Jun 25, 2025 Current Resources

The Permian Can’t Scale If No One’s Left to Work It

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

By Irina Slav - Jun 24, 2025, 6:00 PM CDT

The U.S. shale industry is facing a critical talent shortage as skilled workers retire, younger generations avoid oil careers, and labor costs rise.
Despite increased automation and AI-driven efficiencies, the Permian Basin and broader shale sector still struggle to fill essential technical roles, affecting productivity.
U.S. shale production is nearing its peak, and while output may plateau rather than sharply decline, ongoing workforce shortages threaten future stability and growth.

The U.S. shale industry faces a structural shift in production and productivity while it has been grappling with a shortage of skilled workforce for years.

Booming U.S. oil production may be nearing its peak, according to industry executives and forecasters, and it isn’t just because oil prices are dangerously close to breakevens.

The perennial talent crunch is weighing on the US oil sector. Rising labor costs and a shrinking talent pool add to the concerns in the industry that is strongly supported by the Trump Administration to “drill, baby, drill” and ensure America’s energy dominance.

A large part of the skills gap in the oil and gas industry, including in America, is a generation gap. Boomers are retiring, Gen X want stability that the boom-and-bust oil cycles cannot provide, while Generation Z, despite growing up with technology, are generally averse to committing to industries that conflict with their beliefs, despite the higher wages.

The lower number of geologists and experienced engineers entering the U.S. oil and gas industry has been a concern for producers and service suppliers for years now. These concerns have not abated with the increased automation and the use of AI and other sophisticated technology to boost efficiency and productivity. At the end of the day, the decision-making powers lie with the experienced and skilled workforce.

Moreover, automation and robotics can perform repetitive functions, leaving more time for people and teams to focus on high-priority tasks.

Talent Crunch

For example, supermajor Chevron is testing one AI-driven approach to inspections in the Permian.

Near Midland, the heart of the Permian basin, Percepto and Chevron have recently reached a six-month milestone to evaluate the use of the drone company’s AI-powered remote inspection capabilities.

Over the first 90 days of deployment, Chevron saw work hour savings that allow personnel to prioritize activities, cost-efficient and increased monitoring frequency at remote sites, and faster issue detection, the drone company Percepto said.

“This not only keeps our workforce safer but also allows us to direct resources where they can make the biggest impact,” said Kerri Harvey, Chevron’s Midland Basin Operations Superintendent.

“Leveraging automation enables our teams to spend less time on the road and more time focusing on high-priority tasks.”

It’s the skilled workforce that will focus on high-priority tasks, but the Permian struggles to fill these roles.

Many employers face a shortage of technical expertise in fields such as petroleum, electrical, and mechanical engineering, Willie Taylor, CEO of Workforce Solutions Permian Basin, told PBO&G, the Permian Basin Petroleum Association magazine, earlier this year.

Homegrown talent in the Permian isn’t enough to keep up with demand, while new hires from outside the basin are often deterred by the high cost of living in Midland and Odessa—the shale industry’s centers in the region.

Post-Peak Shale Will Need Skilled Workforce, Too

Even if current estimates of slowing and stopping growth in total U.S. oil production by the end of the year pan out, skilled talent will be needed for years to come to fill the high-demand jobs in the sector.

Yet, with an ageing workforce and fewer employees willing to join the industry, the problems are mounting for the shale patch.

U.S. crude oil production is set to decline from an all-time high of 13.5 million barrels per day (bpd) in the second quarter of 2025 to about 13.3 million bpd by the fourth quarter of 2026, due to decreasing active drilling rigs and declining oil prices, the U.S. Energy Information Administration said in its June Short-Term Energy Outlook (STEO).

With fewer active drilling rigs, the EIA now forecasts that U.S. operators will drill and complete fewer wells through 2026. On an annual basis, the administration expects total U.S. crude oil production to average a bit more than 13.4 million bpd in 2025 and a bit less than 13.4 million bpd in 2026.

Some big names in the industry also see peak shale output on the horizon.

“As you know that most of the shale basins now have either plateaued or starting to decline, except for the Permian,” Vicki Hollub, President and CEO of Occidental Petroleum, said on the Q1 earnings call.

“If companies continue to talk about dropping activity levels, I think the Permian could plateau sooner than we expected - and we had expected the Permian to continue growth through 2027,” Hollub added.

Ryan Lance, the chief executive of ConocoPhillips, said on the company’s earnings call that at $60 oil, “the folks that don't have the kind of cost of supply sitting in their portfolio are going to find themselves cash-strapped and returns-strapped.”

“Obviously, the balance sheets are in pretty good shape across the industry, better than we were in the last downturn, but you'll see a lot of activity cut back,” Lance added.

Peak shale output, whenever it occurs, does not mean a steep decline afterwards—it would rather be a long plateau of leveling off of U.S. crude oil production in which the slowdown in shale would be partly offset by rising output from the U.S. Gulf of Mexico, executives and analysts say.

U.S. oil production will not fall off a cliff, but the ever-shrinking pool of skilled employees in the industry could further challenge the shale patch with rising labor costs and drilling times.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com