total number of workers: 79,033
  • Median earnings for oil and gas workers: $90,000
  • Cost of living: 14% below average

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Louisiana Baton Rouge capitol HDEAEY

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24. Baton Rouge, LA

  • Relative concentration of oil and gas workers: 2.4 times the national average
  • Number of oil and gas workers: 760
  • Total number of workers: 393,009
  • Median earnings for oil and gas workers: $80,000
  • Cost of living: 7% below average
Pennsylvania Central PA PBAG2D

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23. State College, PA

  • Relative concentration of oil and gas workers: 2.4 times the national average
  • Number of oil and gas workers: 153
  • Total number of workers: 76,627
  • Median earnings for oil and gas workers: $65,000
  • Cost of living: 3% above average
Pennsylvania Pittsburgh WAG4K9

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22. Pittsburgh, PA

  • Relative concentration of oil and gas workers: 2.7 times the national average
  • Number of oil and gas workers: 2,514
  • Total number of workers: 1,144,232
  • Median earnings for oil and gas workers: $75,000
  • Cost of living: 6% below average
Texas Lubbock GJ78TB

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21. Lubbock, TX

  • Relative concentration of oil and gas workers: 2.9 times the national average
  • Number of oil and gas workers: 359
  • Total number of workers: 151,707
  • Median earnings for oil and gas workers: $86,000
  • Cost of living: 7% below average

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Virginia Roanoke HC5XCA

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20. Roanoke, VA

  • Relative concentration of oil and gas workers: 3.1 times the national average
  • Number of oil and gas workers: 397
  • Total number of workers: 158,089
  • Median earnings for oil and gas workers: Not available
  • Cost of living: 10% below average
California Santa Barbara JB043X

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19. Santa Maria-Santa Barbara, CA

  • Relative concentration of oil and gas workers: 3.5 times the national average
  • Number of oil and gas workers: 618
  • Total number of workers: 213,397
  • Median earnings for oil and gas workers: $70,000
  • Cost of living: 10% above average
West Virginia Morgantown 2AA5BN0

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18. Morgantown, WV

  • Relative concentration of oil and gas workers: 3.5 times the national average
  • Number of oil and gas workers: 193
  • Total number of workers: 66,346
  • Median earnings for oil and gas workers: $72,000
  • Cost of living: 9% below average
Colorado Denver F3MTFN

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17. Denver-Aurora-Lakewood, CO

  • Relative concentration of oil and gas workers: 3.6 times the national average
  • Number of oil and gas workers: 4,899
  • Total number of workers: 1,677,095
  • Median earnings for oil and gas workers: $85,000
  • Cost of living: 6% above average
North Dakota capitol CW4WM0

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16. Bismarck, ND

  • Relative concentration of oil and gas workers: 4.1 times the national average
  • Number of oil and gas workers: 259
  • Total number of workers: 76,382
  • Median earnings for oil and gas workers: $100,000
  • Cost of living: 7% below average
California Bakersfield DE0G03

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15. Bakersfield, CA

  • Relative concentration of oil and gas workers: 4.3 times the national average
  • Number of oil and gas workers: 1,228
  • Total number of workers: 348,917
  • Median earnings for oil and gas workers: $120,000
  • Cost of living: 4% below average
Louisiana Shreveport GJ1H14

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14. Shreveport-Bossier City, LA

  • Relative concentration of oil and gas workers: 4.4 times the national average
  • Number of oil and gas workers: 645
  • Total number of workers: 179,726
  • Median earnings for oil and gas workers: $58,000
  • Cost of living: 11% below average
Texas Tyler 2A0YR0C

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13. Tyler, TX

  • Relative concentration of oil and gas workers: 5.0 times the national average
  • Number of oil and gas workers: 423
  • Total number of workers: 103,429
  • Median earnings for oil and gas workers: $100,000
  • Cost of living: 6% below average
Texas Amarillo MWMYDY

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12. Amarillo, TX

  • Relative concentration of oil and gas workers: 5.1 times the national average
  • Number of oil and gas workers: 522
  • Total number of workers: 125,842
  • Median earnings for oil and gas workers: $100,000
  • Cost of living: 7% below average
Texas College Station PD0ENR

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11. College Station-Bryan, TX

  • Relative concentration of oil and gas workers: 5.3 times the national average
  • Number of oil and gas workers: 460
  • Total number of workers: 105,264
  • Median earnings for oil and gas workers: $60,000
  • Cost of living: 7% below average
Lousiana Houma CBP9FR

