Unleashing the Supply Chain

Assessing the impact of the export ban and free trade on the US economy

Every State and Nearly Every Congressional District – Even Those Far Removed from the Oil Patch – Benefit from the Great Revival in Crude Oil Production due to the Complex and Integrated Supply Chain. For Every Job Created in Oil Production, Three Jobs are Created in the Supply Chain and Six More in the Broader Economy.

The US crude oil supply chain is a vast network of interconnected suppliers of labor, commodities, and information reaching into communities and industries across the United States. It is highly capital-intensive and includes firms in industrial equipment and machinery, construction and well services, information technology, logistics, materials, and the professional, financial and other services sectors. Removing the crude oil export ban will have a dramatic impact across the US on supply chain jobs, income, and government revenue. The breadth of these impacts reflects the capital intensity of the oil industry and its reliance on inputs from a vast network of domestic goods and services suppliers around the United States.

This study, Unleashing the Supply Chain: Assessing the Economic Impact of a US Crude Oil Free Trade Policy, builds on previous IHS research, US Crude Oil Export Decision, that assessed the impact of removing the export ban on the US economy. It found that lifting the ban would lead to further increases in domestic investment and oil production, resulting in lower gasoline prices while supporting nearly 1 million additional jobs at the peak. This new study examines the US crude oil supply chain and finds that it supports nearly 300,000 of those additional jobs at the peak.

The increased supply chain economic activity resulting from the rise in crude production would support an average of 124,000 additional US jobs over 2016-2030, with highs of 250,000 additional jobs supported in 2017 and a peak of 293,000 jobs in 2018. Removing the export restriction will also fuel gross domestic product (GDP) and household income: the crude oil supply chain will add $26 billion to GDP per year and improve labor income by about $158 per year, on average, for each household.

The energy supply chain encompasses all 50 states, but sizes and populations vary widely. To further quantify the breadth of the supply chain, the supply chain impacts of lifting the export ban were estimated for each US congressional district, as well as for each state. Lifting the ban supports supply chain activity across all states and nearly all congressional districts. The benefits by state and congressional district vary not only by whether each area produces crude oil, but also by the level of diversity and integration of the local crude oil supply chain.

To access the national, state, and congressional district level aggregate data through the Supply Chain Data Tool, please click here.

To access the earlier report, US Crude Oil Export Decision, please click here.

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Main Report
Executive Summary
Appendix A
Appendix B
Supplemental Report: Pump Primer
Supplemental Briefing Paper: Driving Unconventionals - High-horsepower engines and applications
Supplemental Briefing Paper: Information Technology and Unconventionals
Supplemental Briefing Paper: Frac Site Teardown: Anatomy of the Frac Truck
Fueling Growth in the Heartland: Unconventionals Capital Spending and Traditional Manufacturing
Supplemental Briefing Paper – Ohio and Unconventionals: The state’s role as producer and supplier