Image courtesy of kate hiscock/Flickr.

A new report from the Brookings Institute found that plummeting U.S. rig counts are signaling a larger wave of energy related job losses.

The report, published Wednesday, found that the loss of 1,322 working rigs from January 2015 to March 2016 may lead to the elimination of between 226,000 to 296,000 drilling-related jobs over the long term.

The most recent seasonally adjusted data from the U.S Bureau of Labor Statistics shows that the number of oil and gas extraction jobs fell to 179,800 in February, down from 197,200 jobs a year ago.

Support activities for the mining subsector, a category that includes oil and gas services, has lost nearly 100,000 jobs since January 2015.

Meanwhile, the number of rigs drilling in the United States has fallen to its lowest level since data collection began in 1949.

A 2015 report from the Federal Reserve Bank of Kansas City found that removing one active rig eliminates 28 jobs in the near-term and 171 jobs in the long run.

Brookings projects that Texas will lose 19,955 jobs in the short-term and 121,265 jobs in the long run after shedding nearly half of its rigs since last year, the biggest drop of any major producing state.

Large rig count declines in Oklahoma and North Dakota could prompt short term loses of over 4,000 jobs in each state and a loss of about 27,000 jobs each in the long term.

Utah is expected to post the smallest number of job losses, losing an estimated 748 jobs in the short term after its rig count dipped by 23 rigs year-over year.

Long-term job losses in Utah are expected to come in at just over 4,500 jobs, the report said.

The report also found that some major producing states will be better at absorbing the impact of falling rig counts than others.

States where oil and gas account for a larger share of the economy, such as North Dakota and Wyoming, have felt the effects of job losses more intensely.

A tax revenue shortfall has hit North Dakota for two months in a row after the state lost an estimated 20,000 to 22,000 oil and gas jobs since prices started falling in July 2014, according to the Grand Forks Herald.

“By contrast, the employment impact of the declining rigs is muted by a more diversified economic base in Colorado, Ohio, and Pennsylvania,” Brookings said.

Colorado still managed to add 5,200 nonfarm payroll jobs in January despite losing 6,700 jobs that month across oil, gas and mining sector, according to the Denver Post.

According to Brookings, Utah, Colorado, Pennsylvania and Ohio will be able to best cope with oil and gas job losses.

Long-term oil and gas job losses in those four states will only account for an estimated 0.1 to 0.8 percent drop in total employment numbers.

Long-term oil and gas job losses in North Dakota will account for an estimated 7.5 perncet employment level decline, the largest drop of the 10 producing state included in the report.

The impact of oil and gas job losses are expected to be more muted in Texas, with long-term oil and gas job losses accounting for a 0.8 to 2.1 percent drop in that state’s employment level.


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