More than 500,000 supply chain jobs linked to unconventional production

Sept. 24, 2014

Industries that support oil and gas producers are benefiting from the growth of unconventional oil and gas development in the United States.

Industries that support oil and gas producers are benefiting from the growth of unconventional oil and gas development in the United States.

A new study by IHS has found that 524,000 people worked in supply chain industries related to unconventional oil and gas production in 2012 and that number is expected to reach 757,000 in 2025 — an increase of 45 percent.

Examples of these supply chain industries include manufacturers of steel pipe, construction equipment, railcars, sand and gravel producers and professional and technical labor. Benefits are felt by industries located in states with and without unconventional oil and gas production.

According to IHS, unconventional oil and gas activity in the United States has increased U.S. oil production by 50 percent since 2008 and has played a major role in making the country the world's leading natural gas producer.

"It is an important part of the story that the unconventional oil and gas producers sit atop long and diverse supply chains that run through the U.S. economy," commented Brendan O'Neil, managing director, consulting, IHS Economics and Country Risk.

In addition to the many jobs supported by unconventional oil and gas activity, these supply chain industries account for nearly one half a percent of total U.S. gross output each year. They are expected to contribute more than $16 billion in government revenues in 2015, and $23 billion by 2025, up from $13 billion in 2012.

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