Downside from boom in the energy patch: fatalities

Job growth in the oil and gas sector is vastly outpacing total private sector growth, but so too are the sector’s work-related fatalities. Have safety practices slipped in the energy industry?

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Advanced drilling techniques have spurred a surge in employment in the energy industry that vastly outpaces other sectors. But the rapid rise in extraction has come with a downside: a rise in work-related fatalities.

Fatalities reached a record in the oil and gas industry last year, according to data released Thursday by the Bureau of Labor Statistics. So far, though, the rise appears linked to the rapid growth in drilling activity rather than a slide in safety standards.

"I think the industry is making progress on safety," Paul Caplan, president of Rigzone, an oil and gas industry news and job recruitment website, wrote in an e-mail, "but it’s an area where you can always do more – making greater strides to protect its workforce and the public and environment in general."

Oil and gas jobs rose by 162,000 between 2007 and 2012, according to the US Energy Information Administration (EIA). That's a 40 percent increase. Compare that to the total private sector, which grew by only 1 percent during the same period. (Those totals come from Census figures. Using July Bureau of Labor Statistics (BLS) figures, the gap looks bigger: oil and gas grew 43.6 percent; the private sector shrank 1 percent since 2007.)

That kind of growth has bolstered the economies of North Dakota, Pennsylvania, and other regions rich in the shale rock that has transformed the US energy landscape. In 2001, North Dakota ranked 38th among the 50 states in gross domestic product (GDP) per capita. Between 2007 and 2012, crude oil production in North Dakota's Bakken Shale multiplied fivefold. Natural gas production tripled.

By 2012, the state's GDP per capita ranked No. 1 in the country, according to the Bureau of Economic Analysis. At $55,250, it was more than 29 percent above the national average.

All that drilling comes at a cost. Work-related fatalities in oil and gas extraction rose 23 percent to 138 in 2012, according to the Bureau of Labor Statistics (BLS). That's a new high for the industry in a year that saw the second-lowest level of total work-related fatalities since BLS started keeping track in 1992. In 2011, North Dakota had the highest rate of workplace fatalities, according to a report issued earlier this year by the AFL-CIO. 

"We can and must do better," Secretary of Labor Thomas Perez said in a statement Thursday. "Job gains in oil and gas and construction have come with more fatalities, and that is unacceptable."

The Labor Department's Occupational Safety and Health Administration has organized a "stand down" event with oil and gas employers, scheduled for Nov. 14. A "stand down" is a voluntary, coordinated pause in the workday to discuss and address workplace safety issues.

While the total number of fatalities has increased, their percentage of total oil and gas workforce has remained largely the same, Mr. Caplan noted, and have even decreased slightly in recent years. Fatalities made up about 0.02 percent of the total oil and gas workforce in 2012, down from 0.03 percent five years prior.

Those numbers are "pretty definitive that safety is not being sacrificed, but quite the opposite," Caplan wrote.