- “Labor intensity” of drilling in the U.S. has varied considerably over the course of the shale revolution.
- The chart below shows the ratio of U.S. Oil and Gas (O&G) industry employees vs. U.S. rig count.
- The impressive growth trend corroborates that expanding intensity isn’t just for iron – it relates to human capital as well.
- For each rig working, many more people are needed now than before. For instance, from 2006 to 2013, headcount per U.S. rig has grown 40% (from about 240 to over 335).
- Over such a short period, this is a substantial step change, and this helps to clarify why there is so much hiring demand in the U.S. O&G sector.
Note: The 2009 spike is an anomaly because of the rig count collapse following the financial crisis, and should be disregarded.