Unconventional Oil and Gas Production Supports More Than 1.7 Million U.S. Jobs Today; Will Support 3 Million by the End of the

  Unconventional Oil and Gas Production Supports More Than 1.7 Million U.S.
  Jobs Today; Will Support 3 Million by the End of the Decade, IHS Study Finds

“New energy reality” contributes to energy security while boosting jobs in a
period of economic uncertainty

Business Wire

WASHINGTON -- October 23, 2012

The revolution in unconventional oil and gas production is fundamentally
changing the United States energy outlook, generating significant job
creation, economic growth and government revenues, according to a new IHS
study.

The entire upstream unconventional oil and gas sector will support more than
1.7 million jobs in 2012 at average wage levels dramatically higher than the
general economy. The number of jobs is expected to increase to 2.5 million
over the next three years. The number of jobs supported will continue to rise
to nearly 3.5 million in 2035, according to the study.

The new study, America’s New Energy Future: The Unconventional Oil and Gas
Revolution and the Economy builds on previous IHS research on the economic
impacts of unconventional gas to provide the most complete assessment to date
of the economic contributions—in terms of jobs, economic value and government
revenue—for both unconventional oil and unconventional gas in the United
States.

“The growth of unconventional oil and gas production is creating a new energy
reality for the United States,” said Daniel Yergin, IHS vice chairman and
author of The Quest. “That growth has not only contributed to U.S. energy
security but is a significant source of new jobs and economic activity at a
time when the economy is a top priority.

“The United States currently has the highest rate of growth in crude oil
production capacity in the world and is virtually self-sufficient in natural
gas, except for some gas from Canada. This is a stark contrast from when,
prior to the unconventional revolution, it was expected that the U.S. would
soon become heavily dependent on gas imports,” Yergin added.

Future growth in unconventional oil and gas production will drive continued
economic expansion in both the near- and long-term, the study says. Annual
unconventional tight oil production—projected at 2 mbd for 2012—is expected to
increase by nearly 70 percent by 2015 to more than 3.5 million barrels of oil
per day (mbd) and rise to 4.4 mbd in 2020. Unconventional gas
production—shale, plus “tight gas”—is expected to increase 22 percent to
nearly 42 billion cubic feet per day (Bcf/d) in 2015 (65 percent of total U.S.
gas production) and reach more than 76 Bcf/d in 2035 (75 percent of total U.S.
gas production).

Among the study’s key findings:

  *Nearly $5.1 trillion in capital expenditures ($2.1 trillion in the oil
    sector, $3 trillion in the gas sector) will take place between 2012 and
    2035 across the entire upstream unconventional oil and gas activity
    sectors.
  *Employment in the entire upstream unconventional oil and gas sector on a
    direct, indirect, and induced basis will support nearly 1.8 million jobs
    in 2012, 2.5 million jobs in 2015, 3 million jobs in 2020, and nearly 3.5
    million jobs in 2035.
  *The jobs created tend to be high quality and high paying, given the
    technologically innovative nature of unconventional oil and gas activity.
    Workers associated with unconventional oil and gas are currently paid an
    average of $35.15 per hour—higher than the wages in the general economy
    ($23.07 per hour) and more than wages paid in manufacturing, wholesale
    trade and education, among others.
  *Unconventional energy activity will contribute $237 billion in value added
    contributions to GDP in 2012, a figure that will increase to $475 billion
    annually in 2035.
  *Unconventional oil and gas activity will generate more than $61 billion in
    federal and state government revenues in 2012 and increase to $91 billion
    in 2015 and $111 billion in 2020. By the last year of the forecast period,
    in 2035, government revenues will increase to more than $124 billion.

A key reason for the profound economic impacts associated with unconventional
oil and gas production are the lengthy, complex, domestically-sourced supply
chains which support American jobs. The total employment contribution for
overall upstream unconventional activity relative to total U.S. employment
will average 1.5 percent over the short-term (2012-2015), 1.9 percent over the
intermediate term (2015-2020) and 2 percent over the long-term (2020-2035),
the report finds.

The industry, highly capital-intensive by nature, relies on suppliers in
construction, fabricated materials and heavy equipment but it also requires a
broad range of material and services such as legal and financial services and
information technology, said John Larson, IHS vice president, public sector
consulting.

“Unconventional oil and gas production is unique in that it combines a highly
capital-intensive industry with a broad domestic supply chain,” Larson said.
“The United States is a world leader in all parts of unconventional oil and
gas activity which means that most of the dollars spent here stay and support
American jobs.”

The report, America’s New Energy Future: The Unconventional Oil and Gas
Revolution and the Economy is the first in a series of major studies measuring
the economic impacts of unconventional oil and gas activity in the United
States. Subsequent reports will focus on the economic impacts on a
state-by-state level and the potential for a U.S. manufacturing renaissance
fueled by abundant energy supply.

America’s New Energy Future: The Unconventional Revolution and the Economy
report is based on the IHS CERA analyses of each play which calculate the
investment of capital, labor and other inputs required to produce these
hydrocarbons. The economic effects of these investments are then calculated
using the proprietary IHS Global Insight economic impact assessment and
macroeconomic models to generate the contributions to employment, GDP growth,
labor income and tax revenues that will result from the higher level of
unconventional gas development. The research was supported by the American
Petroleum Institute, Institute for 21st Century Energy, the American Chemistry
Council and the Natural Gas Supply Association IHS is exclusively responsible
for all of the analysis and content.

To download America’s New Energy Future: The Unconventional Revolution and the
Economy complete report and methodology visit
http://www.ihs.com/unconventionalsandtheeconomy

About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information, insight and analytics in
critical areas that shape today’s business landscape. Businesses and
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comprehensive content, expert independent analysis and flexible delivery
methods of IHS to make high-impact decisions and develop strategies with speed
and confidence. IHS has been in business since 1959 and became a publicly
traded company on the New York Stock Exchange in 2005. Headquartered in
Englewood, Colorado, USA, IHS employs more than 6,000 people in more than 30
countries around the world.

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reserved.

Contact:

IHS Inc.
Jeff Marn, +1-202-463-8213
Jeff.marn@ihs.com
or
IHS Press Desk, +1-303-305-8021
press@ihs.com
 
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