In an industry promising a path to the middle and upper classes, the jobs are not going to Black Americans.
Since oil began to flow from the first successful well in the U.S. in 1859, owned and operated by Black Men, the American oil and gas industry has promoted itself as an egalitarian engine of the country’s economy, a driver not only of industry and innovation but a path to financial security for almost anyone, regardless of background, who is willing to put in the work.
As fracking and horizontal drilling in the last decade transformed the U.S. into the world’s largest oil and gas producer, it’s become a selling point verging on the mythic: The Walmart cashier from Bismarck or Midland or Tulsa suddenly drawing a six-figure salary and driving a gleaming white pickup truck, the engineer or chemist now making three times that of his grad school peers by working in the petroleum sector.
For Black Americans, however, it’s a path to upward mobility filled with hurdles.
In spite of well-publicized diversity campaigns and outreach efforts by the industry’s largest companies and trade groups, Black American workers last year held only 9 percent of the jobs in oil and gas extraction, according to the Labor Department. Through the boom of the past decade, Blacks never made up more than a tenth of the country’s oil and gas workforce, and an analysis found they continue to be paid on average 23 percent less than their white counterparts.
Oil and gas is far from the only industry where black workers account for just a fraction of the workforce: In fact, as recently as 2015 Blacks held a larger share of oil and gas jobs than in fields as diverse as law, the social sciences, arts and entertainment, architecture, the physical sciences and the life sciences, according to Census data. The U.S. across the board has seen strikingly little progress in reducing hiring discrimination or shrinking employment and pay gaps between black and white workers.
But there are elements that make oil and gas unique:
Unlike, say, law or finance or even most chemical or engineering firms, the oil and gas sector lobbies hard for tax breaks and environmental exemptions that affect taxpayers’ wallets and health, often on the premise that by offering such exemptions, communities will in turn benefit from local jobs. And while there are certainly other sectors of the economy that push for similar subsidies – tech giants, for example, or professional sports teams – few produce the pollution of the oil and gas sector.
A history of building refineries and other industrial sites in communities of color has ensured that minorities continue to bear a disproportionate burden from the sector’s impacts. An EPA study this spring found race – not poverty – is the biggest predictor of exposure to certain air pollution from the oil industry.
Laborers, whether in mining or manufacturing or construction, have long sacrificed their bodies and their health for a wage. But when it comes to oil and gas, the trade-off between allowing – or even encouraging through tax breaks – an oil, gas or petrochemical facility to be built in exchange for jobs, it turns out, is no trade-off at all.
“I hear people in this industry talk about how this industry can move people into the middle class, but that’s never going to happen if we’re not talking about this stuff,” says Paula Glover, president of the American Association of Blacks in Energy.
As benchmark oil prices stabilized this year after a crash in 2016 and more rigs and jobs have returned, U.S. News & World Report spoke with close to a dozen Black American roughnecks, engineers, students, professors, university presidents and professional groups to find out why the oil and gas industry remains effectively closed to Black Americans.
They pointed to hostile climates on the job and hiring trends stretching back more than a century, recruitment drives that inherently focus on white workers and outreach that continues to shun the largest pools of black engineering talent.
The result is that in a U.S. labor market upended by automation and the gig economy, the oil and gas industry – seen by many as one of the last reliable roads to the middle and upper class – remains effectively off-limits to the communities most in need of the economic opportunity it purports to promise.
The American Petroleum Institute, the lobbying colossus that represents all facets of the oil and gas industry, has regularly touted its commitment to diversity in promoting the industry.
Jobs are its key selling point. And in reports and remarks, the organization has contended that oil and gas offer the opportunity that communities of color and low-income communities have so long called for, combining both a seemingly low barrier of entry with reliable work and high wages.
“Our energy renaissance has created unprecedented opportunities for Americans of all backgrounds,” Jack Gerard, API’s then-president and CEO, said in February 2016 in support of a House bill aimed at encouraging the hiring of more women and people of color.
Hiring within the oil and gas industry by that point had surged more than 20 percent from 2008 to 2015, buoyed by the production boom unleashed by hydraulic fracturing and horizontal drilling.
Two months before Gerard’s remarks, the industry closed out 2015 with monthly average employment of 193,400 workers, slightly off the 10-year peak of 197,500 workers hit the previous year, according to Labor Department data. And though supervisors or experienced specialists were the ones mostly pulling the six-figure incomes that news outlets reported – and industry champions promoted – workers in the field were still averaging about $63,000 a year, according to federal data – thousands of dollars more than a national median income that still hovered in the $50,000s, let alone what can be earned in most retail or entry-level service jobs.
“These are careers that will pay well above the national average. Expanding education and workforce training programs will help ensure competitive access to these great job opportunities in underrepresented communities,” Gerard said.
