A diverse group of supply-chain industries is benefitting from unconventional oil and gas development in the US, according to a study that IHS released last year.
The research and analytics firm found that employment in supply chain industries supporting unconventional development totaled 524,000 jobs in 2012 and is expected to grow to 757,000 jobs in 2025.
Brendan O'Neil, managing director of consulting for IHS Economics and Country Risk, said unconventional producers rely upon long, diverse supply chains.
"The growth in unconventional production has become an important source of economic activity for these industries at a time when many of their other primary markets were experiencing decline as a result of the Great Recession," O'Neil said.
The study, "Supplying the Unconventional Revolution: Sizing the Unconventional Oil and Gas Supply Chain," looked at the supply chain supporting upstream, midstream, and downstream sectors in the Lower 48 states.
Researchers analyzed supply chains including manufacturers of steel pipe, construction equipment, railcars, sand and gravel providers, and labor.
IHS forecasts that total gross output from supply chain industries will grow to $205.9 billion in 2025 from $145.7 billion in 2012.
Supply chain industries contributed $13 billion to government revenues in 2012. That figure is expected to rise to more than $16 billion in 2015, and $23 billion in 2025.
"Suppliers benefit from the enormous investment required for the exploration, production, processing, and transport of oil and gas resources," the report says.
Supply chain activity in producing states supported nearly 460,000 jobs in 2012. That figure is expected to rise to 630,000 jobs in 2025, with construction and support activities for oil and gas operations accounting for the largest share of employees.
For non-producing states, industry-supported employment is expected to increase to 127,000 jobs in 2025 from 64,000 jobs in 2012. The capital goods sector accounts for the largest share of these jobs.