US oil and gas workers see pay fall. Sign of trouble for energy?

Average compensation for oil and gas professionals in the US fell 4 percent last year, according to a new study. The decline in pay coincides with a slowdown in the energy's industry's growth, but the industry may simply be catching its breath.

Brennan Linsley/AP/File
A worker switches wellheads at the site of a natural gas hydraulic fracturing and extraction operation outside Rifle in western Colorado. After a frenzied four years of growth, a new study shows the oil and gas industry has experienced a dip in production and compensation this year.

US energy may be booming. But for those who labor in its fields and on its rigs, pay is falling.

Average compensation for oil and gas workers in the United States was 4 percent last year than it was in 2011, according to Rigzone, an oil and gas industry news and job recruitment website. The decline comes as the industry itself begins to slow.

US drilling rig counts are down nearly 10 percent to 1,754 last week compared with a year ago, according to Baker Hughes, an oilfield service company. 

The hiring frenzy, which peaked at an all-time high of 68,100 net new jobs in 2011, dropped by more than half in 2012, and is on track to add less than 20,000 workers this year.

To some analysts, these trends point to trouble ahead for US energy. But to Paul Caplan, president of Rigzone, a pause is natural after four years of frenzied growth.

"We’re at a point right now where I think the industry is taking a breath," he says in a telephone interview. "The future is extremely bright, and employers are still looking for a lot of quality people across a broad range of skills."

Part of the drop in pay stems from a generational change. After years of very little new hiring in the US energy sector, the jobs spurt has brought on a huge contingent of younger, less-experienced workers who will need time to reach the pay levels of the retiring professionals that they're replacing, according to Mr. Caplan.

Price also plays a role in the slowdown. The glut of natural gas has pushed prices lower, causing some companies to cut back on drilling operations.

Still, petroleum pay remains enviable. Even with last year's drop, the average oil and gas worker earned an average $94,722, according to Rigzone.

Petroleum engineering is the highest-paid college degree, according to an April 2013 report by the National Association of Colleges and Employers. (Debt-laden college students take note.)

Those students go on to earn a starting salary averaging $93,500, which is $21,000 more than second-place computer engineering students.

Of course, not all energy jobs are as well-paid as petroleum engineers. Oil rig worker was recently named the fifth worst job of 2013 by, an online job site. 

"Few jobs are as isolated, requiring long hours spent on rigs often located at sea or in fields far from major cities," the ranking reads. "And while fracking [hydraulic fracturing] is providing new opportunities in the field, sustainable energy’s growth will pose long-term sustainability challenges to the oil rig worker’s job market."

Then again, that same study named newspaper reporter as the worst job of 2013. So, what do they know?

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