Benchmark oil prices crashed that month, spurring mass layoffs. More than two years on, hiring has only recently recovered, and it is still not near the level it was in 2015, with companies having achieved greater efficiencies during the downturn.
However, in a March 2016 report commissioned and still cited by API, researchers from the consulting firm IHS Markit concluded that the good times would eventually continue – as long as government stayed out of the way: Another 1.9 million new jobs in the oil, gas and petrochemical industries would be created between 2015 and 2035 under a low-regulation “pro-development” scenario, it predicted.
Moreover, nearly 40 percent of the new jobs would go to Black American workers, results that “speak to the continuing importance of these industries in the U.S. economy as a whole and to individuals and families looking for well-paying career opportunities,” the report found.
Yet it glossed over a major caveat:
While the number of jobs overall were expected to rise, the share of Black Americans in the oil and gas workforce wouldn’t crack the current rate of 7 percent, according to data in the report. Latinos, it found, would receive a rising share of jobs as the community constituted a larger and larger portion of the U.S. population overall through the next 20 years. But over the same period, the oil and gas industry’s biggest champion effectively – if silently – concluded that virtually nothing would change for the sector’s black workers.
“Growth itself isn’t going to do it,” says Donald Tomaskovic-Devey, of the University of Massachusetts, who has studied hiring in oil and gas. “The money’s pouring in and you’re just scrambling to keep up while you’re in this growth mode – that leads to less reflective management. Growth alone has no effect.”
And there was more: While IHS and API’s researchers found that as many as 131,000 new jobs would go to Black Americans under the best-case “pro-development” scenario, only about 15 percent of those jobs would be in lucrative “skilled blue collar” and “semi-skilled blue collar” roles – jobs such as electrician, welder, roustabout or equipment operator. The plurality – at least a fifth – would be in lower-paying service positions like accounting, where black workers already make up a larger share of the oil and gas workforce.
An API spokesman, in a lengthy statement to U.S. News, said that diversity in the industry “remains a core interest.”
“The natural gas and oil industry has focused on outreach to communities of color over the past few years, specifically working on programs to diversify our workforce, starting with education,” Reid Porter said.
Asked why the percentage of black workers in the industry isn’t expected to change in the next 15-20 years, he replied, “We have invested in studying this issue as well as taking actions that include strategic partnerships, and recruitment.”
IHS Markit declined to make one of the report’s authors, Richard Fullenbaum, available for comment. Fullenbaum’s coauthor, James Gillula, retired last year.
Geography, of course, plays a uniquely significant role in the oil and gas industry – and, by extension, who the industry hires. Today’s energy boom – the one that’s allowed the U.S. to become the world’s biggest exporter of oil and gas and, soon, to export more crude oil than it imports for the first time since 1953 – is tied to a series of shale rock formations spread beneath the U.S.
There are the Bakken Shale in western North Dakota, the Anadarko Basin in Oklahoma and the Permian Basin in West Texas, for example, each embodying the popular image of the U.S. energy renaissance: a boom based in rural communities along the central spine of America, areas that also happen to be bracingly isolated and overwhelmingly white.
Such locations pose a challenge when it comes to coaxing most any young American to the oil and gas trade. But they present particular issues in recruiting black workers.
“It’s not uncommon in a lot of these areas to see people with Confederate flags and things of that nature,” says Tosa Nehikhuere, a well engineer who worked on oil wells in Fort Worth, Texas, during internships as an engineering student at the University of Texas at Austin. “For a black person working in that environment, a lot of times it can be very uncomfortable because they obviously don’t fit in with that culture.”
But those are not the only boom spots. Drillers have also flocked to the Eagle Ford Shale near Houston and the Marcellus Shale around Pittsburgh – cities where more than a quarter of residents are black. And there’s Louisiana, long home to refineries and petrochemical plants and other downstream industries, where more than a third of the state’s population is Black American.
Yet even in these regions, and especially in low-income communities that are often located closest to such industrial sites, hiring of Black Americans has lagged.
“The narrative is that these are well-paying jobs and these are family-sustainable jobs that the economy of Pennsylvania needs,” says Jamil Bey, president of UrbanKind Institute, an economic and social justice think tank in Pittsburgh, a region that’s recently become a hub of the oil and natural gas boom. “The reality is that long-term residents who have been the victims of this environmental injustice for all of this time, they’re not getting the jobs that would provide the wages that would allow them to move away from those facilities.”
Michael Ash, a professor of economics and public policy at the University of Massachusetts, Amherst, has studied the trade-off between a community allowing a company to build a new refinery or oil rig or compressor station, and the jobs that such facilities then provide.
