How Will Offshore GOM Oil Employment Shake Out?
Gulf of Mexico offshore oil and natural gas industry employment could shake out in several different ways, according to a new report by Energy & Industrial Advisory Partners.
Under the base case of the report, which was prepared for the National Offshore Industries Association (NOIA), employment supported by the Gulf of Mexico offshore oil and natural gas industry is expected to steadily rise through the end of the decade, with an average of around 405,000 jobs supported from 2025 to 2030.
Employment is then projected to slowly fall, with year to year fluctuations, from 2031 to 2040, according to the base case. This scenario sees an average of around 357,000 jobs supported by the sector during 2031 to 2040 and an average of around 370,000 jobs supported from 2020-2040.
Under a scenario in which there is an end to new leasing in the Federal Outer Continental Shelf, which assumes that no new lease sales would be held from 2022 but existing leases would be unaffected, average employment is projected to decline to 268,000 jobs during the forecast period, which marks a 28 percent drop. Over the last decade of the forecast period, average employment supported by the offshore oil and natural gas industry is projected to decline to just under 204,000 jobs.
In a scenario where regulatory authorities no longer issue new drilling permits for Gulf of Mexico wells, which assumes no new drilling permits would be issued from 2022 but existing permits would be unaffected, employment is projected to decline to around 179,000 jobs on average, which marks a 52 percent decline. Over the last decade of the forecast period, average employment supported by the offshore oil and natural gas industry is forecasted to drop to just over 125,000 jobs.
According to the report - which highlighted that, although a number of restrictive policy changes have been discussed, no firm policy proposals have been advanced - it is estimated that the industry supported around 345,000 jobs last year. Due to current economic conditions and low commodity prices, however, the study projects that the Gulf of Mexico offshore oil and natural gas industry will support around 295,000 jobs in 2020.
As part of the development of the report, a review of the potential implications of the potential regulatory and policy changes was conducted. The report emphasizes, however, that the study is in no way exhaustive, especially considering the uncertainty around how the potential proposed policy changes would be developed and implemented.
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