Full Title: Unleashing the Supply Chain: Assessing the economic impact of a US crude oil free trade policy
Author(s): IHS Energy/IHS Economics
Publisher(s): IHS
Publication Date: March 1, 2015
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Description (excerpt):
A revival in US crude oil production—up 80% since 2008—is expanding economic activity across the nation through an interdependent, technology-driven supply chain. This supply chain encompasses dozens of important and diverse domestic industries well beyond what is commonly thought of as the “oil industry.” Consumers are now paying substantially less for gasoline, largely due to the impact on global markets of higher US oil production. But lower oil and gasoline prices are just one benefit. In this report, IHS offers further analysis of the benefits that extend across the nation from free trade of crude oil— benefits that are also placed at risk by an outdated trade policy from an era of oil price controls that were abolished in 1981.
Crude oil production depends on an extensive supply chain—a vast network of interconnected labor, commodities and information that reaches into many communities and industries. For example, the diesel engines driving drilling rigs and hydraulic fracturing equipment are largely manufactured in the industrial heartland of Illinois, Indiana, Wisconsin, and Michigan. Many states — New York, Florida, Illinois, and Massachusetts, for example—with modest or negligible oil production sectors have strong manufacturing or service sectors supplying the oil industry in producing states. As IHS reported in its earlier report, US Crude Oil Export Decision (herein referred to as the Export Decision), if the trade ban is lifted, the number of US jobs is 394,000 to 859,000 higher each year, on average, under the Base Production and Potential Production cases, respectively, between 2016 and 2030. Supply chains represent a substantial share— about 30%—of the total jobs economy-wide: supply chain jobs under free trade average 124,000 to 240,000 annually in the Base and Potential cases, respectively.