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10. Houma-Thibodaux, LA

  • Relative concentration of oil and gas workers: 5.4 times the national average
  • Number of oil and gas workers: 447
  • Total number of workers: 100,206
  • Median earnings for oil and gas workers: $95,000
  • Cost of living: 10% below average
Louisiana Lafayette ETP5E0

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9. Lafayette, LA

  • Relative concentration of oil and gas workers: 5.6 times the national average
  • Number of oil and gas workers: 1,085
  • Total number of workers: 238,332
  • Median earnings for oil and gas workers: $111,000
  • Cost of living: 12% below average
Texas San Angelo KGA8W8

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8. San Angelo, TX

  • Relative concentration of oil and gas workers: 5.9 times the national average
  • Number of oil and gas workers: 273
  • Total number of workers: 56,396
  • Median earnings for oil and gas workers: $125,000
  • Cost of living: 7% below average
Alaska Anchorage PD600C

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7. Anchorage, AK

  • Relative concentration of oil and gas workers: 6.1 times the national average
  • Number of oil and gas workers: 1,124
  • Total number of workers: 223,143
  • Median earnings for oil and gas workers: $130,000
  • Cost of living: 8% above average
Colorado Fort Collins JG0MKX

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6. Fort Collins, CO

  • Relative concentration of oil and gas workers: 7.1 times the national average
  • Number of oil and gas workers: 1,078
  • Total number of workers: 185,707
  • Median earnings for oil and gas workers: $80,000
  • Cost of living: 2% above average
Oklahoma Oklahoma City PKJ0CA

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5. Oklahoma City, OK

  • Relative concentration of oil and gas workers: 7.7 times the national average
  • Number of oil and gas workers: 4,577
  • Total number of workers: 721,064
  • Median earnings for oil and gas workers: $95,000
  • Cost of living: 9% below average
Texas Corpus Christi M8PAP6

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4. Corpus Christi, TX

  • Relative concentration of oil and gas workers: 8.1 times the national average
  • Number of oil and gas workers: 1,451
  • Total number of workers: 217,105
  • Median earnings for oil and gas workers: $70,000
  • Cost of living: 6% below average
Texas Odessa MX5EXF

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3. Odessa, TX

  • Relative concentration of oil and gas workers: 10.0 times the national average
  • Number of oil and gas workers: 621
  • Total number of workers: 75,980
  • Median earnings for oil and gas workers: Not available
  • Cost of living: 4% below average
Texas Houston G2C895

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2. Houston-The Woodlands-Sugar Land, TX

  • Relative concentration of oil and gas workers: 13.1 times the national average
  • Number of oil and gas workers: 35,927
  • Total number of workers: 3,335,536
  • Median earnings for oil and gas workers: $120,000
  • Cost of living: 2% above average
Texas Midland PP1R71

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1. Midland, TX

  • Relative concentration of oil and gas workers: 88.1 times the national average
  • Number of oil and gas workers: 6,567
  • Total number of workers: 90,888
  • Median earnings for oil and gas workers: $85,000
  • Cost of living: Average

Detailed Findings & Methodology

Many of the locations with the highest concentration of oil and gas extraction workers are located in Texas, which is the leading producer of crude oil in the country. Texas employs over 65,000 workers in the oil and gas extraction industry, about half of the national total. The recent oil market crash will disproportionately hurt Texas cities and other locations with large oil and gas industries.

Oil and gas workers tend to have high median earnings—on average workers in the metros with the highest concentrations of oil and gas workers earn over $90,000 per year. Workers in these metros also tend to enjoy a lower cost of living.

To determine the cities hit hardest by the drop in oil prices, researchers at Construction Coverage analyzed the latest data from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS) and the Bureau of Economic Analysis’s Regional Price Parity (RPP) data. Using ACS PUMS data, the researchers ranked metros according to the relative concentration of workers in oil and gas extraction. In the event of a tie, the city with the larger share of employment in oil and gas extraction was ranked higher. Researchers also calculated the total number of oil and gas extraction workers, the median earnings for oil and gas extraction workers, and the cost of living. Median earnings is defined as the median wage and salary income for oil and gas extraction workers. Cost of living compared to the national average comes from the RPP.

To improve relevance, only metros with at least 100,000 people were included in the analysis. Due to the way the U.S. Census Bureau conducts this survey combined with low numbers of oil and gas workers in certain locations, there are sometimes large margins of error associated with the employment estimates. While the relative concentrations are directionally accurate, the absolute number of oil and gas workers (especially for some of the smaller locations) could be different from the actual number.

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