Initial Impacts from the COVID-19 Economic Crisis on US Energy Employment

Initial Impacts from the COVID-19 Economic Crisis on US Energy Employment

According to a BW Research , Over the month of March, the COVID-19 pandemic fueled historic job losses in the United States. In the last week of March, weekly initial unemployment claims reached a record high of 6.87 million, more than doubling the previous record set only a week earlier.

Total initial claims for March reached approximately 10.6 million. For context, the record number of weekly initial claims filings before 2020 was just under 700,000, during the midst of the Great Recession.

At the same time, oil markets continued a decline that started with an early 2020 demand drop, followed by disagreements over production cuts among OPEC+ nations. Oil prices fell by more than one-third globally, in a move many suspect was orchestrated to put pressure on U.S. shale producers, who have been expanding market share dramatically over the past decade. COVID-19 related reductions to economic activity have further exacerbated oil’s price decline, and it remains to be seen whether the recently announced global production cut agreement (of nearly 10 million barrels per day) will stabilize prices and stave off further turmoil in U.S. oil production.

Motor vehicles, the largest energy industry, suffered the most job losses in March, shedding about 110,600 jobs or more than 4 percent. This accounts for 36 percent of energy-related jobs lost over the past month.

• Fuels suffered the most job losses as a percent of its workforce, dropping more than 6 percent or about 72,700 jobs, or almost one quarter of all energy job losses in March. However, the steep drop is not limited to just the COVID-19 pandemic; tanking oil markets in the first quarter of 2020 also heavily impacted the US fuels sector.

Energy efficiency, the second largest energy-related sector, followed closely behind fuels, losing about 69,800 jobs or about 3 percent of its workforce. This represents 23 percent of energy job losses over the past month.

• Transmission, distribution, and storage and electric power generation were also hard hit, losing more than 26,400 and 23,900 jobs respectively. This represents a 2 and almost 3 percent decrease for the respective sectors, each contributing between 8 and 9 percent of all energy industry job losses.

• Clean energy jobs make up more than one third of energy job losses, totaling 106,400 jobs lost.

• Fossil and nuclear fuels and electricity generation, traditional transmission and distribution, and gas and diesel motor vehicles make up about 197,000 lost jobs or nearly two thirds of all energy job losses.

• Fossil and nuclear fuels and electricity generation account for 76,700 job losses or more than one quarter of all energy jobs lost.

• Of the nearly 51,000 jobs lost in oil and gas drilling and refineries, oil and gas field workers account for 49,500 lost jobs while about 1,500 jobs were lost in refineries. This does not include the oil and gas job losses in other activities like mining machinery manufacturing and pipeline distribution.

These estimates are all quite conservative and do not reflect underemployment or temporary unemployment and all segments are likely to show even greater losses through April.

Intuitively, the COVID-19 crisis is disproportionately impacting communities that are least able to cope. Initial studies have shown that low income workers, younger workers, women, and racial and ethnic minorities across the US have undergone above average initial job loss rates.

Source / More information : BW Research Partnership

Report by: OGP/Segun Cole , Please email us your industry related news for publication [email protected]
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