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Study: Shale supply chain to generate widespread economic growth


Zachary Cikanek | CikanekZ@api.org | 202.682.8114


WASHINGTON, September 24, 2014 – The U.S. energy renaissance is expected to generate vast growth in the supply chain of manufacturers, suppliers, and servicers that support America’s oil and natural gas sector, according to a new study by IHS Global.

“America’s rise as an energy superpower is creating an economic ripple effect of fast-paced growth, higher wages, and new jobs,” said API Vice President for Regulatory and Economic Policy Kyle Isakower. “Earlier this month, API released its own survey of 30,000 vendors and supporting businesses in every single state that that help deliver affordable energy to U.S. consumers. The new analysis by IHS shows how quickly these opportunities are growing and how important domestic energy production is for other sectors of the U.S. economy, from manufacturing to construction.”

The study, commissioned by the Energy Equipment & Infrastructure Alliance (EEIA), calculates the expected growth in employment, GDP, government revenue, and wages in the supply chain that supports unconventional oil and natural gas development. It estimates that employment growth in the supply chain will outpace the U.S. average over the 2012 to 2025 period by more than two to one. The total number of jobs supported by unconventional energy will grow from 1.1 million in 2012 to more than 1.8 million in 2025 – with more than 40 percent of the total representing manufacturing, construction, and other jobs in the supply chain.

“Thanks to innovations in horizontal drilling and hydraulic fracturing, America’s energy revolution is revitalizing growth far beyond oil- and natural gas-producing states, especially in areas that make capital goods like steel and machinery,” said Isakower. “We’re seeing a supply chain that extends into every region, creating opportunities for well-paying jobs and demonstrating the importance of federal policies that open access to federal lands and avoid duplicative regulations.”

The report also shows that the unconventional supply chain will create jobs that pay about $11,000 more than the national average. Supply chain industries also will contribute increasing revenues to the government, growing from $13 billion in 2012 to about $23 billion in 2025.

API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 600 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 20 million Americans.