Oil and Gas

Companies in the oil and gas industry discover reserves of these resources in the ground or at sea; build, operate, and maintain the wells or rigs that extract these resources; refine them for use; and then distribute or sell them to retailers, utility companies, or end users. According to the U.S. Energy Information Administration (EIA), petroleum is the largest energy source in the U.S. In 2022, U.S. petroleum consumption averaged about 20 million barrels per day, including biofuels. Much of the U.S. petroleum that was consumed (66.6 percent) was used for transportation, including airplane, automobile, bus, ship, and truck fuel. Industrial uses accounted for 27.5 percent. Household and commercial use accounted for 5.3 percent, largely for heating. About 0.6 percent was used in the production of electrical power.

At year-end 2022, the United States had approximately 48.3 billion barrels of oil reserves and 691 trillion cubic feet of technically recoverable natural gas in the United States, according to the EIA. Estimates for this have risen steadily for several years since new technologies have enabled access to resources that remained out of reach in the past.

The EIA reports that "U.S. dry natural gas production increased year over year in 2023 for the third consecutive year. Dry natural gas production was the highest for any year on record, dating back to 1930."

At the same time, oil and natural gas companies have looked to previously unexplored regions and locations of oil and gas reserves. As a result, the oil industry in recent years began a more aggressive offshore drilling program and was able to locate and extract large reserves of oil. Also, scientists developed a method for extracting oil and gas from rock formations. Called fracturing, or fracking, this method injects water and a small percentage of chemicals under very high pressure into the rock formations. The pressure of the water and chemicals creates fissures in the rock, allowing the oil or gas to escape.

Before consumers can pump the gas into their vehicles, it starts out as crude oil. Crude oil is extracted from reserves located by scientists like geologists. Oil companies then construct and operate large oil wells or offshore drills at these locations. Once the oil is extracted, it is transported to a refinery for further processing.

Processing begins using a fractional distillation column that boils, or distills, the oil, separating it into various groups of hydrocarbons. The different chains, or fractions, of hydrocarbon are then pulled out by their vaporization temperatures and used to produce different products, such as gasoline, kerosene, lubricating oil, and diesel fuel. Some companies now use chemical processes (by using a catalyst) to separate the hydrocarbon groups, rather than distillation. Once the distillation process is complete, impurities are removed from the oil by running it through a column of sulfuric acid or an absorption agent that removes the water. The finished product is then transported to wholesalers and retailers.

Approximately 119,700 people worked in the U.S. oil and gas extraction industry in November 2024, according to the U.S. Department of Labor. About 54,600 people worked in the pipeline transportation sector. Key workers in the oil and natural gas industry include scientists, engineers, project managers, construction workers, rig and well operators, tanker truck drivers, and others such as supervisors, managers, pipe welders, pipe fitters, safety engineers, and environmental officers. Advanced artificial intelligence, data analytics, drones, augmented reality, and other emerging technologies are increasingly being used in the oil and gas industry, so workers with expertise in these areas will also be in strong demand.

The American Petroleum Institute says that "the oil and natural gas industry supports 9.8 million U.S. jobs and 8 percent of the U.S. economy."